Hey All! I have a few questions geared towards those who own STR'S in Puerto Rico. For those that do Im sure yall know about Act 74. Can someonenexplain to me how these tax credits work if the investor does NOT live on the island? To be clear Im NOT asking for tax advice. I just would like to know in real life how does the tax credit work. Ex: Tax credit of 10% total project cost or 50% of cash from investors.
Im also looking for reccomendation for cleaning services and handymen in the San Juan metro area and also east to Humacao! Any and all advice is welcomed. Thank u!
Michelle, Here is my understanding - this may be off, I'm not an attorney or CPA. The tax credits are issued by Tourism. They used to be Act 74, now part of Act 60. They are based on 40% of your entire project cost (purchase/rehab) and 1st year operations. You must be preapproved before you acquire the property or your purchase doesn't count. This must be a commericial short term rental (guest house 7 rooms, Bnb 3-5 rooms or a hotel) Not a single family house. Residency in Puerto rico by the owner has nothing to do with it. These are Puerto Rico tax credits, not IRS tax credits. The tax credits are generally sold on an exchange for roughly 90 cents on the dollar. The tax credits are issued in tranches over 3-6 years. In our REIA meetings, dealmakers breakfast club and lunch & learn, and bus tour we discuss the tax credits quite a bit. Link in bio for more info.