TAXES

We always suggest consulting with an Atty and also an Acct.

CRIM– is the local property tax acronym. YES we all pay property tax, or at least we are required to……. This agency is on a tear to update and acquire all $’s due, and they can go 5 years back plus interest and penaties. Its nothing to mess around with! When you buy, its checked. If taxes arent paid up to date, they get paid at closing. IF a property isnt assessed, or theres an indiction its not properly assessed(additions, exclusion of residents, etc) then theres a withholding calculated and $ remains in escrow for up to 6 years, or until assessment update, and paid up.

Its a bit complicated, but you need to MAKE SURE you are in the system and paying. Theres no excuses anymore.

Full time residents do have benefits. Greatly reduced tax structure. Ask questions or look up on line.

INCOME TAXES– YES! If you have a property that generates income, you are suppossed to pay income tax to PR. Not sure why this is a surprise to anyone…………… Get an Acct and support the island that supports you!

CAPITAL GAINS TAX- When you sell, you pay. For all the tax incentive programs, consult a tax Atty.

Cap Gains tax is 15% for Residential and 20% for Corporate (LLC , etc) As a full time resident, this gets paid at regular tax time in April.

FOR NON RESIDENTS, THIS $ GETS WITHHELD AT CLOSING AND PAID INTO HACIENDA by 15th of motnth following closing. Its the law. There’s a process if you want to file while the $ is in escrow….OR, you file with a regular tax submission if you want to get a refund. The only automatic deductions at closing from the slaes price, are purchase price, commission, and legal expenses for any mortgage cancelation. ALL CAPITAL IMPROVEMENTS have to be claimed and submitted. We have found it honestly easist to get a good acct. and file regular tax filing and claim deductions vs thry to do it withing the window allowed whils $ is in escrow.

Money is held by a title comppany if bank financing occurs, or by the Broker if a cash deal.

The tax exchange most of us are familiar with (IRSC 1031), IS NOT VALID HERE . . . FACT!  We do not pay Federal Taxes here, so it does not work.