Act 60 Before December 31: The Real Estate Checklist for the 2026 Deadline

Puerto Rico did not eliminate its Individual Resident Investor incentive.

But December 31, 2026 marks an important dividing line.

Under Act 38-2026, individuals who submit their Act 60 Individual Resident Investor application on or before December 31, 2026 can generally remain under the current Puerto Rico tax framework: a 0% Puerto Rico income tax rate on qualifying interest, dividends and post-residency capital appreciation through December 31, 2035.

Applications filed beginning January 1, 2027 enter a different framework: generally a 4% preferential Puerto Rico income tax rate on the same categories of qualifying investment income, with benefits extended through December 31, 2055.

As of September 11, there are 111 days remaining until December 31.

For investors considering relocating to Puerto Rico, that makes the next several months important not only from a tax-planning perspective, but also from a real estate one.

The application may determine your tax framework.

The decree starts another clock: the one for establishing your principal residence in Puerto Rico.

What Changes on January 1, 2027?

Act 38-2026, signed into law in March 2026, extended Puerto Rico's Individual Resident Investor program while changing the tax treatment and certain eligibility requirements for future applicants.

Applications Filed on or Before December 31, 2026

For qualifying Individual Resident Investors who apply by the deadline:

0% Puerto Rico income tax generally continues to apply to qualifying interest and dividend income earned after becoming a Puerto Rico resident and before January 1, 2036.

Qualifying capital appreciation occurring after becoming a Puerto Rico resident can also remain fully exempt from Puerto Rico income tax when recognized within the applicable period.

The existing benefit period runs through December 31, 2035.

Existing decree holders are generally grandfathered under their current decrees unless revoked.

Applications Filed Beginning January 1, 2027

For qualifying applications filed from January 1, 2027 forward:

The preferential Puerto Rico income tax rate generally becomes 4% on qualifying interest, dividends and post-residency capital appreciation.

The program's benefit period extends through December 31, 2055.

New applicants must also demonstrate that they were not Puerto Rico residents during the six years preceding their move to Puerto Rico.

For pre-residency appreciation on certain securities and other assets, the law preserves a 5% Puerto Rico rate when the applicable gain is recognized after ten years of Puerto Rico residency and before the end of the relevant benefit period. Individual circumstances and federal sourcing rules can materially affect the ultimate tax treatment.

So this is not the end of Act 60.

It is the end of the current 0% application window for new Individual Resident Investor applications.

The Real Estate Side of Act 60

This is where tax planning becomes a real estate decision.

An Individual Resident Investor must acquire qualifying real property in Puerto Rico by purchase within two years after obtaining the decree, and the property must serve as the investor's principal residence. The purchase must be from an unrelated seller.

Notice the distinction:

The December 31, 2026 deadline relates to the decree application.

The two-year real estate period begins after the decree is obtained.

That means an investor does not necessarily need to rush into buying a house before December 31 simply to preserve the pre-2027 application framework.

The better sequence is often:

Understand the tax strategy. File appropriately. Then purchase the right Puerto Rico residence within the required period.

Your attorney and CPA should determine the appropriate sequence for your individual circumstances.

1. File the Decree Application Before Buying Solely for the Deadline

If your objective is to qualify under the pre-2027 framework, the critical statutory date is the application date, not the date you close on a property.

Act 38-2026 specifically distinguishes applications submitted on or before December 31, 2026 from those submitted beginning January 1, 2027.

That distinction matters.

A buyer should not choose the wrong property simply because December is approaching.

2. Buy Your Principal Residence Within Two Years of the Decree

Act 60 requires the investor to purchase real property in Puerto Rico within two years after obtaining the decree and use it as a principal residence.

Two years may sound like plenty of time.

In practice, buyers relocating to markets such as Dorado, Condado and Guaynabo often have a much narrower set of properties that actually fit their lifestyle, security, space, school, community and commuting requirements.

That is why we prefer to define the area and buying criteria early—even when the actual purchase will happen later.

3. Pay Attention to How Title Is Held

Act 38-2026 added an important title requirement for Individual Resident Investors applying beginning January 1, 2027.

For that group, the principal residence must be registered—or pending registration—in the Puerto Rico Property Registry in the name of the investor, jointly with the investor's spouse, or through a qualifying trust described under Act 60.

The new provision does not include ownership through an LLC or other legal entity as a qualifying structure for this requirement.

For investors applying before January 1, 2027, ownership structure should still be reviewed with Act 60 counsel before closing.

Do not assume the way you normally hold investment real estate is necessarily the way you should hold your Puerto Rico principal residence.

4. Buy From an Unrelated Seller

The property satisfying the Act 60 principal-residence requirement must be acquired by purchase from a person or company that is unrelated to the decree holder.

This is one of the reasons your Act 60 attorney should review the transaction structure before closing—not after.

