Understanding the Tax Landscape When Selling Real Estate in Puerto Rico

Selling property in Puerto Rico involves more than finding the right buyer and signing the contract. It also means navigating a unique tax and regulatory environment — one that blends local and U.S. laws, requiring careful handling to ensure compliance and maximize profits.

At Puerto Rico Real Estate, PSC, we guide sellers through every step — from understanding capital gains taxes and CRIM certifications to evaluating Act 60 benefits and preparing the right documentation for a seamless closing.

Here’s a comprehensive breakdown of what to expect when selling real estate in Puerto Rico, and how we make the process easier for you.

1. Capital Gains Taxes in Puerto Rico

When you sell your property, any profit earned is considered a capital gain, which may be subject to taxation. However, Puerto Rico’s tax structure offers unique advantages — especially for long-term property owners or those who meet specific local residency criteria.

Short-Term vs. Long-Term Capital Gains

• Short-Term Gains: If you owned the property for one year or less before selling, the profit is taxed as ordinary income, based on Puerto Rico’s individual tax rates (up to 33%).

• Long-Term Gains: If you’ve owned the property for more than a year, your profit is typically taxed at a 15% capital gains rate, one of the lowest in the U.S. and its territories.

Primary Residence Exemption

If the property was your primary residence, you might qualify for exemptions that reduce or eliminate capital gains taxes. Documentation showing you lived there — such as utility bills and CRIM records — is often required.

Foreign or Non-Resident Sellers

If you live outside Puerto Rico but own property on the island, you’re still subject to Puerto Rico’s capital gains tax — but not U.S. federal capital gains taxes (since Puerto Rico is treated as a separate tax jurisdiction).

Puerto Rico Real Estate, PSC works closely with accountants and tax professionals to help sellers calculate and minimize these liabilities.

2. CRIM: What It Is and Why It Matters

The Centro de Recaudación de Ingresos Municipales (CRIM) is Puerto Rico’s municipal tax authority. It collects property taxes that fund local municipalities. Before selling, you must ensure your CRIM account is current and paid in full.

The Role of CRIM in Property Sales

During the sale process, your closing attorney or notary public will request a “Certificación de No Deuda de Contribución sobre la Propiedad” (Certificate of No Debt) from CRIM. This document verifies that there are no outstanding property tax balances.

Without it, the closing cannot proceed.

Seller Responsibilities Include:

• Confirming CRIM bills are up to date.

• Ensuring the property is properly registered under your name.

• Providing the Número de Catastro (Cadastral Number) to your real estate agent and attorney.

Our team at Puerto Rico Real Estate, PSC ensures that all these details are verified early, avoiding costly closing delays.

3. Act 60: Tax Incentives That Attract Buyers — and Benefit Sellers

The Puerto Rico Incentives Code (Act 60) offers significant tax advantages to individuals and businesses relocating to Puerto Rico. Although primarily geared toward buyers and investors, understanding Act 60 can benefit you as a seller.

Why It Matters for Sellers:

1. Increased Buyer Pool: Many Act 60 residents are high-income professionals looking for luxury or investment properties on the island. Marketing your property to this demographic can increase exposure and value.

2. Investment Appeal: Properties that meet Act 60 residency or commercial criteria are often in higher demand — especially in areas like Dorado, Guaynabo, Rincón, and San Juan.

3. Tax-Friendly Transactions: Sellers relocating off-island may qualify for partial exemptions on capital gains earned while living in Puerto Rico.

At Puerto Rico Real Estate, PSC, we understand how to market properties to Act 60 buyers effectively, ensuring your listing attracts serious, qualified investors.

4. Other Seller Tax Obligations and Fees

In addition to capital gains and CRIM, a few other tax considerations apply to most Puerto Rico real estate transactions.

a. Notary and Stamp Fees

In Puerto Rico, all real estate transactions must be formalized by a licensed notary public (attorney). Sellers typically share closing costs, which include government stamps and filing fees — averaging 1% to 2% of the sale price.

b. Municipal Sales Tax (IVU)

If the sale includes personal property (like furniture or appliances) as part of the transaction, an 11.5% IVU (Impuesto sobre Ventas y Uso) may apply.

c. Withholding for Non-Residents

If you’re a non-resident seller, the buyer or closing attorney may withhold a percentage of the proceeds for potential tax liabilities until final filings are complete.

Our team ensures you understand each obligation and helps coordinate with legal and accounting professionals to ensure accurate filings.

5. Required Documents Before Selling

Selling real estate in Puerto Rico involves various legal documents that must be gathered before listing your property. Working with a professional real estate agency ensures all paperwork is handled correctly.

Essential Documents Include:

• Title deed (Escritura)

• Property survey (Planimetría or Mensura)

• CRIM certification of no debt

• ID and marital status documentation

• HOA or condominium dues clearance

• Property tax and utilities paid receipts

At Puerto Rico Real Estate, PSC, we organize these details from the start, saving time and ensuring a smooth transaction when you reach the closing table.

6. Timing Your Sale and Managing Deadlines

Timing plays a major role in your financial outcome. For example:

• Selling before the end of the fiscal year may affect your capital gains liability.

• CRIM payments are due semi-annually, so closing after a payment date might entitle you to a pro-rated refund.

• Act 60-qualified buyers may be more active during certain seasons when relocation deadlines approach.

Our experienced agents analyze your situation and help you identify the optimal window to sell for the best financial result.

7. How Puerto Rico Real Estate, PSC Helps Sellers Navigate Taxes and Compliance

Real estate transactions in Puerto Rico are complex — especially when it comes to taxes and documentation. That’s where we come in.

When you list with Puerto Rico Real Estate, PSC, you gain access to:

1. Comprehensive Market Analysis (CMA): To price your home accurately and competitively.

2. Tax & CRIM Guidance: Assistance gathering certifications, receipts, and clearances before closing.

3. Network of Professionals: We work closely with notaries, accountants, and attorneys specializing in Puerto Rican real estate.

4. Tailored Marketing for Qualified Buyers: Including Act 60 investors and relocation clients.

5. Seamless Transaction Management: From listing to closing, our team handles all logistics and paperwork.

We ensure your sale is not just successful — but compliant, profitable, and stress-free.

8. The Puerto Rico Real Estate, PSC Advantage

Here’s why so many property owners trust us to sell their homes and investments across the island:

• Local Expertise: Decades of experience navigating Puerto Rico’s real estate laws and tax system.

• Bilingual Service: We bridge communication between local authorities and off-island buyers.

• Professional Integrity: Transparent, ethical, and client-focused representation.

• Personalized Support: We tailor our approach to your property, location, and financial goals.

When you choose Puerto Rico Real Estate, PSC, you’re partnering with professionals who understand both the market and the law — ensuring your sale is in good hands.

Final Thoughts: Selling in Puerto Rico Doesn’t Have to Be Complicated

Selling real estate in Puerto Rico offers incredible opportunities — but also important responsibilities. From capital gains and CRIM obligations to Act 60 tax advantages, every detail matters.

With the right guidance, you can sell your property quickly, avoid costly mistakes, and maximize your profit.

Contact Puerto Rico Real Estate, PSC to navigate taxes and paperwork correctly.

Contact Information:
Puerto Rico Real Estate, PSC
📞 787.244.6364
📧 [email protected]
🌐 www.ThePuertoRicoRealEstate.com

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