Selling a Puerto Rico house from the mainland

In Puerto Rico, a power of attorney is called a poder; the steps above show how to get one.

In Puerto Rico, notaries are lawyers. For your sale, the notary does four things:

• Protocolizes your power of attorney. A power of attorney signed outside Puerto Rico has to be protocolized before a Puerto Rico notary to be used there. Protocolizing means the notary adds your document to their official book of records, the protocolo, so it's valid in Puerto Rico.
• Reports it to ODIN, the Office of Notarial Inspection. The notary reports the power of attorney to the ODIN registry within 3 business days, not counting weekends or holidays.
• Runs the closing. Closing takes place before a notary, and payment is made at closing.
• Receives the transfer return. At the notary's office, the seller turns in an information return on the property transfer, the planilla de traslado.

This is the part with the most confusion, and different numbers circulate online. Here is what Hacienda, Puerto Rico's Treasury Department, says:

• Who withholds. If the seller doesn't live in Puerto Rico for tax purposes, the buyer withholds tax from the payments that make up the price. The notary doesn't do the withholding.
• How much. On the price: 15% if the seller is a US citizen who doesn't live in Puerto Rico; 25% if the seller isn't a US citizen; 29% for a foreign corporation.
• When it reaches Hacienda. The buyer deposits the amount withheld by the 15th of the following month.
• How it's reported. Payments to non-residents are reported on Form 480.6C.
• Getting money back. If the tax on your actual gain is lower, you can ask for a refund or a release (relevo). Your CPA works out your actual gain.
• US federal taxes. If you live in the States, the sale may also affect your US federal tax return. Ask your CPA about both returns, Puerto Rico's and the federal one.

A careful buyer doesn't skip this step. If the buyer doesn't withhold, Hacienda collects that amount from the buyer as if it were the buyer's own tax, unless the seller pays it. When you sell to us, the purchase is made by ETO Ventures or an affiliated or partner company, and the buyer is the one who withholds.

You're paid at closing, by manager's check or wire transfer. Before closing, decide which you want and confirm it in writing.

• By wire. The money can go to your bank account in the States. Give your account details in writing, and confirm them by phone, using a number you already know. Be suspicious of any email that asks to change payment details.
• By check. A manager's check is what many banks call a cashier's check. If the person with your power of attorney receives it for you, agree beforehand on how they'll get it to you.

What you receive is the price minus the withholding, the debts paid from the sale and any closing costs that are yours. Who pays each closing cost is spelled out in your written offer. The example in this guide shows the math with made-up numbers.

The estate comes first. Here is the order, with the Spanish names you'll see on the papers:

• Who the heirs are. To find out whether there's a will, ask Puerto Rico's Registry of Wills for a certificate: you request it with form OAT-1572, with stamps. A will says who inherits. If there's no will, you need a declaration of heirs (declaratoria de herederos): if no one disputes it, a notary can do it, just as a court can; any dispute stops the process before the notary.
• The estate tax return (planilla de caudal relicto). It's Form SC 2800 C for deaths since January 1, 2018, and it's due 12 months from the date of death. It's filed online only, through SURI, by the estate's administrator (a forced heir, the spouse or the executor), not by the notary. SURI is Hacienda's online system.
• The estate tax waiver (relevo de Hacienda). It cancels Hacienda's lien, and Hacienda requires it to record and sell the property. The regular waiver requires Hacienda and CRIM certificates that show no debts, so check early whether the house owes CRIM.
• Everyone has to agree. Selling the house takes the consent of all the heirs, including the surviving spouse, who also has to sign. Each heir on the mainland can sign without traveling, with a power of attorney.
• Heirs in two places. Ask your CPA how the withholding works when some heirs live in Puerto Rico and others don't.

Our step-by-step guide for heirs has the rest: Selling an inherited house in Puerto Rico.

We buy as-is: no repairs or cleaning before you sell. Leave behind what you don't want; we clear it out. Power and water don't need to be on. If the house is empty, tell us who can let us in to see it.

As-is means you don't have to fix or clean anything. It doesn't mean keeping quiet about what you know. If there's a problem that doesn't show, like a leak or termites, tell us up front, so the offer is made with everything on the table.