Puerto Rico’s luxury real estate market isn’t just thriving—it’s evolving, shaped by powerful economic incentives like Act 60. Formerly known as Act 22, this legislation provides substantial tax benefits to individuals relocating to the island, including 0% capital gains tax, 0% federal income tax, and a reduced 4% local tax. Importantly, the act requires participants to purchase property, creating consistent demand that disrupts traditional supply-and-demand dynamics. High-net-worth individuals leveraging gains from bullish markets are increasingly drawn to Puerto Rico as an attractive destination for these tax incentives.
The Trump administration’s focus on reshoring manufacturing through tariffs and tax incentives could further boost Puerto Rico’s real estate market. The island’s well-established manufacturing sector, which contributes over 40% to its GDP, is positioned to benefit from policies promoting regionalization. This shift is likely to increase demand for industrial and commercial properties, complementing the momentum already seen in luxury and hospitality projects.
Another significant factor is the influence of billionaire investor John Paulson, one of Puerto Rico’s most prominent stakeholders in the hospitality and luxury real estate sectors. A close ally of the president, Paulson’s investments underscore the growing confidence in the island’s potential. Large-scale developments such as Moncayo in Fajardo and Esencia in Cabo Rojo highlight the island’s appeal as a hub for luxury living and economic growth. Relationships like Paulson’s with policymakers may further position Puerto Rico as a global player in the luxury market.
The interplay of these factors paints a promising picture for Puerto Rico’s real estate market, particularly in sectors fueled by Act 60 and supportive economic policies. The demand for luxury properties, paired with potential growth in industrial and commercial real estate, suggests a dynamic and upward trajectory. However, as with any market, outcomes will depend on broader economic conditions, the implementation of public policies, and investor sentiment. For now, Puerto Rico remains uniquely positioned to thrive in an evolving economic landscape.