The real estate market in Puerto Rico has always been shaped by federal policies, given the island’s unique political and economic ties to the United States. Both of Donald Trump’s presidential terms—2017 to 2021 and the second beginning in 2025—ushered in a wave of federal decisions. Compounded by the pandemic, these effects were often amplified in the early 2020s as the market adjusted to multiple external shocks.
This article explores how Trump-era tax reforms, manufacturing incentives, disaster relief strategies, and federal asset decisions have altered the trajectory of Puerto Rico’s real estate market.
Key Takeaways
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Trump’s Tax Cuts and Jobs Act reduced incentives for relocation but failed to dull the power of Act 60 for luxury investors.
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Delays in Hurricane Maria relief temporarily froze the market but eventually enabled a stronger infrastructure-led recovery.
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Reshoring incentives boosted industrial demand, though tariffs and labor shortages strained development pipelines.
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Recent Act 60 amendments ensure continued tax benefits through 2055, maintaining investor confidence amid reform.
Tax Reforms and Act 60: The Push-Pull for Investors
One of the most enduring influences on Puerto Rico's real estate boom has been its tax incentive regime, particularly Act 60 (formerly Acts 20 and 22). While not initiated by Trump, the Trump presidency’s 2017 Tax Cuts and Jobs Act (TCJA) lowered corporate taxes on the mainland, reducing the comparative advantage of relocating to Puerto Rico. Still, Act 60 remained highly attractive due to its offerings:
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0% federal income tax
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0% capital gains tax (rising to 4% for new applicants in 2026)
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4% corporate tax rate for export services
These tax perks drove wealthy investors, particularly in the luxury segment. As a result, places like Dorado and Rincón witnessed a surge in multimillion-dollar property transactions and custom-built villas. The policy environment even led to celebrity relocations such as YouTuber Logan Paul, whose move symbolized how Puerto Rico became a haven for crypto and high-net-worth individuals.
However, this market behavior intensified criticism. Home prices increased by over 60% between 2012 and 2021, raising concerns about displacement and affordability for local residents.
Hurricane Relief and Infrastructure Development
Image Source: theguardian.com
The Trump administration’s delayed response to Hurricane Maria in 2017 had profound short-term consequences for real estate. An investigative report revealed that Trump officials obstructed the release of nearly $20 billion in federal disaster relief funds, slowing the restoration of power, water, and housing infrastructure. HUD officials described the holdback as “holding disaster relief funds hostage,” leading to an infrastructure paralysis that depressed the housing market in affected areas.
Market sentiment weakened as potential buyers hesitated amid prolonged blackouts and damaged roads. Eventually, the administration did release significant aid:
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$13 billion for electrical grid restoration in 2020
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$3.7 billion for water treatment infrastructure in early 2021 (Al Jazeera)
This eventual investment helped real estate values rebound in areas where critical services were restored, laying a foundation for sustained development, albeit years later than needed.
Federal Property Management
Image Source: nytimes.com
In early 2025, the Trump administration made headlines by proposing the sale of 443 federal properties, including assets in Puerto Rico. The portfolio represented nearly 80 million square feet across the U.S., with potential annual savings of $430 million in government operating costs. While initially signaling opportunity for commercial developers, the administration reversed this decision after overwhelming demand, instead of reevaluating the properties' potential.
This back-and-forth created short-term market confusion and slowed several prospective transactions. Nonetheless, the episode underscores the Trump administration’s emphasis on shrinking federal holdings, which could impact Puerto Rico’s public land use and commercial real estate inventory in future waves.
Industrial and Manufacturing Reshoring
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Trump’s emphasis on reshoring manufacturing dovetailed with Puerto Rico’s existing strengths in pharmaceuticals and biotech. The island produces over 40% of its GDP from manufacturing, making it an attractive U.S. supply chain reconfiguration base.
This alignment boosted demand for industrial real estate and mixed-use development near manufacturing hubs. High-profile developments like Moncayo in Fajardo and Esencia in Cabo Rojo rode this momentum.
However, the proposed 10%+ tariffs on imported goods—including building materials—posed a threat. These policies:
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Raised construction costs
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Threatened developer margins
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Delayed project timelines
Such ripple effects weakened investor confidence, particularly for mid-tier residential and commercial developments operating on tight budgets.
Labor Shortages: Immigration Policy and Construction Crunch
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The Trump administration's immigration curbs contributed to labor shortages in hospitality, agriculture, and especially construction—three critical pillars of Puerto Rico’s real estate sector. Developers cited rising wages and long wait times for skilled trades as primary barriers to completing projects on time. Combined with post-hurricane rebuilding demands and tariff-induced material costs, the labor squeeze magnified operational costs, discouraging new entrants into the development pipeline.
