In 2012, the Puerto Rico government established two laws to increase foreign investment in the island. They are known as Acts 20 and 22 and are geared toward two different investors.
Act 20, The Export Services Act, was created to encourage service-industry companies, such as financial services, consulting services and call centers, to conduct business out of Puerto Rico, providing a reduced corporate tax rate as well as exemptions on dividends to eligible service-related businesses in Puerto Rico.
Business Services That are Eligible:
View the Act 20 application here.
Act 22, The Individual Investors Act, was established to lure wealthy individuals to move to the island, providing 100% exemptions on interest, dividends and certain capital gains to eligible applicants who become bona fide Puerto Rico residents. The idea is to stimulate the economy with real estate investments, job creation, and general use of local services while stimulating the banking sector with capital.
Why Puerto Rico?
Unlike other “tax shelters,” like the Cayman Islands, when you become a resident of Puerto Rico you maintain your U.S. citizenship. In addition, you are not required to pay a painful 23.8% exit tax of your unrealized capital gains. Even though Puerto Rico is a U.S. territory, Section 933 of the Internal Revenue Code of the United States of 1986 (the “US Code”), determines bona-fide residents are exempt from federal tax. By becoming a Puerto Rico resident, they are only subject to federal income taxes on income derived from sources outside of Puerto Rico.
View the application for Act 22 here.
We at Isla Vida Real Estate are happy to answer any questions about purchasing real estate in Puerto Rico, and can recommend tax and legal advisers to help you take advantage of these laws, contact us today!
This beachfront cabana recently sold for under $100k, located at Buye Beach in Cabo Rojo, showing there are still some great properties at decent prices in Puerto Rico.
But if you want to spend just $100k, chances are you will not find anything beachfront, even land. To be realistic, $100k can by an older condo in Rincon at the Hotel Villa Cofresi or about 800 sq meters of land in the hills of Puntas in Rincon, or about land in Aguada, about 1/2 mile from the beach.
If you are willing to take on a fixer uper, there are more of these types of properties with a pretty good deal of land attached in the hills above Rincon and Aguada, also further inland from the beach in Cabo Rojo, but they are generally not financeable and would need to be a cash purchase.
If you can increase your budget to about $160k, the properties become much nicer, condos, houses, large lots and investment properties all come into play. As a buyer's agent it is my job to find your perfect Puerto Rico property whatever your budget. Our fee is paid by the seller so using a buyer's agent not only saves time, but adds no cost to your purchase!
If you are searching for Puerto Rico Real Estate, chances are you will also be looking at options for financing. There are a number of options for foreign or US based investors, as the banks in Puerto Rico operate separately from US banks. The normal requirements are 20% down with a good credit score. It is often helpful in your search if you can pre-qualify or show proof of existing funds.
One of the easiest and fastest ways to get financing is taking a secondary loan on your property in the US. Many of our clients have enough equity in their homes in the states to draw on an equity loan that is then used to pay for a condo or home here in Puerto Rico outright.
If you do not have that option, you will need to finance using a Puerto Rico based bank or finance company. I recommend First Bank or Oriental Bank as their mortgage units seem to move fast and most have an English speaking representative. Another option is the local co-op, here in Rincon, we have the Rincon Co-op that offers higher rates, but a rebate on the interest each year that make it very competitive. Also, the co-op knows the Rincon market best and may be more willing to loan on some properties that may not be appraised as well by the out of town banks.
If you want to get pre-approval before you come to Puerto Rico, Fembi Mortgage is another great option, they can help get you rate info and pre approval over the phone.
However you decide to obtain financing, it is always wise to consider a number of sources and get details of points, early payoffs and loan costs before going with any company. Feel free to contact us for any questions about Western Puerto Rico Real Estate!
Rincon is one of the most popular towns on the West Coast of Puerto Rico, and for good reason! The surf, beautiful beaches, hills and rural atmosphere provide a beautiful natural setting, add in a vibrant art community and some of the best restaurant not in San Juan and you will find Rincon to be a truly special place.
So if you want to get your piece of paradise, the time is now, while properties are still affordable and there are some fantastic ocean view lots still available for under $100k.
I've compiled a list of a few properties that I feel are great opportunities for investment in or relocation to Rincon.
The condos near the Balneario (Public Beach) are some of my favorite properties in RIncon. Offering close beach proximity without the threat of beach erosion, they are also close to the downtown plaza with its Sunday Farmer's market and great restaurants. At Chalet del Mar, there is a 2 bedroom condo listed for $140k. This property allows short term rentals and has low HOA fees,a great investment opportunity!
