Buying a house in Puerto Rico allows you to enjoy the beautiful beaches and gorgeous weather to the comparatively low living costs and vibrant Caribbean culture. As a U.S. territory, Puerto Rico is one of the most popular vacation and second home destinations for U.S. citizens.
Tax incentives make Puerto Rico an attractive place to buy property. The 2019 enactment of Puerto Rico’s Act 60 requires that property be purchased within two years after obtaining a decree.
If you want to keep your Act 60 Individual Resident Investor tax benefits, which offer a 100% exemption from capital gains taxes on interest, dividends, long- and short-term capital gains, and cryptocurrencies, you’ll need to buy a home in Puerto Rico.
Where to Buy a House in Puerto Rico
Finding a location is the first step in purchasing a house in Puerto Rico. Whether you’re searching for a beachside abode or a mountain retreat, Puerto Rico has something for you.
There are several hot real estate markets in Puerto Rico including San Juan, Palmas del Mar, Dorado Beach, and Bahia Beach, all popular among foreign buyers. There is no shortage of entertainment options for Puerto Ricans in San Juan, which houses most of the island. There are three beachside resort communities in the Caribbean that are popular with expats looking for a tropical getaway: Palmas del Mar, Dorado Beach, and Bahia Beach. Luxury, security, and comfort are all offered in these communities, but prices are rising rapidly.
Although Puerto Rico is generally no more dangerous than the U.S., when buying a house in Puerto Rico, please note that some neighborhoods may have a higher level of crime than others. The island’s capital, San Juan, is a popular destination for expats, and old districts like Old San Juan have a rich history, but it’s best to stay away from some areas. Find the Best Gated Communities in Puerto Rico
Puerto Rico Mortgage
Most homebuyers will need a mortgage to purchase their home. Unless you plan to pay cash, Puerto Rico requires you to show evidence of sufficient funds if you plan to buy a house. You’ll need a good credit score and enough liquid funds to put down 20% on a home loan in Puerto Rico. FHA loans are the exception, allowing you to purchase with a 3.5% down payment if you qualify. Nevertheless, Puerto Rico has a maximum loan limit of $356,362.00 under the FHA as of 2021. Please use our mortgage calculator Puerto Rico.
Choosing a mortgage broker-or loan officer if you’re forgoing the mortgage broker-can present some challenges if you don’t speak Spanish well. You’re better off working with a broker who speaks fluent English. He can easily explain all the terms and conditions to you in English if Spanish isn’t your strong suit.
There will be a lot of paperwork and higher rates than in the US-especially if you decide to go the FHA route.
In addition to the Hacienda stamps, registration and filing fees, and attorney’s fees, buyers also pay minimal fees when they make a transaction. In total, buyers pay between 1.15 and 2.5% in fees. Once an agreement is reached, a deposit usually ranging from 5–10% will also be required in order to move forward.
Last but not least, make sure that you keep your documents organized in cloud storage services that you can access at any time. You might misplace them and have to send them more than once.
Puerto Rico Property Lookup
When you’ve determined a location or several locations, it’s time to start looking for a house in Puerto Rico. Buying a home in Puerto Rico is very different from buying one in the United States, so educate yourself on the process to avoid buyer’s remorse.
Real estate agents in Puerto Rico usually work as dual agents. Thus, representing both sellers and buyers. Puerto Rico Realtors guide buyers to their own listings. Once you’ve exhausted one realtor’s repertoire, you’ll need to work with another one. The seller will typically cover the buyer’s realtor’s commission, although some buyers must pay a “hunter’s fee.”
If you hire a Puerto Rico buyer’s agent, sometimes called a cooperating broker or co-broker, the commission fees are usually split 50–50 between the two agents. In some cases, the agent may have to negotiate their fees with the seller’s agent, which can result in delays.
In addition, hiring a lawyer is a good idea. If you’re entering into an unfamiliar housing market in a foreign language, a lawyer’s assistance is invaluable when you’re navigating an unfamiliar housing market.