Act 60 Reform in 2025: Stability or a Sign of Transition?
Image Source: relocatepuertorico.com
Following notable market movements in 2024, Governor Jenniffer González Colón proposed amendments to Act 60 in 2025, extending it through 2055, offering reassurance to long-term investors. However, introducing a 4% tax on capital gains, interest, and dividends for new applicants (effective January 1, 2026) reflects growing concern over social equity. These changes aim to preserve Puerto Rico’s investment appeal while addressing criticisms that the tax haven model fosters inequality.
The reform signals continued strength in the real estate sector's luxury and commercial segments, but it likely moderates speculative inflows going forward.
Impact of Trump-Era Policies on Puerto Rico Real Estate
Image Source: chathamhouse.org
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Policy Area |
Impact on Puerto Rico |
Market Segment Affected |
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Tax Reforms |
Reduced the federal corporate tax advantage of Act 60 but preserved investor interest |
Luxury Residential |
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Disaster Relief Delays |
Suppressed early recovery and delayed infrastructure restoration, temporarily slowing economic growth in affected regions. |
Infrastructure & Housing |
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Federal Property Management |
Proposed mass sale and withdrawal of federal real estate listings |
Commercial & Public Sector |
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Tariff & Industrial Policy |
Encouraged manufacturing reshoring, but increased construction costs |
Industrial & Mixed-Use |
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Immigration & Labor Policy |
Labor shortages in the construction and hospitality sectors |
Residential Development |
What Does This Mean for Puerto Rico Luxury Real Estate?
Image Source: investopedia.com
Despite the policy turbulence, Puerto Rico’s luxury real estate market remains resilient, attractive, and full of opportunity—especially for long-term investors and high-net-worth individuals seeking tax advantages, lifestyle benefits, and strategic holdings in U.S. territory.
A Mixed Bag with a Silver Lining
Federal policies under the Trump administration, particularly around tax reform, disaster relief, and reshoring incentives, have sent mixed signals to the Puerto Rican market:
|
Policy Impact |
Outcome for Luxury Real Estate |
Short-Term vs. Long-Term |
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Mainland Tax Cuts (TCJA) |
Reduced urgency for tax migration, but Act 60 remains strong |
Short-term dip, long-term steady |
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Post-Maria Delays in Relief |
Slowed early recovery, but eventually strengthened infrastructure |
Short-term setback, long-term gain |
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Act 60 Amendments (2025) |
New taxes for future applicants, but clarity through 2055 |
Long-term policy stability |
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Manufacturing Reshoring + Tariffs |
Boosted demand for industrial land; construction costs rose |
Net positive for mixed-use & luxury markets |
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Immigration & Labor Constraints |
Slowed construction timelines |
Pressure short-term; opportunity for premium-priced new builds |
Bottom line: While the road hasn’t been smooth, Puerto Rico’s luxury real estate sector has emerged more defined, mature, and rich with long-term value.
Why Puerto Rico Still Stands Strong — and Why You Should Act Now
If you're considering investing in Puerto Rico luxury real estate, now is an advantageous time for several key reasons:
Enduring Tax Incentives
Even with minor reforms, Act 60 remains one of the most favorable tax regimes in the United States, offering:
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0% federal income tax
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0% capital gains tax for existing decree holders
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4% corporate tax for qualifying businesses
These benefits are protected through 2055, giving investors predictability and planning power.
Infrastructure Investment Has Leveled the Playing Field
Delayed though it was, over $40 billion in federal investment has revitalized roads, energy, and water systems—restoring confidence for developers, buyers, and high-end property owners.
Lifestyle & Location Like No Other
From the beachfront estates in Dorado and Rincón to the refined urban penthouses in Condado and Old San Juan, Puerto Rico offers a seamless blend of U.S. infrastructure, Caribbean charm, and international appeal.
A Word of Encouragement: The Market Has Grown Up
Rather than being discouraged by policy headwinds, view this moment as a signal that Puerto Rico’s real estate landscape is moving past speculative chaos into a strategic, high-quality growth phase.
For savvy investors, this means:
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Better long-term returns from well-positioned properties
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A tighter, more premium market that rewards smart entries
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Reduced volatility as the economy stabilizes and reforms settle
Now is the time to position yourself at the forefront of this maturing luxury market.
Partner with Christie's International Real Estate Puerto Rico
At Christie’s International Real Estate Puerto Rico, we specialize in matching discerning investors with the island’s most exceptional properties. Backed by the world-renowned Christie’s brand, we offer:
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Personalized guidance from experts in Puerto Rican tax and property law
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Access to off-market and high-demand listings
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Deep knowledge of luxury enclaves like Dorado, San Juan, Palmas del Mar, and beyond
Below is a showcase of Puerto Rico luxury properties for sale, a testament to the island’s resilient high-end market. Each listing represents the unique blend of elegance, location, and long-term value that continues to define Puerto Rico’s luxury real estate landscape.
