Is Act 60 Still 0%? What Changes on December 31, 2026 (and What Doesn't)

Last verified: July 5, 2026

Yes — Act 60's 0% rate on capital gains, dividends, and interest is still available, but only to Resident Individual Investor applications filed on or before December 31, 2026. Applications filed on or after January 1, 2027 get a 4% rate instead, under Act 38-2026, the law Puerto Rico enacted in March 2026.

That single sentence answers the question most of the internet still gets wrong. A lot of what you'll read about Puerto Rico's investor incentive was written before March 2026 and describes a program that no longer exists in that form. Here's what actually changed, what didn't, and how to think about the deadline if you're weighing a move.

What is Act 38-2026?

Act 38-2026 is the amendment to Puerto Rico's Incentives Code (Act 60-2019) that Governor Jenniffer González-Colón signed on March 10, 2026. It restructures Chapter 2 of Act 60 — the Resident Individual Investor decree, the successor to the old Act 22 — in three big ways: it extends the program twenty years, it changes the tax rate for future applicants, and it tightens who can apply. We covered the bill's path through the legislature when HB 505 passed; this is what the enacted law means for your timing. For a section-by-section legal analysis of the amendments, the tax team at Maceira Zayas has published a detailed breakdown.

One honest caveat you won't find in most coverage: Act 38-2026 took effect on signing, but as of this writing it remains subject to review by Puerto Rico's Financial Oversight and Management Board under PROMESA. Nothing public suggests the Board intends to block it, but anyone planning around the law should confirm current status before acting.

What happens if I apply by December 31, 2026?

You lock in the current structure: 0% Puerto Rico tax on interest, dividends, and capital gains that accrue after you become a bona fide resident, with those benefits running through December 31, 2035.

The date that matters is your application filing date — not when your decree is approved, and not when you physically move. An application timestamped in DDEC's Incentives Portal by 11:59 p.m. on December 31, 2026 is processed under the 0% rules even if the decree issues and your residency begins in 2027.

Two things filing early does not do. It doesn't exempt you from actually establishing bona fide residency — a decree without genuine residency is paper, and the tax benefits don't attach to paper. And it doesn't shelter gains that built up before your move; pre-relocation appreciation follows separate rules (more on that below).

What happens if I apply on or after January 1, 2027?

You get a 4% flat Puerto Rico rate on the same categories of income — interest, dividends, and post-residency capital gains — with benefits running through December 31, 2055. Two new eligibility requirements also kick in for the 2027 cohort:

A six-year lookback. Post-2026 applicants must show they weren't Puerto Rico residents during the six years before relocating. The rule targets cyclical relocation, not genuine new arrivals.

A registered primary residence. The obligation to acquire a Puerto Rico primary residence within two years of the decree continues, with ownership limited to you individually, jointly with your spouse, or through an eligible trust.

Is 0% actually better than 4%? The honest math

Mostly yes, but it's closer than the headline suggests, and here's the nuance almost nobody publishes: the two cohorts don't just get different rates — they get different runways.

File in 2026 and your 0% runs through 2035. That's roughly nine years of benefit. File in 2027 and your 4% runs through 2055 — nearly three decades. On a large, front-loaded gain plan (say, you're expecting a liquidity event in the next five years), 0% wins decisively: the difference is 4% of every qualifying dollar, and your event lands well inside the 2035 window. On a slow-compounding, multi-decade plan, the 2055 runway has real value, and Act 38-2026 even lets grandfathered holders voluntarily swap into the 4%/2055 framework later if the longer horizon starts to look better.

Either way, the federal side doesn't change. Under Section 933 of the U.S. Internal Revenue Code, bona fide Puerto Rico residents exclude Puerto Rico-source income from federal tax. Mainland long-term capital gains can reach 23.8% federal before state tax. Puerto Rico at 4% is still not playing the same game — but Puerto Rico at 0% is better, and the window to take it closes December 31.

What doesn't change at all

The rest of the program is intact. The bona fide residency tests (including the 183-day presence rule) are unchanged. The 4% corporate rate for Export Services businesses under Chapter 3 is untouched by Act 38-2026. The annual obligations continue for everyone: a $5,000 filing fee and a $10,000 charitable contribution to qualifying Puerto Rico nonprofits, half of it to organizations fighting child poverty.

And the pre-move appreciation rule stays exactly as strict as it's always been: gains that accrued before you established residency are never covered at 0% or 4%. Sell within ten years of your move and Puerto Rico's ordinary rates apply to that pre-move slice; hold more than ten years and it's taxed at 5%. Anyone telling you a decree erases taxes on gains you're already sitting on is selling you something.

What existing decree holders should know

If you already hold a decree — including a legacy Act 22 decree — nothing is taken from you. Decrees are contracts with the Government of Puerto Rico, and your grandfathered terms remain in force through 2035. Your one new decision is optional: Act 38-2026 lets you modify your decree to adopt the 4% rate in exchange for the 2055 runway. Whether that trade makes sense depends entirely on your income pattern and time horizon.

The realistic timeline from here

The deadline is a filing deadline, but a credible application isn't an afternoon's work. You'll need identity and financial documentation, a clean application through the Incentives Portal, and — if you're serious about the benefits, not just the decree — a residency plan that survives scrutiny, because Puerto Rico's incentives office has shifted visibly toward compliance enforcement, auditing nearly 1,800 decrees in 2025 alone. Starting in the fall means competing with everyone else who waited. Starting now means December is paperwork, not panic.

Frequently Asked Questions

Is Act 60 still 0% in 2026? Yes. The 0% rate on post-residency capital gains, dividends, and interest is available to Resident Individual Investor applications filed on or before December 31, 2026. Applications filed later receive a 4% rate under Act 38-2026.

What is the Act 60 deadline? December 31, 2026. An application timestamped in Puerto Rico's Incentives Portal by 11:59 p.m. that day is processed under the 0% rules, even if approval and relocation happen in 2027.

What changes on January 1, 2027? New applicants pay a 4% Puerto Rico rate on interest, dividends, and post-residency capital gains, must pass a six-year non-residency lookback, and receive benefits through 2055 instead of 2035.

Do I have to move to Puerto Rico before December 31, 2026? No. The application filing date controls which rules apply. But the tax benefits only ever attach once you genuinely establish bona fide residency — the decree alone doesn't reduce anyone's taxes.

Does Act 38-2026 affect people who already have decrees? No. Existing decrees, including legacy Act 22 decrees, are grandfathered through 2035. Holders may optionally modify their decree to take the 4% rate with a 2055 horizon.

Does the 0% rate cover gains from before my move? No, and it never has. Pre-relocation appreciation is taxed at Puerto Rico's ordinary rates if recognized within ten years of establishing residency, or 5% after a ten-year hold.

Does the December 2026 deadline affect Export Services (Chapter 3) businesses? No. Act 38-2026 amends the individual investor program only. The 4% corporate rate for Export Services is unchanged.

Is Act 38-2026 final? It was signed March 10, 2026 and is effective by its terms, but remains subject to review by Puerto Rico's Financial Oversight and Management Board under PROMESA. Confirm current status before making decisions based on it.

Thinking about filing before the deadline? The application window is real and the fall rush is predictable. Schedule a consultation — we'll connect you with the attorneys, CPAs, and relocation professionals who can tell you whether the December 31 filing makes sense for your situation, and what a clean application actually requires.

This article is general information, not tax or legal advice. Act 60 decisions depend on your specific facts — talk to advisors before acting.