STRENGTH – Governor Wanda Vázquez Garced signed the law to add a new section to the Puerto Rico Incentive Code in order to incorporate the provisions of Law 216-2011, the Transitional Law of the Housing Promotion Program, to modify the validity of such provisions expiring this Thursday.
“Puerto Rico today has an extraordinary challenge to reactivate and stimulate the different productive sectors to mitigate the effects of the economic downturn that COVID-19 has produced, plus the impact of Hurricanes Irma and María. This, in addition to the loss of income, the fall in real estate values and the decline in the construction and housing sector. Within this reality, the housing sector is going through particular challenges to maintain the sale of new construction units, which has a significant effect on the economy of Puerto Rico, ”the Governor highlighted in a written communication.
The measure establishes that there are segments of the housing market with a significant demand for owning a home, through buyers with the financial capacity and interest to acquire the unit. However, the general fiscal and economic conditions of Puerto Rico make it imperative that the appropriate circumstances be established to incentivize, encourage and enable those population sectors capable and willing to buy units to complete said transactions.
Through these transactions, it is possible to provide families with the stability of a dignified and safe roof, inject state and municipal collections through the purchase and sale agreement and financing of the unit, in addition to the multiple economic effects in the chain of products and services that are activated with the acquisition of a newly built home.
Therefore, this project extends the validity of the incentives provided by the Housing Promotion Program Transition Law, but this time incorporating them into the Puerto Rico Incentive Code, in order to maintain in force important mechanisms to stimulate , encourage and facilitate economic activity and the multiplier effects of the sale and financing of eligible properties under said law. This law was originally approved in 2011 by then-Governor Luis Fortuño and the reliefs expired today, December 31, 2020. With this signature, the first executive extends the benefits of this law until 2030.
These incentives allow an important sector of consumers and potential home buyers to be encouraged and incentivized to acquire new construction homes, in an economy with serious consumer confidence challenges and great challenges in the values of such properties. It is also an instrument to continue encouraging mortgage transactions that nurture the financial and mortgage sector, that stimulate the real estate industry and promote investment in the planning, design, development, construction and sale of the housing industry.
The minimal effect of these incentives, which has already been part of the fiscal panorama of the Government of Puerto Rico for the past nine years, is outweighed and offset by the multiplier effects on the economy and the treasury of all real estate transactions that are promoted. and they make viable with these incentives.
“The natural catastrophe, known as Hurricane María, destroyed the homes of thousands of Puerto Rican families who were displaced and do not have a decent home. Another impact on the real estate sector is the massive exodus by families to different states of the nation, who abandoned their homes and re-established themselves respectively. With this type of measure, the sale of disused properties is encouraged, but more than anything else a real alternative opens up to provide a safe roof to the hundreds of families who currently live in uncertainty due to the lack of a home ”, reads the measure .
It adds that, in the same way, in order to provide certainty and stability to the real estate market, the extension of the validity of such incentives for a broad term is decreed, allowing consumers to be encouraged to close such transactions, as part of a stable incentive program. and robust.
The temporary exemption on the real property tax will be for a term of five years from the execution of the deed of sale, and will apply to all eligible homes under the provisions of the law.