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Act 60 · Individuals
The Resident Individual Investor decree
The incentive most relocating buyers ask about. A decree from the Government of Puerto Rico that reduces Puerto Rico tax on dividends, interest, and capital gains earned after you become a bona fide resident. What it pays depends on when you file.
| Track | Filed by December 31, 2026 | Filed from January 1, 2027 |
|---|---|---|
| Dividends and interest | 0% | 4% |
| Capital gains after residency | 0% | 4% |
| Pre residency gains | 5% if recognized 10+ years after becoming a resident | 5% |
| Decree ends | December 31, 2035 (later extension treated as a new application from January 1, 2036) | December 31, 2055 |
| Prior residency test | Not a Puerto Rico resident between January 17, 2006 and January 17, 2012 | Not a Puerto Rico resident in the six years before relocating |
| Primary residence title | May be held through an eligible Puerto Rico entity | Held directly, jointly with a spouse, or through a qualifying trust |
A pending applicant can elect the 4% track through 2055 by filing a sworn amendment on the Incentives Portal, which waives the 0% rate. Source: DDEC Informative Bulletin 2026-004.
Who qualifies
- An individual who becomes a bona fide resident of Puerto Rico and meets the prior residency test for their filing track.
- No record of listed economic or financial felonies, or a pattern of criminal conduct, in any jurisdiction. DDEC treats these as grounds for denial.
- U.S. citizens keep their citizenship. Bona fide residency for federal purposes is a separate test under IRS rules.
Bona fide residency
Benefits apply only once you are a bona fide resident. For federal tax purposes that means meeting three tests in the same year: presence (generally at least 183 days in Puerto Rico), tax home (your main place of work is in Puerto Rico), and closer connection (your home, family, belongings, accounts, and driver's license point to Puerto Rico more than anywhere else). It is a genuine move, not a second home arrangement.
What you keep doing each year
- Own and live in your primary residence in Puerto Rico. See the home requirement.
- Make the annual donation, currently $10,000, with half going to government listed nonprofits working to end child poverty in Puerto Rico.
- File the annual report with DDEC's Office of Incentives, with its filing fee.
- Maintain residency under the presence, tax home, and closer connection tests.
Where the home fits
The residence is part of compliance, so its timing, its title, and its location all matter. A home you will live in at least half the year needs reliable power and water, a sensible distance to the airport and schools, and costs you understand before you sign. Our community comparison and closing cost calculator are built for that decision.
Questions
What tax rate applies to Act 60 investors who file in 2027?
Applications filed after December 31, 2026 pay 4% Puerto Rico tax on dividends, interest, and post residency capital gains, with decrees running through December 31, 2055.
I lived in Puerto Rico years ago. Can I still apply?
It depends on your filing date. Before January 1, 2027, you must not have been a resident between January 17, 2006 and January 17, 2012. After December 31, 2026, you must not have been a resident in the six years immediately before relocating.
How much is the Act 60 annual donation?
Currently $10,000 a year, half of it to government listed nonprofits working to eradicate child poverty in Puerto Rico.
Sources
- DDEC, Informative Bulletin 2026-004 (April 24, 2026)
- InCorp, Act 60 2026 changes (July 29, 2026)
- DLA Piper, Act 38-2026 (March 12, 2026)
- IRS, Section 937(a) bona fide residency
Facts checked October 26, 2026. General information, not tax or legal advice.
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