# Real Estate Exchange Fairness Act of 2021

This bill changes the tax rules for people who swap real estate properties. Currently, when you sell one piece of real estate and buy another similar property, the federal government allows you to defer paying taxes on the profit from the sale—but only if both properties are located within the mainland United States. This bill extends that same tax benefit to include Puerto Rico, treating it the same way as any other U.S. state for these property swap purposes.

Here's what this means in practical terms: If you own a building in Florida and want to trade it for a similar building in Puerto Rico, the government would now allow you to do this tax-free exchange just as if you were swapping two properties in Florida. Without this change, swapping mainland property for Puerto Rico property would trigger immediate taxes on any profit you made. This matters because real estate investors often use these tax-deferred exchanges to grow their investment portfolios without being forced to pay taxes that would eat into their capital. By including Puerto Rico, the bill opens up more investment opportunities on the island and potentially encourages people to invest in Puerto Rico real estate.

The change applies to any property exchanges completed after this bill becomes law. While this primarily affects real estate investors and developers who actively buy and sell properties, it could have broader economic effects by making Puerto Rico a more attractive destination for real estate investment. For most everyday homeowners who simply buy a house to live in and don't regularly swap properties, this bill won't directly impact them.

Real Estate Exchange Fairness Act of 2021

González-Colón, Jenniffer

Real Estate Exchange Fairness Act of 2021 This bill requires Puerto Rico to be treated as part of the United States for the purpose of determining if an exchange of real property qualifies as a like-kind exchange for tax purposes. (Under current law, real property located in the United States and real property located outside of the United States are not property of a like kind.)