Different factors are making this one of the best times to invest in Puerto Rico real estate. The two main factors are: low prices and tax incentives which represent an excellent opportunity from an investment perspective. In Puerto Rico, you’ll find stunning beachfront properties for 50 – 75% less than Miami, and stately colonial homes for 50% less than Cartagena’s Old City in Colombia.
Some other factors to consider about why to invest in this Caribbean Island are:
- U.S. territory benefits: As a U.S. territory, Puerto Rico enjoys unique benefits not shared by its fellow Caribbean islands. Puerto Rico has access to relatively extensive American disaster resources. Power and water systems, bridges, and roads are constructed following U.S. standards. U.S. citizens can travel to and from Puerto Rico without a visa or even a passport. In terms of travel freedom, Americans can visit Puerto Rico as easily as they could Idaho. And because Puerto Rico uses the U.S. dollar, there is minimal currency risk.
- AirBnB Market / Tourist rentals: Hotel prices in Puerto Rico remain relatively expensive and Airbnb rentals are scarce.
For investors, this represents a major advantage. Investors in Airbnb may be able to leverage higher returns than what can be earned in a traditional rental.
- Climate and natural beauty: Puerto Rico boasts one of the most changeless climates in the world, with tropical temperatures averaging a balmy 80 to 85 degrees all-year-round.
Then, of course, you’ve got the beaches. The tiny island of Puerto Rico is rimmed by more than 270 miles of glittering coastline with white sands, surf-worthy waves, and colorful coral reefs.
The financial decline that has continued for the past 8 years is being addressed by local government. Multiple structural changes are being made to contribute to the rebuild of the local economy.
Law 20 (Global Service Industry Headquarters) and Law 22 (Individual Resident Tax Heaven) are examples of the tax incentives that the Puerto Rican government has implemented to promote the economic development of the Island. These Laws encourage wealthy investors to establish residence and headquarter global service-sector businesses in Puerto Rico. Both Laws have very specific requirements which should be discussed with a local tax advisor,
Under Act 20, qualified businesses are taxed a flat 4%, as opposed to the 39% and soon-to-be 20% rate businesses based in the U.S. are taxed. At the same time, eligible companies enjoy 100% exemption on property taxes, in addition to tax exemption on dividends, interest, and capital gains. To qualify, business owners and investors need only reside on the island for a minimum of 183 days per year.
Act 22. Also called the Individual Investors Act, this awards individuals who gain Puerto Rican residency a personal tax rate of 0%. Under Act 22, individuals enjoy 100% tax exemption on Puerto Rico-sourced dividends, interest, and certain capital gains. To qualify, investors must become Puerto Rican residents.
Once you’ve determined that Puerto Rico in an appropriate choice for your investment strategy, give us a call and we can review options for residential and/or commercial properties for your move to Puerto Rico.