Act 60 Changes in 2026: What Real Estate Buyers Need to Know Before December 31
Puerto Rico’s Act 60 tax incentive program is entering a new phase in 2026, and anyone considering relocating to the island for its tax benefits should understand what’s changing — and what isn’t. For real estate buyers weighing a decree-driven purchase, timing now matters more than ever.
What’s Changing for New Applicants
Individuals who apply for an Act 60 decree after December 31, 2026 will face a new 4% tax on interest, dividends, and qualifying capital gains, replacing the 0% rate that has defined the program since its inception. This is the most significant structural change to the individual investor track since Act 60 consolidated Puerto Rico’s earlier tax incentive laws.
Current Decree Holders Are Unaffected
If you already hold an Act 60 decree, this change does not apply to you. Existing decree holders retain their current terms, including the 0% rate on qualifying investment income, for the duration of their existing agreement. The new 4% rate applies only to applications submitted after the December 31, 2026 deadline.
A New Residency Requirement
Future applicants will also need to satisfy a stricter residency test: prospective decree holders must not have been Puerto Rico residents at any point during the six years prior to relocating. This is designed to ensure the incentive continues to attract genuinely new residents to the island rather than rewarding short-term moves.
The Program’s Timeline Just Got Longer
Act 60 was previously scheduled to sunset in 2035. Under the recent changes, that timeline has been extended to 2055, giving the program three additional decades of runway. For real estate buyers and investors evaluating long-term relocation decisions, this signals continued policy support for the incentive structure, even as the terms for new entrants become less favorable than they were.
The Real Estate Purchase Requirement Hasn’t Changed
One element of the program remains constant: decree holders are still required to purchase a primary residence in Puerto Rico within two years of their decree’s approval. This requirement continues to make real estate a central piece of Act 60 planning, whether a buyer is finalizing a purchase under current 0% terms or planning around the new 4% structure taking effect in 2027.
What This Means If You’re Considering a Move
For prospective decree holders, the practical takeaway is timing: applying before December 31, 2026 preserves access to the current 0% rate on qualifying investment income. For those who will apply after that date, the 4% rate — still meaningfully below mainland U.S. tax rates on the same income — combined with the extended 2055 sunset suggests the program remains a long-term fixture of Puerto Rico’s economic development strategy, not a short-term opportunity that’s closing.
Disclaimer: This article is for general informational purposes only and does not constitute legal or tax advice. Act 60 eligibility, residency requirements, and tax treatment are fact-specific and subject to change. Anyone considering an Act 60 decree should consult a licensed Puerto Rico attorney and CPA before making relocation or investment decisions.
Two20 Group works closely with Act 60 decree holders and prospective residents to identify qualifying primary residences across San Juan, Guaynabo, and Condado. If you’re evaluating a move to Puerto Rico and need guidance on the real estate side of the process, contact us to discuss your timeline and options.