Every Act 60 investor decree comes with a home requirement. Within two years of obtaining the decree, you must buy a home in Puerto Rico from an unrelated seller, make it your principal residence, and certify every year in your annual report that you still own it and live there. Buying a home doesn't qualify you for a decree or make you a resident; it's an obligation the decree creates. And if you file in 2027 or later, the rules on how the home may be titled are stricter.
Almost every article about Act 60 says "buying a home doesn't qualify you." That's true, and it's where most of them stop. This post picks up from there: what the requirement actually says, who can hold title, and the mistakes that can put a decree at risk. It's the part of Act 60 closest to my work.
What the law requires
The requirement sits in Section 6020.10(c) of the Incentives Code, as amended by Act 38-2026, and DDEC explained how it applies in a January 2026 circular.
Element | What it requires |
|---|---|
Deadline | Within two years after obtaining the decree |
How you acquire it | By purchase. An inherited or gifted home doesn't satisfy the rule |
From whom | A seller, person or company, wholly unrelated to you |
How it's used | As your principal residence in Puerto Rico |
For how long | For the entire term of the decree |
How you prove it | Each year in your annual report to DDEC, with a certification of ownership and principal-residence use, which can take the form of a letter signed under penalty of perjury. DDEC accepts the municipal principal-residence exemption certificate as supporting proof |
There is no minimum price; the statute sets none. The test is how the home is bought and used, not what it costs.
Who counts as "related"
The law requires a seller wholly unrelated to you but doesn't define the term, so DDEC's circular borrows the definition from Puerto Rico's Internal Revenue Code. Related persons are your siblings (including half-siblings), your spouse, and your relatives in the direct line: parents, grandparents, children and grandchildren.
The circular notes that this definition says nothing about in-laws. If you're thinking of buying from a relative by marriage, or from a company connected to a relative, get your attorney's view before you sign anything.
Who can hold title depends on when you filed
Title held by | Filed by December 31, 2026 | Filed on or after January 1, 2027 |
|---|---|---|
You alone | Yes | Yes |
You and your spouse | Yes | Yes |
You and a partner in a relationship analogous to marriage | Yes, with a decree amendment request | Not listed in the statute's 2027 rule |
A Puerto Rico entity owned only by you (or with your spouse or partner) | Yes, with a decree amendment request | No |
A qualifying grantor trust | Confirm with counsel; not addressed in the circular | Yes |
Sources: Act 38-2026, Article 5; DDEC Circular Letter 2026-001, Part II; DDEC Informative Bulletin 2026-004, Part III.
Two details carry weight. For 2027 filers, title must be recorded, or pending recording, in the Puerto Rico Property Registry in the permitted name. And if you hold the home through an entity and later transfer the entity's shares, DDEC expects evidence that you bought another qualifying residence, reported for that same year.
One more connection to earlier posts: a 2026 filer who requests the 2055 extension before buying and reporting the home becomes subject to the stricter 2027 title rules (Post 3).
Mistakes that can put a decree at risk
These follow directly from the rules above:
- Buying from family or your own company. A related seller fails the test, however fair the price.
- Counting a gift or an inheritance. The rule requires a purchase.
- Titling in an LLC as a 2027 filer. The entity route closes for applications filed from January 1, 2027.
- Buying a home you don't live in. A vacation property you visit doesn't meet the principal-residence requirement, and it weakens your residency under the IRS's closer-connection test (Post 4).
- Selling without a replacement. The requirement runs for the whole decree. Line up the next qualifying home before you let go of the current one, and confirm the reporting with counsel.
- Missing the two-year window. The clock starts when you obtain the decree, not when you move.
Where I fit: getting the purchase right the first time
This requirement is a real estate transaction with legal conditions attached, which is why the order of work matters. Here's the order I recommend:
- Settle title structure with your attorney before the offer. Your filing year decides your options.
- Confirm the seller is unrelated during due diligence, including who stands behind a selling entity.
- Choose a home that works as a principal residence: for the family, schools, healthcare and the routines you'll actually keep.
- Close inside the two-year window, with time to spare.
- Make sure the deed is presented to the Property Registry, and keep the evidence your annual report will need. Ask your closing attorney or CPA about filing for the municipal principal-residence exemption, which DDEC accepts as supporting proof.
Getting these right at purchase is far easier than fixing them in year three of a decree.
About the author. Christian Kleiner is Broker-Owner of Christian Kleiner Luxury Real Estate LLC (License C-26640), based full-time in Dorado Beach, Puerto Rico. He has about 30 years of real estate experience and focuses on high-net-worth clients and Act 60 Individual Resident Investor relocations. He is the author of The Puerto Rico Tax Advantage, and his commentary has appeared in Mansion Global, the New York Post and Yahoo Finance.