Tax incentives for the Rich are very attractive as of now
The crisis associated with the Covid-19 epidemic has not reflected on the real estate sector in Puerto Rico, as the arrival of Americans in search of tax benefits led to a historic breakthrough for the sector, especially luxury. An explosive up in the sale of luxury/entertainment boats.
Prominent representatives on the island of luxury real estate and luxury boats confirmed to the press that unlike other sectors where the pandemic has taken its toll, their sectors have witnessed unprecedented growth this year.
Francisco Diaz Fournier, the owner of the Real Estate Luxury Collection, told the press that without a doubt this year of the epidemic has been very positive for his corporation, which is perhaps the most prominent in the luxury real estate sector.
“There is no stock to supply demand, which makes prices rise dramatically,” says Diaz Fournier, who remembers that in Puerto Rico now, they pay more than $ 1,000 per square foot, similar numbers for Miami, New York or San Francisco. .
Diaz Fournier points out that the arrival of US citizens in Puerto Rico in search of tax incentives is the reason that has transformed the sector.
An excellent example of the sudden boom in the luxury real estate sector during the pandemic was the news a month ago that reported that the most expensive home in Puerto Rico’s history had been sold for $30 million.
The property is located in the municipality of Dorado, about 20 minutes from the capital, San Juan, near the luxurious Ritz-Carlton Reserve Hotel.
Although it was a record number, it is no exception among homes with millionaires in price. According to the media on the island, the second most expensive house in Dorado sold for $25 million, followed by another for $ 19 million.
Diaz Fournier noted that when the epidemic broke out a year ago, people in the United States of great wealth appreciated moving to places safe from infection and, above all, with favorable financial conditions for their money.
They are avoiding paying millions in taxes.
Local media reports that hundreds of Americans who moved to Puerto Rico failed to pay millions of dollars to federal tax authorities.
Law 22 prefers persons who were not residents of Puerto Rico in the past 15 years prior to the approval of the rule and who maintain investments in or outside the United States to establish their residency on the island.
To encourage the relocation of these investors, this regulation exempts them from paying taxes on passive income, which includes interest, dividends and capital gains from the sale of shares.
The businessman noted that a sale in San Juan, which exceeded $ 7 million, and another in the Condado area of the capital, exceeded $ 3 million, was recently closed.
Thus, Puerto Rico is close to what is happening in other parts of the Caribbean, where, for example, on the island of San Bartolome, a house was recently sold for $ 90 million.
But it is not just housing that is on the rise, as the luxury sailing sector is another sector experiencing a hitherto unknown boom.
Carlos Rodriguez, CFR Yacht Sales director, told the press that during this pandemic year, more boats were sold than ever before, something that few might think in advance at a time when the economy in general is in great trouble. level.
He explained that CFR Yacht Sales, which sells Viking Yachts and luxury English Princess brands, is experiencing an unforgettable sales period.
The CEO explained that two reasons explain this fact and that his clients have commented on it.
The first is for people to choose to purchase a boat as a recreational alternative due to their inability to travel.
The second is that the elderly have begun to buy because of the possibility that this is their last chance to enjoy a boat with a constant threat of possible death from the virus.
People who buy these boats usually do so with loans from banks and they are businessmen and professionals like doctors. ”
These two economic sectors contrast with other sectors that have been seriously affected on the island, such as tourism, restaurants and entertainment, where many jobs have been lost.
