Introduction: Selling Costs in Puerto Rico Are Not One-Size-Fits-All

Many sellers assume:

• The buyer pays most costs

• Taxes are minimal

• Fees are standardized

In Puerto Rico, that is not always true.

Costs vary based on:

• Property value

• Ownership history

• Capital gains exposure

• Municipality

• Financing vs. cash transaction

• Legal readiness of the property

Understanding these variables before listing is critical to a smooth sale.

1. Capital Gains Taxes in Puerto Rico

What Is Capital Gains Tax?

Capital gains tax applies when you sell a property for more than your adjusted cost basis (what you paid plus improvements).

Puerto Rico has its own capital gains tax structure, separate from the U.S. federal system.

Current Capital Gains Rates (General Overview)

While rates can change and vary by situation, capital gains in Puerto Rico are commonly:

• 15% for long-term gains (most cases)

• Higher if the property was held short-term or under special circumstances

⚠️ Always consult a CPA for your specific situation.

Important Factors That Affect Capital Gains

• Length of ownership

• Inherited property (step-up basis may apply)

• Primary residence exemptions

• Property improvements

• Act 60 or other tax incentive status

At Puerto Rico Real Estate, PSC, we encourage sellers to review tax exposure before accepting offers, not after.

2. Withholding Taxes at Closing

What Is the 4% Withholding?

In many Puerto Rico transactions, 4% of the sales price may be withheld at closing and remitted to the Department of Treasury as a prepayment toward capital gains taxes.

This applies most commonly when:

• The seller is not a Puerto Rico resident

• The transaction meets certain criteria

If your actual tax liability is lower, you may be entitled to a refund.

Why This Matters

Sellers who are unaware of this withholding often experience unexpected reductions in net proceeds at closing.

We ensure sellers understand this early and plan accordingly.

3. Notary Fees: A Major Seller Cost in Puerto Rico

Why Notary Fees Are Higher in Puerto Rico

Unlike most U.S. states, notaries in Puerto Rico are attorneys, and they play a central legal role in real estate transactions.

Notary fees are:

• Regulated by law

• Based on the sales price

• Typically paid by the seller, unless negotiated otherwise

Estimated Notary Costs

While exact amounts vary, notary fees often range between:

• 0.5% to 1% of the sales price

This includes:

• Drafting the deed

• Legal certifications

• Formal execution of the transaction

4. Registry of Property Fees

After closing, the transaction must be recorded at the Puerto Rico Registry of Property.

These costs cover:

• Recording the deed

• Updating ownership records

While sometimes overlooked, registry fees are mandatory and are commonly paid by the seller unless otherwise negotiated.

5. Municipal Taxes and Certifications

Before closing, sellers must provide several municipal clearances, including:

CRIM Certification

Confirms property taxes are paid and current.

Certificado de No Deuda Municipal

Confirms there are no outstanding municipal taxes or fees.

Other Local Certifications

Depending on the municipality, additional documentation may be required.

Unpaid municipal balances must be cleared before closing.

6. HOA Fees and Clearance Letters (If Applicable)

If the property is part of a condominium or homeowners association:

• All HOA dues must be current

• A clearance letter is required

Outstanding HOA balances are paid at or before closing and are the seller’s responsibility unless negotiated.

7. Broker Commission: What Sellers Pay

Real estate commission is one of the largest selling costs — and also one of the most important.

What Commission Covers

• Pricing strategy

• Professional marketing

• Buyer screening

• Negotiation

• Transaction management

• Closing coordination

At Puerto Rico Real Estate, PSC, our commission reflects full-service representation, not just listing exposure.

8. Who Pays What? Buyer vs. Seller

Common Seller Costs

• Capital gains taxes

• Withholding (if applicable)

• Notary fees

• Registry fees

• Municipal certifications

• HOA balances

• Brokerage commission

Common Buyer Costs

• Loan fees

• Appraisal

• Buyer’s inspections

• Buyer’s legal costs

Some costs can be negotiated, depending on market conditions and offer strength.

9. Selling an Inherited Property: Special Cost Considerations

Inherited properties may involve:

• Lower capital gains due to stepped-up basis

• Additional legal work

• Heir declarations

• Registry corrections

These factors can increase legal costs but often reduce tax exposure.

We specialize in helping sellers navigate inherited property sales efficiently.

10. Why Sellers Are Caught Off Guard Without Local Guidance

Many sellers are surprised by:

• Withholding taxes

• Notary costs

• Registry delays

• Unpaid municipal balances

These surprises cause:

• Closing delays

• Renegotiations

• Failed transactions

This is why working with a local expert brokerage matters.

11. Why Sellers Choose Puerto Rico Real Estate, PSC

Transparency From Day One

We provide:

• Net proceeds estimates

• Cost breakdowns

• Tax awareness

• Legal readiness checks

Local Expertise

We coordinate with:

• Attorneys

• Notaries

• Accountants

• Municipal offices

So sellers don’t have to navigate the system alone.

12. Our Seller Cost Planning Process

1. Initial financial overview

2. Tax exposure discussion

3. Municipal verification

4. HOA review (if applicable)

5. Net proceeds estimate

6. Offer analysis with costs in mind

7. Closing coordination

13. Final Thoughts: Informed Sellers Win

Selling property in Puerto Rico isn’t just about the price you accept — it’s about what you walk away with.

Understanding taxes, fees, and closing costs allows sellers to:

• Price correctly

• Negotiate confidently

• Avoid surprises

• Close successfully

Puerto Rico Real Estate, PSC ensures sellers are prepared, protected, and positioned for the best possible outcome.

Company Contact Information

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

#PuertoRicoRealEstate
#SellPropertyPR
#ClosingCostsPR
#PuertoRicoRealEstatePSC
#RealEstateTaxes