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 shortened 6-year residency lookback, and stricter property rules — while the program itself is extended through 2055. Here is exactly what changes, what doesn't, and what the deadline means in practice.

What changes on January 1, 2027?

For applications filed after December 31, 2026:

The controlling event is the application filing date, not the decree grant date and not your move date. An application filed in December 2026 that DDEC approves in mid-2027 is still under the legacy 0% regime.

Is the 0% rate going away for existing decree holders?

No. Decrees are contracts with the government of Puerto Rico, and existing holders — and applicants who file before the deadline — keep the terms of their decree. The 2026 changes apply prospectively to new applications. (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 on the mainland, which can exceed 30% on the same income. What the change really does is remove the once-in-a-generation quality of the 0% rate. The trade-offs that mattered before the deadline — genuinely relocating, 183+ days on the island, the donation and annual costs— matter just as much after it. The math simply becomes "very good" instead of "unbeatable."

The shortened 6-year lookback also expands eligibility after 2026: people who lived in Puerto Rico seven or eight years ago, previously locked out, can qualify under the new rules.

What does the deadline mean in practice?

DDEC processing typically takes 60–120 days, and application volume historically spikes ahead of rule changes. Practical implications, stated as facts about the process rather than advice:

• Only a filed, complete application locks the regime. Half-assembled document packages don't.
• 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?

Everything that makes the program work is 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. The extension to 2055 in fact makes the long-term planning horizon more certain than before.