Act 60: what it offers, and what it asks in return
The headline figures are real. So is the condition attached to them, which is the part that decides whether any of it applies to you.
Any search for investment in Puerto Rico runs into Act 60 within about a minute, usually presented as a list of very round numbers. The numbers are real. What tends to go missing is the condition attached to them — and that condition is what decides whether the regime has anything to do with you.
What the regime grants
- 0% on capital gains generated after the move, under the resident investor provisions, up to January 2036.
- Full exemption on interest and dividends from Puerto Rico sources.
- A federal exclusion under IRC §933 for income sourced in Puerto Rico.
- A 4% corporate rate on qualifying export services.
The condition
These benefits are not attached to buying property in Puerto Rico. They are attached to becoming a bona fide resident of Puerto Rico and holding a valid decree. Both parts matter: the decree has to be granted, and the residency has to be real and sustained, not a postal address.
Two details of timing are worth noting. The 0% applies to appreciation generated after the move, not to gains already accrued before it. And the window is not open indefinitely: the current provisions require the decree and bona fide resident status to be in place before 31 December 2035.
What this means if you are investing from Europe
If you invest in Puerto Rico while continuing to live in Spain, France or anywhere else in Europe, the personal exemptions above do not apply to you. You are not a bona fide resident, so the regime that produces those figures is not the one you are taxed under.
That is not a reason to dismiss Puerto Rico. It is a reason to evaluate an operation there on its own merits — price, condition, execution and the local market — rather than on a tax headline written for somebody in a different situation. Your position depends on your own country of residence, on the structure through which you invest, and on the treaty between that country and the United States.
Act 60 is also not the only tax that touches a property. Municipal property tax through the CRIM applies regardless of who owns the house and where they live.
Before acting on any of this
This article is general information, not legal, tax or financial advice, and it is not an offer or an invitation to invest. Decree conditions, rates and deadlines are set by legislation that changes. Anyone considering a move or a structure should take specific advice for their own circumstances and their own country of residence before committing to anything.
