Cost of Living in Puerto Rico

Puerto Rico is a small island paradise in the Caribbean. Luckily for United States citizens, this beautiful place is a United States territory. Americans can visit easily without the hassle of passports. 

However, what if you fall in love with Puerto Rico so much that you consider moving there? There are many things to take into consideration before moving to Puerto Rico. We will discuss all of them in this article. 

We’ll take a look at the cost of transportation, groceries, and childcare to help you determine your potential budget. Healthcare costs differ in Puerto Rico, and we’ve gathered information on those distinctions here. 

After drafting a sample budget for a family of three, we researched the cost of a home in Puerto Rico. There are some differing tax laws in Puerto Rico for prospective residents to be aware of as well. Let’s get started!

Cost of Living in Puerto Rico in USD

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Internet and Utility Expenses

Although some mainlander Americans have reported higher utility costs in Puerto Rico than they experienced in the mainland, it is widely agreed upon that utility costs in Puerto Rico are, on average, less expensive than American costs. 

On average, monthly utility expenses for one to two people living in a two-bedroom apartment come out to about two hundred to three hundred US dollars. Puerto Rico has many available providers in terms of internet, and costs for high speeds typically do not exceed more than fifty US dollars per month.

Cost of Transportation 

There are a few different transportation methods available on the island of Puerto Rico. These options include car rentals, public transportation, taxis, and some drive share applications, such as Uber. Considering these options, getting around a bigger metropolis like San Juan is easy to do. 

Ubers usually respond within ten minutes and can cost around $20 to drive around San Juan. San Juan is also home to the Tren Urbano (Urban Train), with sixteen stops along its ten-mile pathway. The Tren Urbano costs about USD 1.50 for a ride.

However, if you are looking to purchase a car instead of using public transportation or other means to get around, it is helpful to know that the average cost of buying a car in Puerto Rico is $2000 – $5000 higher than prices in the US. 

Due to this fact, many residents choose to utilize the popular Puerto Rican classifieds site Clasificados to purchase used vehicles from private owners. Another budget friendlier option is to purchase a car from a dealer somewhere closer to the island, such as Miami, and have it shipped to Puerto Rico from there, including the shipping costs in the overall sale deal of the car.

Groceries / Cost of Food 

When shopping for essential grocery items in Puerto Rico, you may notice a price increase when compared with other places on the mainland. This is because, according to one study, grocery prices are 25.4% higher than stateside locations. 

Mainlander Americans say that staples like rice and beans are still cheap, but the average gallon of milk can cost almost $7. Rice, eggs, and cheese are all below $5, and beef and chicken by the pound costs $5 and $4, respectively. 

By the pound, fruit stays below $5. Vegetables are about the same price, although mainlander Americans who are living in Puerto Rico say the costs of these can increase in urban areas – for this reason, many Puerto Ricans tend to shop for their produce outside of the city.

How much is a Coke in Puerto Rico?

Keeping in line with Stateside trends, a bottle of Coke in Puerto Rico is $1.22 – and one of these may just hit the spot in Puerto Rico’s tropical climate.

Dining Out 

Mashed plantain banana and stomach meat with Puerto Rico flag on plate

Puerto Rico is peppered with tasty and unique eateries. On average, one meal for two people should not cost more than $31. Prices for breakfast food are often cheaper than lunch and dinner. 

Street food will cost $5 – $10 for high-quality eats, but it is recommended to stay away from the cruise ships, where prices tend to be upwards of $40 per person. A 15 – 20% tip is normal when dining in Puerto Rico. 

A steak dinner in San Juan at a four or five-star restaurant will top out at $50 – $70. A burger from a locally enjoyed burger joint will come in at under ten US dollars.

Clothing Cost

Puerto Rico is a United States Territory, meaning that the currency used there are US dollars. Often, prices for commercialized items are similar in cost to their counterparts in the mainland. 

Therefore, you can expect shopping in Puerto Rico to cost about as much as you would pay in the United States. San Juan is explicitly packed with retail outfitters, both high-end and more budget-friendly places like Marshall’s. Expect to spend the same amount of money shopping for clothes in Puerto Rico as you would for a shopping trip on the mainland. 

