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  • Writer's pictureAlex Ortiz

Real Estate Closing Costs in PR: How much, and who pays what?

The closing of a real estate transaction in Puerto Rico is an exciting moment, but it's essential to be prepared for the associated closing costs. These costs cover various fees and expenses necessary to finalize the sale. In this blog post, we'll cover the required real estate LEGAL closing costs in Puerto Rico, which are Notary fees, Stamp fees, and Recording fees. Keep in mind Realtor fees and broker fees are additional.

**1. Notary Fees:**

How Much?

As we’ve said in previous entries, a Notary is an irreplaceable party for a closing to take place. In PR, only licensed attorney can be notaries (read more here). Their neutral role is crucial in ensuring that the transaction adheres to legal requirements. Notary fees are established by law, and range from 0.5% to 1% of the transaction price. The Notary will draft the necessary deed and execute it at closing, gathering initials and signatures from every party, and adding his/her own signature, sign, seal, and flourish.

In addition to the fees for preparation and execution of the deed, the Notary will usually charge additional fees for separate services, such as the preparation of the option contract or purchase and sale agreement, commission of the title study, execution of the certified copy of the deed, recording the deed at the Property Registry (Registro de la Propiedad), filing for name change at the Property Tax Agency (CRIM), filing for a main residence exemption at the CRIM, filing the title transfer return at the Treasury Department (Hacienda).

Who pays?

Generally speaking, the Seller will bear the Notary fees for the original deed, BUT this is a bargaining chip for both parties to negotiate. The Buyer will bear the Notary fees for the additional services.

**2. Stamp Fees:**

How much?

Stamp fees (sellos) are a tax levied by Hacienda. They are payable upon the execution of any public instrument executed by a Notary, who is bound by law to adhere and cancel the necessary stamps on each instrument he/she executes. The stamp fee rate varies depending on the transaction amount. There are 3 main stamps used for deeds:

1. Internal Revenue stamp (Rentas Internas): This stamp is calculated using the “base price + $1.00”. A $250,000 transaction will pay $251.00 in Internal Revenue stamps. The certified copy pays half, or $125.50.

2. Notary Tax (Impuesto Notarial): This is a $1.00 stamp, for both the original and the certified copy.

3. Legal Assistance Stamp (Asistencia Legal): Between $25,000.00-$50,000.00 pays $5.00. Then, it’s an additional $5.00 for every $50,000.00 (or fraction). So, our $250,000.00 transaction pays $25.00, and the certified copy pays half, or $12.50.

Who pays?

The Seller will bear the stamp fees for the original purchase deed. The Buyer will bear the stamp fees for the certified copy.

Note: Seller will also bear the stamp fees for any lien or mortgage cancellation deed needed to deliver a clear title.

**3. Recording Fees:**

How much?

Recording fees (comprobantes) are charges associated with officially recording the deed at the Registro de la Propiedad. Recording the deed ensures that the transfer of property ownership is officially documented and publicly recorded. It establishes a clear chain of ownership, which is crucial for future transactions and title searches. There are 4 recording fees:

1. Online Recording fee (telemática): This is a $10.00 fee.

2. Presentment fee (presentación): This is a $15.00 fee.

3. Political Code fee (código politico): This is a $0.50 fee

4. Recording fee (inscripción): This fee is based off the transaction price. It’s $50.00 for the first $25,000.00, and then $4.00 for every additional $1,000.00 or fraction. Our $250,000.00 transaction pays $950.00 for the recording fee.

Who pays?

The Buyer will bear the totality of the recording fees for the purchase deed.

Note: Seller will bear the recording fees for any lien or mortgage cancellation deed needed to deliver clear title.

In summary, real estate closing costs in Puerto Rico encompass various expenses, including attorney fees, stamp fees, and recording fees. These costs ensure a legally sound and transparent transaction Understanding these closing costs is essential for both buyers and sellers in Puerto Rico. Being aware of these expenses allows for better financial planning and ensures a transparent transaction process. It's important to work closely with a real estate attorney who can provide anticipated closing costs specific to your transaction. At The Notary Lab, we’ll provide a detailed breakdown of legal closing costs to make life easier for you.

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