Puerto Rico Attracting Homeowners From The Mainland
U.S. mainlanders are increasingly packing up and permanently moving to Puerto Rico. Besides the obvious appeal of the beautiful coastal landscape and gorgeous weather, Puerto Rico’s low income taxes are a big part of the appeal. “Puerto Rico is a U.S. Commonwealth. It is part of the U.S. but in some ways still independent. It’s tax system is a hybrid, part of the U.S. and well, not.” wrote Robert W. Wood in a recent Forbes article. Robert’s article goes on to state that, “income tax in Puerto Rico is only 4%. Compare that to your combined federal and state income tax burden you may pay now!”
The Puerto Rico Association of REALTORS® (PRAR) recently visited Washington, DC to discuss how they could help the island to continue to be a great place to live and work. One of the topics brought to the table was amending IRS section 1031 so that it would include Puerto Rico. Section 1031 allows homeowners in the U.S. and Virgin Islands to defer paying capital gains taxes if they reinvest their earnings in another property. Including Puerto Rico in this code would mean another incentive for homeowners to relocate as well as an economic boon to the area.