John Paulson of Paulson & Co acquired majority stake in St. Regis Bahia Beach Resort, Puerto Rico and the Bahia Beach Resort & Golf Club.
The hedge fund’s announcement today comes amidst rumors earlier this year that John Paulson would be moving to Puerto Rico.
Rumors of John Paulson relocating to Puerto Rico
Earlier this year, in a statement released by the hedge fund, it was reported that John Paulson, president of Paulson & Co, is not moving to Puerto Rico. The statement came amidst reports that the hedge fund manager was considering to set up a permanent residence in the island territory of the United States. The hedge fund stated that while Paulson considered real estate investment and has vacationed on the island, he has no plans to move to Puerto Rico or to establish a permanent residence there.
Investment on behalf of recovery funds
In today’s announcement, the New York-based investment firm announced that on behalf of Recovery Funds, it has acquired a majority interest in the resorts.
Since 2007, when the first homes were built by BBP Partners, over $125 million worth of residences have been sold at the resort and the $150 million St. Regis Bahia Beach Resort opened in 2010. BBP is a joint venture between two of Puerto Rico’s leading real estate developers, Interlink Group and Munoz Holdings.
Through a comprehensive recapitalization, Paulson is acquiring a majority interest in BBP.
Welcoming the investment from Paulson, Federico J. Sanchez-Ortiz, president and ceo of Interlink Group indicated their willingness to work with Paulson to continue the successful development of Bahia Beach. He further indicated plans to develop another $550 million of residences and resort amenities over the next decade. He expressed confidence that future would bode well for Bahia Beach and its property owners and club members.
New tax laws in Puerto Rico
Puerto Rico implemented its new tax laws to encourage individuals to generate a majority of their income from investments. Under the new tax regulation, any capital gains accumulated will be tax-free if a person moves in Puerto Rico. Dividend and interest income paid by companies in the United States are still subject to U.S. federal taxes, but would not be taxed locally.