Puerto Rico Land for Sale
2021 CALLE ITALIA, SAN JUAN, PR 00911
This is a rare opportunity to own an 8,500 sq. ft. beachfront lot with permitted plans on Calle Italia in Ocean Park, one of Puerto Rico's most coveted neighborhoods. The lot offers 66 feet of direct beach access and is close to top schools, dining, and recreation.
LOT 8 VILLA DORADO ESTATES, DORADO, PR 00646
Embrace the pinnacle of luxury with Lot 8 Villa Dorado Estates, an exclusive 0.99-acre beachfront lot within Dorado Beach Ritz Reserve. Offering spectacular water views, permitted plans, and direct access to six-star resort amenities, it is one of the most coveted opportunities in Puerto Rico real estate.
Puerto Rico Luxury Homes for Sale
Fairways Villa DR #14 DORADO PR, 00646
Experience serene island living at Fairways Villa #14 in Dorado Beach East—a 3,412 sq ft residence blending timeless design with modern comforts, featuring an open layout, chef’s kitchen, lush garden views, and access to Ritz-Carlton Reserve amenities, embodying the essence of Puerto Rico luxury real estate at $1,143 per sq ft.
23 HARBOUR LIGHTS DR HUMACAO PR, 00791
Live effortlessly in this 4,500 sq ft turnkey estate at Harbour Lights Estates in Palmas del Mar—featuring 5 bedrooms, a home gym, sauna, saltwater pool, and solar upgrades, all within Puerto Rico’s premier resort community, blending luxury, sustainability, and lifestyle at $954 per sq ft.
Puerto Rico Luxury Condos for Sale
1501 MIRSONIA #601, SAN JUAN, PR 00911
Experience elevated living in this fully furnished 3,181 sq ft smart home at Cond. Mirsonia in Condado features private elevator access, a 777 sq ft terrace with custom pergola, luxury appliances, and designer interiors, all just steps from top schools, parks, and beaches in prime Puerto Rico real estate.
1149 ASHFORD AVENUE VANDERBILT RESIDENCES #2004 SAN JUAN PR, 00907
Live above it all at Residence 2004 in the pre-construction Vanderbilt Residences on Ashford Avenue—offering 3,283 sq ft of sleek, ocean-facing interiors, a 470 sq ft terrace, Poliform Italian finishes, and unmatched luxury amenities in the heart of Condado, redefining Puerto Rico real estate at $1,523 per sq ft.
Conclusion: Divergent Legacies, Converging Outcomes
The Trump administration’s policies brought both challenges and opportunities to Puerto Rico’s real estate market. Tax reforms and manufacturing incentives boosted the luxury and industrial sectors, while delayed disaster relief and affordability issues exposed areas of vulnerability. Yet, with Act 60 extended and reshoring trends accelerating, Puerto Rico remains a uniquely positioned investment haven within U.S. jurisdiction. As the island stabilizes and evolves, a balanced approach that aligns investor incentives with community needs offers a promising path toward long-term, resilient growth.
At Christie’s International Real Estate Puerto Rico, we specialize in navigating the complexities of real estate policy to deliver elite investment opportunities that endure. We provide personalized support for clients who wish to buy, sell, or rent luxury properties across the island’s top enclaves. Contact our team today to schedule a consultation or private showing.
Let us help you turn policy complexities into a powerful opportunity for generational investment.
FAQs
What is the real estate market in Puerto Rico like in 2025?
In 2025, Puerto Rico’s real estate market—particularly in the luxury and industrial sectors—continues to thrive, shaped by long-term policy influences like Act 60 and ongoing federal investments. Despite past challenges such as delayed disaster relief and labor shortages, the extension of Act 60 through 2055 and renewed interest in manufacturing have strengthened investor confidence. High-net-worth individuals and businesses are still actively acquiring property in areas like Dorado, Condado, and Rincón, where lifestyle, tax benefits, and infrastructure upgrades create a compelling investment climate.
Are there any risks for new investors entering Puerto Rico’s real estate market in 2025?
While Puerto Rico offers significant advantages—primarily through Act 60—new investors should be aware of evolving policy reforms, rising construction costs due to tariffs, and ongoing debates around housing affordability and local displacement. Additionally, the 2026 implementation of a 4% tax on capital gains, interest, and dividends for new Act 60 applicants may reduce net returns compared to earlier entrants. Conducting due diligence with local legal and tax experts is essential to navigate these risks effectively and secure long-term success.
