A Long-Awaited Boost for Renters and Landlords in Puerto Rico

Puerto Rican Capitol

In the face of a challenging housing market, a long-awaited bill has been introduced to support access to affordable housing. The bill amends the “Housing Market Stimulus Act” (Law 132-2010) to extend key tax benefits for those who invest in and rent out residential properties—helping both landlords and tenants alike.

Originally enacted in 2010, the law created incentives to stimulate the real estate market, particularly the purchase and lease of newly constructed, never-occupied homes. A crucial component of this incentive package was a tax exemption on rental income derived from qualifying residential properties. However, the exemption was set to expire after 15 years, ending in 2025.

The new bill amends Section 2(b) of Law 132-2010 by removing the time limit on the tax exemption. This means that the exemption for rental income on residential properties will no longer expire in 2025, but will continue indefinitely for qualifying taxpayers.

Key Objectives of the Bill:

1. Support renters by promoting equitable tax treatment for those who do not own their homes.

2. Encourage real estate investment by maintaining tax incentives for residential landlords.

3. Stimulate housing supply by incentivizing the long-term development and leasing of housing units.

4. Promote economic stability by reinforcing the government’s commitment to the housing sector.

   
   

This is a timely and positive step forward. Renters who contribute to the economy but lack the resources to purchase a home are often taxed at rates up to 15% with limited deductions. By keeping the exemption in place, this measure aims to correct that imbalance and continue encouraging the availability of safe and affordable rental housing.

We will continue monitoring the progress of this bill. If approved, the amended law should be carefully evaluated by landlords and tax professionals to ensure compliance with all legal requirements to claim the exemption and maximize its benefits.