There are 3 pieces of land just up the road from Pools Beach that have recently been offered for sale, lots that vary from 850 sq meters to 995 sq meters for asking price of $135k. I like these lots because they are walking distance to great surf and can offer views of the Aguadilla Bay. For a more unique and private lot with a beautiful Bay view, there is an unlisted 1/4 acre lot for $300k, located just a short walk to Sandy Beach. This is the type of lot to build your Caribbean dream home; private, breezy, beach close and with fantastic views!
Homes and Multiple Units:
Puntas is a very good place to invest if you want to have rental property. There will always be surf and along with that surfers who need a place to say. There is a 3 bedroom home, completely remodeled with a studio apartment that is listed for $350k. It has a nice valley view and a short walk to great surfing. Also available is a 2 unit home with apartments on each level, needs some work, listed at $230k. Located in puntas just up the hill from great surf beaches.
For more info on any of these or other great Rincon properties, contact me, your Rincon Buyer's Agent, with details of what you are looking for, firstname.lastname@example.org.
Investing in property in Puerto Rico can be tricky, you really need to know the area you are investing in. What is the economic situation? What is the forecast for future units or inventory? Are rents stable? Is the tourist market consistent and will it continue to be? Of course many of these questions cannot be answered definitively, but they need to be asked.
Having lived in Western Puerto Rico for 9 years and worked with vacation rentals in Rincon for over 6 years, Jim Westfall and Isla Vida Real Estate understand the market on this side of the island. We can help you find a great investment property and will offer a market analysis of rental income and expenses. Whether it is a condo, vacation villa or land to build on, making a sound investment in income property starts with understanding the market. Contact us to help you start your Puerto Rico investment property search, email@example.com.
Western Puerto Rico offers a few great areas to own a condo near the beach but which one is the best? We are focusing on Isabela and Rincon because while there are other beachside towns, these two offer more choices for condo buyers and vacation home investment.
Isabela is a beautiful town built on the cliff over a stretch of beach with a road running along the beach. Among the beautiful stretch of beaches is a nice long bike path, plenty of good restaurants and on different beach, plenty of condo properties. It's important to note, that the beaches of Isabela are all very different, some have great surf, some are rocky, other have sand or calmer lagoon type bays. Your choice for the location should at least in part be determined by what kind of beach you like.
Jobos Beach is the most popular area, but no condominiums. Montones Beach is a very nice, mostly calm bay with a few large condominium developments nearby. Huadimar Beach, closer to Aguadilla also offers a few different developments.
Isabela is closer to San Juan than Rincon and is also just minutes form the regional Aguadilla airport (BQN) which has flight from Jet Blue, United and Spirit airlines coming in from Ft Lauderdale, Orlando, JFK and Newark airports, very convenient!
New plottage of this Puntas Lot just above Pools Beach, 3 lots for sale, each for $135k. A fantastic opportunity to own land close to the great surfing areas of Rincon! Contact us for more info, firstname.lastname@example.org.
Carr 413 Interior
Rincon, PR 00677
Puerto Rico has been in the news lately, not for the best reasons, but if you look deeper into what is going on in Puerto Rico you may find a Caribbean location that is poised for a rebound. With many abandoned properties and plenty of open land, the price is right for investors. Here is our favorite reasons to invest in Puerto Rico real estate now.
The status of Puerto Rico is that of a "territory" of the US, Puerto Rican's are US citizens and the laws are based on Title 48 of the United States Code. The currency is the US dollar and banks operate within the same banking system as the US, with some differences. The ties to the US are strong through years of open travel between Puerto Rico and the United States, there are over 5 million Puerto Ricans living in the United States.
Although most news about the Puerto Rican economy lately has been dire, the passage of an instrument that will help Puerto Rico deal with its debt will be a welcome sign to investors, banks and businesses that the problem is being dealt with and while it is not an easy fix, the hemorrhaging debt will be stopped and incentives will be put into place to get the Puerto Rican economy growing.
This breezy, hillside villa overlooks the finest beaches in Rincon on 3 acres. Surrounded by lush tropical landscaping and a secure gated entrance, Villa Caracol Che offers spacious living areas, spectacular ocean views 5 Master Suites, each with a full, private bath, lagoon pool, large outdoor patio and decks.
Information is deemed to be correct but not guaranteed.