Tax Advantages of Owning Real Estate in Puerto Rico

Extraordinary new tax incentives make living and working in Puerto Rico more enticing than ever before for U.S. citizens. They create a sense of urgency for investors to move to PR and bring their business here.

The Tax Incentives 

With Puerto Rico’s Act 22 (Act to Promote the Transfer of Investors to Puerto Rico) which provides tax exemption on income derived from investments of non-resident investors, complemented by the authority of Puerto Rico’s Economic Development Administration to designate Targeted Employment Areas, the EB5 should prove to be an attractive business come-on for foreign investors.


ACT 20 and 22

In January 17, 2012, Puerto Rico passed legislation making it a tax haven for U.S. citizens that become residents of Puerto Rico. The tax laws, known as Act 20, the Export Services Act, and Act 22, the Individual Investors Act, shields new residents residing in Puerto Rico for at least half of the year from paying most federal income taxes. The U.S. Tax Code generously exempts Puerto Rico sourced income from federal tax and, under the law, residents pay minimal or possibly no taxes on interests and dividends, as well as capital gains. Additionally, property taxes are significantly lower than property taxes in the mainland U.S. Thus, making Puerto Rico a mecca for exportation of international services worldwide....


EB-5 – Puerto Rico Inmigran Investor Program

Sometime in 1990, the United States Congress enacted a law aimed at boosting the US economy and bringing down unemployment by creating or saving at least 10 full-time jobs. Known as EB5, this Immigrant Investor Program, aside from offering tax incentives, allowed foreigners an opportunity to become a conditional resident of the US for 2 years, much like having the status of a conditional green card holder.

How Does It Work? 

If you’re a foreign investor, you would be required to put in an investment of US $1,000,000. But, a minimum of US $500,000 is also acceptable should you decide to make the investment in any “Designated Target Employment Areas”. These are defined as rural areas outside of a city or high unemployment areas or if the investment is made through a designated EB5 Regional Center...