Childcare Cost

There are many considerations to make when looking to move to Puerto Rico, and for families, one of those considerations is the cost of childcare. Fortunately, prices for childcare in Puerto Rico are relatively low compared with prices in the mainland. 

On average, the monthly cost for one child to attend a private, full-day preschool is around $350. There are many highly-rated early childhood education options in and around San Juan.

Rent in Puerto Rico 

Great news for prospective residents – rent in Puerto Rico is, on average, much cheaper than in the mainland. The average monthly cost for a studio space is $384. One bedrooms in the city center of San Juan are about $500 – $600 per month

Rent drops by about one hundred dollars when you move outside of the metropolis. Two bedrooms that are not located directly in the city are about $500, and a three-bedroom would cost $640 per month. 

Entertainment Cost 

Entertainment costs in Puerto Rico can be pricey, but enjoying low-cost activities such as hiking or spending a day at the beach will save you money. However, we recommend you allot about $37 per day when building your entertainment budget. This amount should cover admission to museums, attractions, and day tours. 

Healthcare Cost

Due to the American infrastructure in Puerto Rico, healthcare there is very well developed. There are over ninety hospitals on the island, and many of the most promising health care options exist in and around the city of San Juan. 

Since Puerto Rico is a part of the US, Medicare cards work there seamlessly. Additionally, purchasing private health insurance for your time on the island is cost-effective – many premiums are less expensive than prices set in the mainland.

Sample Budget 

A man and woman are sitting at a desk looking at a piece of paper and a calculator. They appear to be concentrating

Now that we’ve taken a thorough look at various expenses you may encounter living in Puerto Rico, let’s break down what a monthly budget might look like. Use these figures as a guide to help you expect your expenses if you choose to move to Puerto Rico. This budget is for a single-family with one child.

  • Rent: $500 USD
  • Internet and Utilities: $250
  • Entertainment: $148 (assuming you and your significant other go out four times a month)
  • Groceries: $200 – 250 (depending on how much food you and yours consume)
  • Transportation: If you have a car, you’d worry about gas and insurance, which is comparable to mainland rates. If you’re using public transportation, these costs would come out to be about $60 per month, assuming you live near San Juan and are commuting to work regularly.
  • Childcare: $350
  • Budget Total: $1508 – $1558 per month

Real Estate Prices In Puerto Rico

How much does a house cost in Puerto Rico?

Lucky for prospective movers, prices for homes on the beautiful island of Puerto Rico are pretty cost-effective. Living in Culebra, which is a thirty-minute flight from San Juan, can be possible for prices starting at $150k.

Culebra has been called an ideal location, and a three-bedroom bungalow with ocean views can go for $160k. A two-bedroom with private balconies and panoramic views starts at $400k, and larger homes with private decks, and four-plus bedrooms can be upwards of $1 million.

Taxes

Income Tax

Puerto Rico is an unincorporated territory of the United States, and as such, it is considered an insular area. Due to the nature of the island’s relationship with the United States, all Puerto Rican residents pay federal taxes. However, many residents are not required to pay income taxes. 

The only residents in Puerto Rico who need to pay federal income tax are: 

  • federal government employees, 
  • members of the military, 
  • people with income sources that do not originate on the island, 
  • individuals and companies who do business with the federal government, and 
  • Puerto Rican corporations that intend to transfer funds to the United States.

VAT Tax

Puerto Rico has a Sales and Use Tax of 11.5% – although legislators tried to pass VAT taxation in 2015, the effort was eventually struck down. A portion of these taxes (10.5%) goes to the Commonwealth of Puerto Rico, and 1% goes to municipalities. 

Real Estate and Service Tax

Real estate taxes in Puerto Rico – taxes like the property tax – are on average similar to the rates you’d find in the mainland. These taxes, in Puerto Rico, range from 8.03% to 11.83% per year for personal property.

Goods and Service Tax

Puerto Rico does not have a good and service tax. Instead, these taxes are nestled under the aforementioned Sales and Use Tax of 11.5%. A portion of these taxes (10.5%) goes to the Commonwealth of Puerto Rico, and 1% goes to municipalities. 

