How to buy real estate in Puerto Rico as a foreigner? How high are realtors' and lawyers' fees in Puerto Rico? What about other property purchase costs?
This article is an overview of what you can expect when purchasing real estate in Puerto Rico. We cover the costs, taxes, process and some of the legal aspects.
How to purchase property in Puerto Rico?
Foreigners can freely buy property in Puerto Rico. To enter into a real estate transaction, it is important to hire a real estate agent as knowledge in Spanish is very much needed.
When an agreement has been reached, a deposit of 5% of the purchase price is usually paid by the buyer. The deposit is non-refundable if the buyer decides to back out of the transaction. In case the seller backs out, the seller will pay the buyer twice the amount of the deposit or earnest money provided.
The seller usually pays for the notary's fees, and real estate broker's commission (unregulated). The buyer, aside from the down payment, also pays for title insurance and documentary stamps on the deed. Additional costs may include appraisal and inspection fees. Property taxes, on the other hand, are prorated. Since property taxes are usually paid at the end of the year, the buyer and the seller share the expense according to the number of months each owns the house during the year of the transaction.
All real estate titles are recorded in the Registry of Property. The titles are further categorized into subsections according to the territory where the property is located. It is important to file the title of the property under the correct section to prevent any objections from the Registry officials, who check the title's legality and requirements.
A foreigner can also take the corporate route to acquiring property in Puerto Rico. Costs for registering a property obtained through a corporation include US$300 for Corporate Resolution. This is prepared by a notary to authorize the representatives of the buying corporation to appear in the deed of purchase and sale. There also are additional costs for Internal Revenue Stamps. The whole process of registering a property by a corporation can be completed in around 15 days.
Currency:
Puerto Rico uses the US Dollar (USD).
