Rincón’s unique and diverse natural resources, combined with its proximity and relationship to the United States have driven a steady rise in tourism, new residents and new businesses. With each passing year, an increasing number of amenities are being offered to visitors and residents. Over the last decade, the Aguadilla Airport – the closest to Rincón – has seen passenger growth reaching over 400%.
This annual flow of visitors and new residents has been able to sustain a rental housing market that is no longer seasonal. High-quality vacation rental properties have seen occupancy rates in excess of 50% throughout the year as the increasing popularity of Rincón has generated year-round rental income for property owners.
New government incentives are providing benefits to new residents of Puerto Rico, creating a rise in new homeowners and entrepreneurs. Both export service providers and individual investors are eligible for two new prominent tax break incentives on the island.
The Export Services Act of 2012 (Act 20) encourages local service providers to expand their services to companies and persons outside of Puerto Rico and seeks to attract outside service entities via tax incentives to relocate to the island for the purposes of stimulating economic growth and social improvement. This provides tax benefits to the companies including a 4% corporate tax rate, 100% tax exemption on dividends and 100% exemption on property taxes for certain export business services.
Likewise, the Individual Investors Act of 2012 (Act 22) seeks to attract new residents to Puerto Rico by offering a total exemption from Puerto Rico income taxes. Qualifying new residents are eligible for 100% tax exemption on interest and dividend income as well as long-term capital gains.
For those enjoying or considering Act 20 or 22 exemptions, Dos Ceibas offers a compelling alternative primary residence to the urban lifestyle of San Juan or a fantastic second home just a short drive from the metropolitan area.
Investors in Dos Ceibas can enjoy income tax exemptions on rental income through 2020. These tax savings represent a significant opportunity for higher returns on investment and can dramatically improve cash flows.
For example, a $650,000 investment at Dos Ceibas could yield an extra 73% return over a comparable investment with similar cash flows in New York from 2014 - 2020.
Even without the tax exemption, rental incomes can realistically yield positive cash flows for established properties; thereby reducing or eliminating the ongoing carrying costs for owners.