Act 60 Changes in 2026: The Deadline, the 4% Rate, and What Happens Next
The biggest change to Puerto Rico's investor incentives since 2020 takes effect at year-end: individual investor applications filed after December 31, 2026 will no longer qualify for the 0% rate. They fall under a new regime — a 4% preferential rate, a rolling 6-year residency lookback, and stricter property rules — while the program horizon is extended to 2055.
The amending statute is Act 38-2026, signed March 10, 2026, which amends Act 60-2019 (Puerto Rico Incentives Code). Firm analyses of the enacted text are available from Procopio and MZLS.
Watch — the deadline in 2 minutes
What changes on January 1, 2027?
| Rule | Filed through Dec 31, 2026 | Filed after Dec 31, 2026 |
|---|---|---|
| Rate on covered PR-source capital gains, dividends, interest | 0% | 4% |
| Prior-residency test | No PR residency Jan 17, 2006 – Jan 17, 2012 (fixed window) | No PR residency in the 6 years before relocating (rolling) |
| Home purchase | Required within 2 years of decree | Required within 2 years, plus recording in the property registry |
| Program horizon | Decree terms per statute | Program extended through 2055 |
The controlling event is the application filing date: an application filed in December 2026 that DDEC approves in mid-2027 is still under the legacy 0% regime — not the grant date, not the move date.
Is the 0% rate going away for existing decree holders?
No. Decrees are contracts with the government of Puerto Rico; the 2026 changes apply prospectively, so existing holders and anyone who files before the deadline keep their decree terms. (Separately, compliance enforcement is tightening for everyone; see annual requirements for the automatic $1,000 late-filing fines that began in 2026.)
Is 4% still worth it?
For many people, yes — 4% on long-term gains, dividends, and interest still compares favorably to combined federal and state rates that can exceed 30% on the mainland. The trade-offs are unchanged: genuinely relocating, 183+ days on the island, the donation and annual costs.
The shortened 6-year lookback also expands eligibility: people who lived in Puerto Rico seven or eight years ago, previously locked out, can qualify.
What does the deadline mean in practice?
DDEC processing typically takes 60–120 days, and application volume historically spikes ahead of rule changes. Stated as facts about the process rather than advice:
- Only a filed, complete application locks the regime.
- The document collection phase — address history, sworn statements, background checks, financial declarations — is usually the long pole. The application process guide lists everything required.
- Applicants who file late in 2026 should expect slower DDEC responses due to volume.
What stays the same?
Unchanged: the federal §933 exclusion for bona fide residents, the three residency tests, the $10,000 annual donation, the $5,000 annual fee, annual DDEC reporting, and 15-year decree terms.
Frequently Asked Questions
- If I apply in 2026 but move in 2027, which rules apply?
- The application filing date controls the decree regime. Residency and its tax effects begin when you actually establish bona fide residency.
- Does the 6-year lookback help or hurt?
- It helps post-2026 applicants: a shorter lookback means fewer people are disqualified by past Puerto Rico residency. Pre-deadline applicants remain under the current lookback — details in requirements.
- Could the rules change again?
- Puerto Rico's incentives have been amended repeatedly since 2012, and federal scrutiny continues. Existing decrees are contractual, but nothing here is guaranteed forever — a reason documentation discipline matters from day one.