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There are many reasons that American buyers may want to buy a condo in Puerto Rico. The island has beautiful beaches and a pleasant climate, and because it is a territory of the United States, there are no restrictions on Americans acquiring property on the island.
However, there are financial risks and potential drawbacks to buying a property in Puerto Rico. Learn about the pros and cons, tax breaks for American buyers, and more before you decide whether a purchase is right for you.
Key Takeaways
- U.S. buyers benefit from tax breaks and other perks when purchasing a condo in Puerto Rico.
- When buying, use reputable, certified agents or nationally recognized real estate brands, as well as a licensed home inspector to ensure the unit is in sound condition.
- TasaMax, a third-party service, provides sales data about the local real estate market.
- Determine what is and isn’t included in the homeowners association (HOA) fee.
- You can obtain a home equity loan on your U.S. residence or draw from a U.S. line of credit to purchase your Puerto Rican condo in cash.
Risks and Rewards for Buying Property in Puerto Rico
Puerto Rico experienced a boom in its local real estate market after emerging from bankruptcy in 2022. Its bankruptcy, filed three years prior, was one of the largest filings in U.S. history and came during a serious debt crisis.
According to Christie’s International Real Estate, there were more than 900 condo listings in Puerto Rico by the beginning of 2025. Average prices ranged from about $530,000 to $665,000 in the more affordable areas of Carolina and Humacao. In the high-end market of Dorado, average prices exceeded $6 million. By far the most condos available could be found in the San Juan market, where average prices were about $1.5 million.
While Puerto Rico’s bankruptcy is in the past, the potential for extreme weather remains a risk for buyers. Properties, and the people living there, are in danger from hurricanes, which are growing more severe in tropical areas. Extreme heat can also cause health risks and impact local infrastructure.
Before making a purchase, you’ll want to weigh these risks against the benefit that having a Caribbean property will bring to your life. Condos in particular offer foreign buyers access to some of the best beach locations at a fraction of the cost of purchasing a house or land. Other condo draws include the ability to generate rental income when you are not using the property, which can help offset ownership costs.
Another advantage is that U.S. citizens don’t have to go through customs when traveling between Puerto Rico and the U.S. mainland. This can be a big time-saver when traveling to or renting out your property.
Guide to Buying Property in Puerto Rico
If you are looking to purchase property on the island, keep these six factors in mind.
1. Real Estate Agents
Buyer’s agents aren’t as common in Puerto Rico as they are in the U.S., as brokers acquire their own listings to which they steer potential buyers. This means you may deal with a number of agents in your property search. Once a broker has shown you all of its exclusive listings, you’ll have to move on to another broker and its portfolio.
As with any real estate purchase, it’s a good idea to deal with reputable, certified agents or nationally recognized real estate brands. Local databases include the Multiple Listing Service of Puerto Rico, as well as Point2Homes and Clasificadosonline.com. But be forewarned: the databases may not be up to date.
Use agents who live and work in the area or community where you’re looking to buy and who speak Spanish. They can advise you on local lifestyle and cultural issues. One of the best ways to get connected with a reputable realtor is to ask around the local community. Keep in mind that if you attempt to do a property search on your own, you’ll need conversational Spanish. Even though English is also an official language in Puerto Rico, not everyone speaks it fluently.
2. Research
If you’re unfamiliar with the local market and what constitutes a legitimate price point, use a third-party service like TasaMax. They provide comparable sales data to financiers and real estate professionals.
You can subscribe to the service yourself (though much of the website uses the Spanish language instead of English). To be on the safe side, it is a good practice to obtain a report on any property that captures your interest. Be sure to compare the quality (and cost) against other condos in the area.
3. Management and Fees
Prior to purchasing, it’s important to determine what is and isn’t included in the homeowners association (HOA) fee. HOA fees typically cover general maintenance for the building, as well as any common areas and facilities, insurance for the complex, and manned security.
Obviously, the more privileges provided and the more manpower required to operate the complex, the higher the cost to its owners.
4. Inspections
Whether the condo is brand new or has been lived in, a licensed home inspector can help ensure the unit is in sound condition. This should extend to the main condo construction and shared facilities. Be sure you personally visit and closely inspect the property. No amount of research is as reliable as seeing the condo and its facilities firsthand.
5. Financing and Legal Concerns
While there’s no obligation to purchase in cash, you can obtain a home equity loan (on your U.S. residence, if you have one), or draw from a U.S. line of credit to purchase your Puerto Rican condo in cash. However, local lending is also an option. Just be prepared for an extraordinary amount of paperwork. Also, have a lawyer review your contract to ensure that your interests are protected.
6. Tax Breaks
In 2012, Puerto Rico passed legislation shielding new residents from paying most federal income taxes. Since then, the island is swiftly emerging as a hot new tax haven for Americans.
If you reside on the island for a minimum of 183 days annually—and meet other qualifying criteria—you may pay minimal (if any) taxes on interest, dividends, and capital gains under the Act 22 tax law. These tax incentives are attracting more entrepreneurs from the U.S. mainland and plenty of new, luxury developments.
Is Puerto Rico Part of the United States?
Puerto Rico is a territory of the United States, so all its residents are U.S. citizens. They must follow U.S. federal laws, but they cannot vote in presidential elections and don’t have a voting representative in Congress.
Do I Need a Passport to Travel to Puerto Rico?
If you are a U.S. citizen, you do not need a passport to fly from the United States to Puerto Rico. U.S. citizens also do not need a passport to fly to Puerto Rico from the U.S. Virgin Islands or Northern Mariana Islands. If you are a citizen of another country, or if you a U.S. citizen traveling from another location, you will need a passport to fly into Puerto Rico.
What Is Act 22 In Puerto Rico?
Act 22 is a tax law in Puerto Rico that incentivizes moving to Puerto Rico. Under the law, if you are a bona fide resident of Puerto Rico for the entire tax year, all Puerto Rican-based income that you earn is exempt from federal income taxes. However, you will still need to pay tax on any income earned from sources outside Puerto Rico. You will also need to pay income tax on any income earned as a U.S. government employee in Puerto Rico.
The Bottom Line
Buying real estate in Puerto Rico offers a number of investment perks for Americans, including flexible finance possibilities, zero immigration concerns, and the potential for tax breaks. It also comes with risks, including from extreme weather and financial instability.
If you are trying to buy property in Puerto Rico, work with reputable, certified professionals who are bilingual in Spanish and English and obtain comparable sales data to ensure the price point is reasonable. Organize a property inspection from a licensed contractor and visit the property personally. And clarify all fees associated with managing and purchasing it upfront.
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