Pain & Profit: The Investors Double Dipping On Tax Exemptions And Starving Puerto Rico

Since the “Act to Promote the Relocation of Individual Investors to Puerto Rico” (known as Act 22 and later amended into Act 60) was passed in 2012, billionaires, Wall Street executives, and wealthy luxury developers have descended on Puerto Rico. These wealthy individuals receive an unprecedented 100% tax exemption on all income and investments under Act 22. Since the act was passed, Act 22 beneficiaries have hoarded properties and speculated in the real estate market.

Communities are facing soaring housing costs and rapid displacement, as long-term residents are forced to make way for investors, luxury real estate developments, and short-term vacation rentals. As this Puerto Rico No Se Vende investigation reveals, Act 22 tax breaks are only the tip of the iceberg. For years, wealthy investors, large corporations, and luxury developers have quietly secured additional tax breaks from the Puerto Rican government. On paper, the tax breaks—under Act 74, Act 60, Act 273, and so-called Opportunity Zones—are designed to promote various industries such as tourism and business development, and the energy sector. In reality, the same group of Act 22 beneficiaries is securing multiple tax breaks at the same time. This double-dipping enables many of them to effectively avoid most taxes on their personal income, business profits, property taxes, municipal taxes and more.