By adding provisions to the option agreement, you can make the decision to purchase conditional on the home’s inspection and appraisal results showing that any problems have been fixed.
Puerto Rico Title Search
Whether you’re purchasing a property for cash or through a bank, you will need a Puerto Rico Title Search. The average cost of a title search in Puerto Rico is around $100. Puerto Rico has complex inheritance laws that can make properties unmarketable for years and cost thousands in legal fees in order to alter.
Puerto Rico Comparable
The use of property listing databases is another area in which buyers should exercise caution. As opposed to the continental United States, Puerto Rico lacks a regulated multiple listing service (MLS), and its two most popular real estate listing databases often contain outdated, duplicate, or otherwise inaccurate information.
Despite the fact that Zillow technically works in Puerto Rico, it is rarely used by buyers and therefore not very useful to them. There is a possibility that you will find great properties only to discover that they have already sold.
If you’re looking for puerto rico comparable, be warned: it’s not as easy as it is in the United States. Homebuyers may have difficulty finding comparable sales data and may not always rely on it. Discrepancies in prices are common in Puerto Rico, and houses do not always sell at comparable prices. According to our research, TasaMax is the most trusted comp service.
Foreclosure Puerto Rico
Search for Puerto Rico foreclosure homes if you’re looking for lower prices and fewer competitions than foreclosures. Make a gentle inquiry about the property with the homeowner. You may gain the homeowner’s favor if you have a preapproved loan, if you have already inspected the property, or if you can close your offer quickly and salvage some of the homeowner’s credit rating.
Closing a Home in Puerto Rico
All parties involved in a Puerto Rico real estate purchase transaction must physically appear at the lending bank’s office between 15 and 45 days prior to closing. Since Puerto Rico inherited much of its legal tradition from Spain, notaries must also be attorneys, like in many other Latin American countries.
Consequently, the closing process in PR usually takes hours, and the attorney drafts dozens of pages of documents, adding hefty fees. Since many Puerto Rican homeowners fail to pay their homeowner association dues, additional fees may apply. The seller covers all of these fees for the buyer.
Puerto Rico homebuyers may benefit from presenting a predetermined purchase agreement to ease the process of buying a home and protect their interests. A fully customizable template simplifies the drafting process for homebuyers.
The creation of an escrow agreement, which facilitates the transaction and protects both parties’ interests, is equally important. The escrow agreement can also be customized easily, saving the buyer headaches and speeding up the process of Puerto Rico homebuying.
A prenuptial agreement may exist, allowing the deed to be transferred only to one name in the case of a married buyer. As a result, Puerto Rico’s community property laws specify that the couple’s prenuptial agreement must be referenced in the deed. Furthermore, Puerto Rico has complicated inheritance laws that complicate matters even more for foreign buyers: in order to sell a house, multiple heirs must sign.
The family inheritance laws in Puerto Rico automatically position children in a queue for inherited property, so homeowners have little choice in who these heirs are. In the event of no children, the property is passed on to grandchildren, with parents as third in line. Thus, naming a spouse or non-blood heir alone can be challenging.
If you’re looking to buy, rent, or sell property in Puerto Rico, Puerto Rico Real Estate can help you!
Puerto Rico Real Estate Services
Whether you’re looking for real estate in Puerto Rico or a home, Puerto Rico Real Estate Services can help. Our firm is a licensed real estate brokerage (license 13046) that specializes in Puerto Rico real estate.
It is our goal to make your experience with us as professional, comfortable, friendly, and efficient as possible, and with our native English and Spanish-speaking staff, we will overcome any language barrier you may encounter.
It is our goal to help you find the right Puerto Rico House quickly and easily. As a result, you will not have to spend a lot of time and effort searching. If you would like to see current real estate listings for rental or sale, you can do so by clicking here.
Whether you’re buying, renting, or selling a property in Puerto Rico, Puerto Rico Real Estate Services can help you!