No. Puerto Rico's Act 60 is still in force. What changed is the Individual Resident Investor program inside it. Under Act 38-2026, signed March 10, 2026, decree applications filed by December 31, 2026 keep a 0% Puerto Rico tax rate on qualifying interest, dividends and post-move capital gains through 2035. Applications filed from January 1, 2027 get a 4% rate instead, and the program now runs through 2055.
If you've heard that Act 60 is ending, you've heard a compressed version of something real. One set of terms closes to new applicants at the end of this year. The program itself was just extended by twenty years.
The difference matters because the two readings lead to opposite mistakes. Believe the program is ending, and you either rush a decision you haven't prepared for or write Puerto Rico off. Understand what actually changed, and you can decide calmly which track, if either, fits.
This is the first of ten articles. It covers what changed and what didn't. The rest of the series takes each consequence one at a time.
Where the "Act 60 is ending" headline comes from
Act 60-2019, the Puerto Rico Incentives Code, pulled Puerto Rico's earlier incentive laws into one code, including the former Act 22 investor program. Under its Individual Resident Investor (IRI) chapter, a qualifying person who becomes a bona fide Puerto Rico resident and holds a decree could pay 0% Puerto Rico income tax on qualifying interest, dividends and capital gains on appreciation after the move. Those decrees ran through December 31, 2035.
Act 38-2026 changed the deal for future applicants. Anyone filing after December 31, 2026 can no longer get the 0% rate. That is the part that is ending, and it is where the headline comes from.
The two tracks at a glance
Under Act 38-2026, the date your decree application is filed decides which terms apply.
Filed by December 31, 2026 | Filed on or after January 1, 2027 | |
|---|---|---|
Puerto Rico tax on qualifying interest, dividends and post-move capital gains | 0% | 4% |
Decree runs through | December 31, 2035 | December 31, 2055 |
Prior-residency rule | Not a Puerto Rico resident between January 17, 2006 and January 17, 2012 | Not a Puerto Rico resident between January 17, 2006 and January 17, 2012, nor in the six years before relocating |
How the required primary residence may be held | Rules in effect before Act 38-2026, which still allow purchase through an eligible Puerto Rico entity | Full title, registered or pending registration, in your name, jointly with a spouse, or in a qualifying grantor trust |
Source: DDEC Office of Incentives, Informative Bulletin No. 2026-004 (April 24, 2026). "Filed by December 31" means received by 11:59 p.m. that day, per the time stamp on the filing-fee payment in DDEC's Incentives Portal.
Two details in that table do most of the work.
The filing date decides the track, not the approval date. DDEC states that applications filed before January 1, 2027 keep the benefits in effect when they were filed, however long approval takes. Post 2 covers what "filed" requires in practice.
You can't take 0% now and switch to 4% later automatically. The 2055 term and the 4% rate come together. Someone who files in 2026 can take 0% through 2035 and later request an extension to 2055, but the 4% rate applies from January 1 of the year that request is filed, and only if the 2055 framework is still in effect then. Post 3 is about how to weigh that choice.
What didn't change
- The rest of the Incentives Code. Act 38-2026 amended five sections tied to the IRI program. It was not a rewrite of Act 60.
- Existing decrees. Holders of approved Act 22 or Act 60 investor decrees keep their terms. They may request the 2055 extension, on 4% terms, if they want it.
- Residency as the foundation. A decree is a Puerto Rico incentive. Whether you are a bona fide resident for U.S. federal tax purposes is a separate question under IRS rules: a presence test, a tax home test and a closer connection test. That is the subject of Post 4.
- The primary-residence commitment. Investor decree holders still commit to acquiring a primary residence in Puerto Rico. What changed for 2027 filers is how the property may be titled. Post 7 covers it.
Three misreadings to avoid
"I need my decree approved by December 31." You don't. The filing time stamp controls. But a filing is an application submitted through DDEC's portal with the fee paid, and preparing one takes time.
"4% means Puerto Rico isn't worth it anymore." The 4% track trades a higher rate for twenty more years. Whether that beats 0% through 2035 depends on your time horizon, your income mix and how long you plan to stay. That is arithmetic for your CPA, not a conclusion to draw from a headline.
"If I buy a home before December 31, I've locked in 0%." Buying property doesn't file an application, establish residency or qualify you for a decree. The home matters; it just isn't the trigger.
Who should be paying attention now
From October 6 to December 31 is about twelve weeks. That is enough time to make a considered decision if you start now, and not much more.
- Individuals already evaluating a move. The question has a date on it now.
- Wealth managers and financial advisors whose clients have raised Puerto Rico. A "someday" conversation is now a this-quarter conversation.
- Family offices weighing a family member's relocation. Note the prior-residency rules: anyone who has lived in Puerto Rico before should check them early.
Where I fit, and where I don't
I'm a real estate broker, not a tax attorney or CPA. I've spent about 30 years in real estate and I live and work full-time in Dorado Beach, where my practice focuses on high-net-worth clients and Act 60 relocations. My part is the residence: finding a home that genuinely works as a primary residence, timing the purchase around the rest of the plan, and coordinating with your tax and legal advisors.
Which track to choose, whether you're eligible, and how residency will be tested belong with a qualified Puerto Rico tax attorney or CPA, working alongside your U.S. advisors.
What comes next in this series
Over the next five weeks, every Tuesday and Thursday: the December 31 filing mechanics, choosing between 0% and 4%, bona fide residency, eligibility and annual obligations, what income a decree covers, the primary-residence requirement, the order of operations for a move, choosing where to live, and whether the move is still worth it. Post 2 runs Thursday, October 8.
Talk it through
If Puerto Rico is on your short list, for yourself, a client or a family you advise, and you want to see how the residence decision fits this timeline, book a consultation with me: https://calendly.com/christiankleiner100. We'll look at where you are, what has to happen in what order, and which specialists you'll need. Eligibility and tax decisions stay with your attorney and CPA. My job is the property and the plan around it.
About the author
Christian Kleiner is the 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.