5. Complete the Puerto Rico Property Registry Process

For applications filed beginning January 1, 2027, Act 38 expressly requires evidence that title to the principal residence is either registered or pending registration with the Puerto Rico Property Registry in the permitted name or structure.

Puerto Rico's title and registration system is different from many U.S. jurisdictions, so this should be part of the transaction planning from the beginning.

Choose the Area Before You Choose the Property

This may be the most important real estate advice we give relocating clients.

You can renovate a house. You cannot renovate its location.

A beautiful property does not solve the wrong commute.

A larger house does not solve the wrong community.

An ocean view does not necessarily compensate for being far from the places your family uses every day.

Before touring individual properties, understand how you would actually live in Puerto Rico.

For one family, that may mean Dorado and its resort-oriented communities.

For another, it may be Condado and a walkable urban lifestyle.

For another, Guaynabo may provide the combination of residential communities and proximity to San Juan they need.

The property search should come after that decision.

What Act 60 Requires Beyond Real Estate

Buying the residence is only one part of maintaining an Individual Resident Investor decree.

These requirements should be reviewed directly with your Act 60 attorney and CPA.

Maintain Bona Fide Puerto Rico Residency

Federal bona fide residency involves three central concepts: the presence test, tax home test and closer-connection test.

The widely known benchmark is 183 days in Puerto Rico, although federal rules provide additional ways the presence test may be satisfied depending on the circumstances.

Residency is more than counting days.

Where you live, work, maintain personal connections and conduct your life can all matter.

Make the Required Annual Charitable Contribution

Beginning with the second taxable year after receiving the decree, an Individual Resident Investor generally must provide evidence of at least $10,000 in annual charitable contributions to qualifying Puerto Rico nonprofit organizations.

Under current law, $5,000 of that amount must be directed to qualifying organizations providing services aimed at eradicating child poverty in Puerto Rico.

File the Annual Compliance Report

Individual Resident Investors are subject to an annual compliance-report requirement and a $5,000 annual filing fee.

Put these recurring obligations on your compliance calendar as soon as your decree is issued.

Keep Your Records

Residency and decree compliance should be documented, not reconstructed years later.

Maintain records of travel and days in Puerto Rico, closing and title documents, charitable contributions, tax filings and other documentation your legal and tax advisors recommend.

Working Backward From December 31

If you are seriously considering Act 60 in 2026, waiting until the final weeks of December adds unnecessary pressure.

September: Build Your Team

Select your Act 60 attorney and CPA.

At the same time, begin discussing where you would actually want to live in Puerto Rico.

You do not necessarily need to choose the house yet.

Choose the market.

Dorado? Condado? Guaynabo? Another part of Puerto Rico?

If financing will be involved, begin that process. Cash buyers should organize proof of funds.

October: Prepare

Work with your legal and tax professionals to prepare the application, required documentation, background information and applicable filings.

If you have not spent meaningful time in Puerto Rico, visit.

But do not tour 25 random houses.

Experience the two or three communities that could realistically support your everyday life.

November: Aim to File

If preserving the pre-2027 framework is part of your tax strategy, do not intentionally plan around the final hours of December 31.

The law distinguishes applications filed on or before December 31, 2026 from those filed beginning January 1, 2027.

Your attorney should confirm filing procedures and timing.

December 31, 2026: The Dividing Line

This is the statutory cutoff between the existing Individual Resident Investor tax framework and the new framework created by Act 38-2026.

It is not the deadline to purchase your Puerto Rico home.

It is the deadline relevant to which application cohort you enter.

Years One and Two: Establish Your Life in Puerto Rico

Once your decree is obtained, the real estate clock matters.

Establish bona fide residency as advised by your legal and tax professionals, refine your property requirements, search with intention and complete the purchase of your qualifying principal residence within the applicable two-year period.

Where InvEstate Puerto Rico Comes In

Act 60 is a tax incentive.

We are real estate brokers, not tax advisors.

Our role begins where the tax strategy meets the Puerto Rico property market.

We help relocating clients determine where to live before deciding what to buy, understand actual closed-sale comparables, identify on-market and appropriate opportunities, evaluate properties through the lens of long-term residency, negotiate the acquisition and coordinate the real estate transaction alongside the client's attorney, CPA, lender and other advisors.

The objective is not simply to buy a house within two years.

It is to buy the right Puerto Rico residence within the requirements of your relocation strategy.

If you are considering an Act 60 relocation before the 2026 deadline, start the tax conversation with your attorney or CPA—and start the real estate conversation with us.

Send us “ACT 60” by DM or contact InvEstate Puerto Rico directly.

787-717-6443
InvEstate Puerto Rico
Lic. C-13471

This article provides general information regarding Puerto Rico Act 60 and Act 38-2026 as of September 2026 and is intended for real estate and educational purposes only. It does not constitute legal, federal or Puerto Rico tax advice. Tax treatment depends on individual circumstances, residency, income sourcing and other factors. Consult a qualified Puerto Rico tax attorney or CPA before making tax, residency, ownership or investment decisions.