La Paz, BCS - State authorities in Baja California Sur have opened an investigation into a growing practice by some foreign residents. These residents are renting out their homes and vehicles informally in tourist areas. The Secretary-General of the State Government, Saúl González Núñez, confirmed that officials are looking into cases. Specifically, those where seasonal residents from the United States and Canada are leasing their houses, and even selling or renting imported vehicles in La Paz and Los Cabos without proper authorization.
“We have identified scenarios where American and Canadian part-time residents, who own homes here and bring vehicles with foreign plates, are now making a business of renting them out,” González Núñez said at a press briefing Tuesday. The practice came to light amid a federal program to regularize illegally imported cars (often called “chocolate” cars). Through that process, authorities discovered some expatriates were not only keeping unregistered vehicles but advertising them for rent to tourists.
Foreigners, primarily retirees or investors, often spend winters in the southern Baja Peninsula and return north during the summer. According to the state’s investigation, some of these individuals list their properties on short-term rental platforms when they are away. They even rent out their personal cars to other expats or visitors, all without permits or tax payments. These under-the-table rentals violate local regulations on lodging and transport services. Officials warn they also pose security and civil liability issues.
“This isn’t about discouraging tourism or foreign investment – we welcome that. It’s about ensuring everyone abides by the same rules,” González Núñez explained. In Baja California Sur, operating a rental home typically requires a permit and tax registration. Renting vehicles informally is outright prohibited. Car rentals must be through licensed companies. Authorities are concerned that unregulated rentals bypass safety inspections and could leave renters vulnerable.
Local real estate groups had long heard anecdotal reports of such activity, especially in Los Cabos. Luxury vacation homes owned by part-time foreign residents sometimes mysteriously become available for rent when owners are absent. The issue gained urgency when a recent vehicle registration campaign revealed that freshly legalized cars with U.S./Canadian plates were then being advertised to tourists at Los Cabos Airport and on expat forums. Some Americans and Canadians “essentially set up informal rental businesses on the side,” a state official said, speaking on condition of anonymity.
The government’s multi-agency probe will “locate those persons,” González Núñez said, citing motives of public safety and tax fairness. The concern is not only lost tax revenue, but also that uninsured or unvetted rentals could lead to accidents or crimes. In one case under review, an American resident allegedly rented out his SUV. The SUV was later involved in a fender-bender with a local driver – a legal tangle since the vehicle’s registration and insurance were not in order for a rental scenario.
Local law in Los Cabos has already been tightened in recent years regarding vacation rentals due to conflicts with hotels. Now, state officials will work with municipal governments in La Paz and Los Cabos to enforce compliance. This could include fines or even deportation for foreign nationals who flagrantly break business laws. Officials have also reached out to the U.S. Consulate in Tijuana and the Canadian Embassy to remind their nationals in Baja Sur of local regulations.
Foreign residents are a valued part of the community, authorities emphasize. However, those who wish to rent out property should follow the same path as locals – e.g., obtaining a “Casa de Huéspedes” (guest house) permit or registering on the state’s lodging registry. As for vehicles, any informal taxi or rental operation is strictly illegal. The legal way would be to open a business and register it with the Secretary of Finance, which few if any of the accused have done.
The security angle is also notable. Baja California Sur’s Tourist Police unit has reported incidents of unvetted individuals offering rides to visitors at Los Cabos International Airport. Some are likely owners of private vehicles trying to make cash, which can put tourists at risk. “There’s a reason transport and lodging are regulated – it’s to protect consumers and the public,” said González Núñez.
Reaction among the expatriate community is mixed. On a popular La Paz expat Facebook group, a few foreigners complained that the government is “cracking down on a harmless side hustle.” But others support the move. “I’m a U.S. citizen who moved here and I got all the permits to run my small B&B,” commented Elaine Thompson, a La Paz resident. “It’s not fair if others just do it under the table – plus it hurts the reputation of all expats if something goes wrong.”
State officials say the immediate next step is identifying those engaged in the practice and issuing warnings. Repeated or serious violations could lead to properties being shut or vehicles impounded. Baja California Sur’s economy thrives on tourism and foreign investment. However, as González Núñez underscored, “everyone must play by the rules, resident or visitor.”