Retirement Tax

There are many tax benefits for residents living in Puerto Rico. Income sourced in Puerto Rico is excluded from additional United Stated federal tax. Other friendly tax regulations make Puerto Rico a great place to retire. This includes Puerto Rico’s Act 22. Under this act, some Puerto Rican residents are exempted from all taxes on capital gains, interest, and dividends. People who reside in Puerto Rico more than 183 days out of the year qualify. 

Pension, 401k, and IRA incomes receive a tax of 4%. No federal tax at all.

Inheritance laws in Puerto Rico

One might think that because Puerto Rico is considered a part of the United States, inheritance laws would be fairly similar. That may be the case, but there are certain distinctions to keep in mind regarding Puerto Rican inheritance laws.

Forced Heirs

Forced heirs refer to the fact that children, grandchildren, or direct descendants are 100% guaranteed a portion of the inheritance in certain areas.

Puerto Rico Laws Operate By Thirds

In Puerto Rico, one-third of the inheritance is split between the forced heirs. Another third is distributed according to the person’s wishes leaving the inheritance. The final third gets distributed to whomever the person leaving the inheritance deems fit. This process is distinctly different from the ordinary laws found in the mainland.

Puerto Rican Law governs any Left Real Estate

Whether the owner was Puerto Rican or a foreigner, real estate is subject to Puerto Rico real estate law. Puerto Rican courts always govern the inheritance of real estate.

The Average Income In Puerto Rico

A man in a blue suit is sitting at a desk. In front of him are 6 stacks of coins. On each column of coins is a wooden block with a letter on it. Together, they spell SALARY

Perhaps as a reflection of the low housing and other costs in Puerto Rico, the median household income as reported by the United States census in 2019 was $20 539.

Immigration Costs

Because Puerto Rico is a United States territory, there are no immigration costs similar to those you’d face if you were moving to a different country. However, certain travel-associated charges can add up when you consider the move to Puerto Rico. Here is a couple of them.

  • For a one-way ticket, flight costs can be $400 – $800 total in cost.
  • Moving Expenses. Depending on the declared value of your goods, and the method by which you choose to ship them, costs can be $1000 + to get your stuff to Puerto Rico.

According to some estimates, the average cost of moving to Puerto Rico from the mainland is about $12,500.

Can I use USD in Puerto Rico?

The United States dollar is the currency used in Puerto Rico. 

How much cash can I bring into Puerto Rico?

There is no limit to how much cash you can bring into Puerto Rico. However, if you travel with more than $10k, you must declare it to United States Customs and Border Protection. It’s helpful to realize that this means any form of cash that equates to $10k. 

Foreign currency counts. Additionally, the following examples of monetary value can also combine to make up that $10k limit. These include coins, banknotes, gold coins, traveler’s checks, money orders, personal checks, cashiers checks, business checks, and securities or stocks in bearer form. 

If you do not declare your sum of money that is greater than $10k, your failure to do so can result in a seizure of the funds.

How much to live comfortably in Puerto Rico?

Considering the various factors, we’ve outlined for a budget in Puerto Rico – things like childcare, rent, entertainment, and utilities – it’s clear that a budget of about $1600 would fit most people’s needs. However, if you want to live a bit more comfortably, aiming for $2000 – $2500 per month in terms of income might be a more pleasant range.

How much do you need to retire in Puerto Rico?

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The cost of retiring in Puerto Rico is the same as comfortably on the island. About $2000 – $2500 per month.

Wrap Up

Puerto Rico is certainly a bright, sunny, warm, and inimitable place to live. To build a budget for a three-person family with a young child, you only need about $1500. This includes all utilities, internet, entertainment, childcare, groceries, and rent. 

Homes in Puerto Rico cost less than their mainlander counterparts, and retiring in Puerto Rico provides certain tax benefits – as long as you are a resident on the island for 183 days out of the year. 

There are a few things to remember about inheritance law in Puerto Rico, and keeping those things in mind will assist you as you work out your inheritance on the island. Because Puerto Rico is a United States territory, it uses USD as a currency, and there are no immigration costs. Puerto Rico may just be the right choice for you!

Related: 17 Pros and Cons of Living in Puerto Rico

Related: 7 Best Places to Live in Puerto Rico and 3 Places to Avoid