Wealthy Homebuyers are Flocking to Puerto Rico: Per WSJ
The Wall Street Journal published an article this morning as to why wealthy homebuyers are flocking to Puerto Rico. A link to the article is down below. For those that don’t have a subscription, here is a synopsis:
Wealthy homebuyers are increasingly attracted to Puerto Rico due to favorable tax policies, warm weather, and the rise of remote work. This has transformed the island into a full-time destination for high-net-worth individuals. Luxury housing market in Puerto Rico is booming, with investors and developers capitalizing on the growing demand for high-end homes. Tax incentives, known as Act 60, play a significant role in driving the surge in the market. These incentives allow individuals and corporations relocating to Puerto Rico to enjoy tax benefits, such as not paying federal income taxes on income sourced in Puerto Rico. The requirement to own a home on the island has further fueled the buyer pool. The island's warm climate, coupled with the adoption of remote work and low cost of living, has accelerated the trend of wealthy individuals buying primary and vacation homes in Puerto Rico.
The luxury housing market has seen several notable deals, including a $40 million home sale, setting a record for the island. Dorado Beach Resort, a wealthy enclave on the north shore of the island, has experienced a significant increase in median sale prices for homes priced above $1 million. Other areas, such as Condado, Bahia Beach, and Palmas del Mar, have also witnessed rising prices.
The tax benefits offered by Puerto Rico have attracted wealthy individuals, including crypto entrepreneurs and hedge funders, who have the flexibility to move their businesses. The island's tax policies have transformed it from a place people wanted to visit to a destination for wealthy homebuyers seeking an incredible lifestyle and tax savings. The tax benefits introduced in 2012 have led to an increase in the number of individuals granted tax-exempt status under Act 60. However, the number dropped in 2022 due to the crash in the crypto market.
Early movers who took advantage of the tax benefits include crypto investor Michael Terpin, who relocated to Puerto Rico from Nevada in 2016. Terpin has seen the formation of a crypto community on the island and has found Puerto Rico to be a welcoming place with ample networking and business opportunities. Other individuals, such as business coach Christian Mickelsen, have also embraced the island's tax benefits and resort lifestyle.
Real estate investment has surged in Puerto Rico, with investors capitalizing on the booming market. Some aspirational sellers have listed their properties at high prices, taking advantage of the increased demand for finished homes. Local builders and developers from the mainland U.S. are racing to construct new homes to meet the growing demand.
Here is a link to the full article: https://www.wsj.com/articles/puerto-rico-real-estate-market-58ec50da