Asked in Real Estate Law and Tax Law for Puerto Rico

Q: My mother inherited land in Puerto Rico in 1991. She is currently a resident of NY and in assisted living .

As my mothers sole heir, if she passes, will I be subject to inheritance taxes on the land? I have read that inheritance tax on land can range from 18%- 50% of the value.

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1 Lawyer Answer
Rafael  Pagan-Colon
Rafael Pagan-Colon
  • San Juan, PR
  • Licensed in Puerto Rico

A: At this time, the Commonwealth of Puerto Rico does not impose inheritance per se. Nevertheless, property taxes are another matter entirely. Assuming that she lived the real estate property in Puerto Rico until her death, and assuming that no descendant has lived the real estate property since, property taxes will be computed by the Center for Municipal Income Collection (CRIM, bi its Spanish acronym) since the date of her passing; and these property taxes accrue interests and late surcharges.

You have not stated whether your late mother left her Will nor whether a Declaration of Heirs was petitioned before the Puerto Rico courts. Either is required in order to file your hereditary rights with the Puerto Rico Property Registry. As part of that process, an estate tax filing must be submitted to the Puerto Rico Treasury Department (Hacienda) to procure a tax waiver; and in order to do that, a zero-debt certification must be procured from CRIM.

Where you will be taxed is if and when you decide to sell the real estate property. As a non-resident pursuant to the Puerto Rico Tax Code, a 15% retention of the sales proceeds will be kept by the notary authorizing the sales deed, to remit to Hacienda in order to force you to file income taxes for that year.

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