Back in 2012, Puerto Rico enacted a law (Act 22) to attract wealthy mainland individuals to invest in its communities. In exchange, Puerto Rico and a U.S. tax code provision provide certain tax benefits to Americans who buy homes there. However, the law has driven up local housing prices and reduced tax income. In response, some U.S. House Democrats have introduced the United with Puerto Ricans Opposed to Act 22 Risks Act. The lawmakers claim the tax breaks have spurred purchases of not only luxury properties but also “affordable” housing. Foreign buyers often pay higher-than-appraised prices in cash. Some U.S. buyers have also allegedly evaded U.S. tax by claiming Puerto Rican income.
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