Puerto Rico Residential Report, H1 2020
As one of the most dynamic and competitive economies in Latin America and the Caribbean, Puerto Rico has a population of 3.1 million (as of 2019) people, with approximately 1.5 million housing units spread throughout the island. The average monthly rent for non-luxury housing in Puerto Rico was estimated at approximately $500 USD in 2018; however, the islands dynamic and multi-dimensional housing landscape is better aggregated by zip code.
With an overall favorable business environment for investors, Puerto Rico is home to some of the most attractive and noteworthy business incentives in the United States. In 2020, alongside efforts to expand the benefits of Puerto Rico’s economy, the government expanded the opportunities of several arenas within the corporate tax incentives code by consolidating laws 20 and 22, which established a 4 % corporate income tax rate, 0 % rate on dividends distribution, 75 % property tax exemption, 75 % construction tax exemption, and 50 % exemption on other municipal taxes, into a single broader more robust law now entitled Act 60. Eligible activities include manufacturing, R&D, Finance, Advertising, Technology, Medical Tourism and general exports of goods and services, among others. To learn More on these and other current business incentives JLL has complied tax incentive information in our Puerto Rico Real Estate Investment Guide, 2020.
Puerto Rico has long been known to be a U.S territory that combines both lifestyle and economics, as it is both part of the United States while having autonomy of governance. However, as Puerto Rico is not a ratified state in the union, Puerto Ricans do not qualify to participate in federal elections and have a non-voting representative in the House, and therefore residents are not required to pay U.S. Federal taxes. Unlike other Caribbean, Latin American and global markets, the most prevalent investment advantage in Puerto Rico is the islands currency is the U.S. Dollar, residents are U.S. citizens, assets and businesses are under U.S. legal jurisdiction, and practices GAAP procedures under the supervision of the Federal Bureau of Investigation. The attractiveness of the island both physically and economically has been drawing new residents for years; however, the COVID 19 global pandemic has increased demand for class A residential real estate substantially, as former city dwellers seek alternatives amidst unprecedented changes to how we work and live.