Puerto Rico has attracted plenty of attention from investors, entrepreneurs, and professionals considering a change of scenery—and Act 60 is often part of that conversation.
The potential tax benefits can certainly sound attractive. But moving to Puerto Rico involves much more than changing your mailing address and unpacking a few boxes. Residency rules, income sourcing, eligibility requirements, and your actual life on the island all matter.
And if you’re going to relocate to Puerto Rico, there’s another important question: Where do you actually want to live?
For many newcomers, that search leads to Palmas Del Mar.
Why Act 60 Has So Many People Considering a Move to Puerto Rico
What is Puerto Rico Act 60?
The Puerto Rico Incentives Code, commonly called Puerto Rico Act 60, consolidated numerous economic incentive programs into one code in 2019. One of those programs is the Individual Resident Investor incentive, which traces back to former Act 22.
This particular tax incentive has attracted investors interested in establishing bona fide residency in Puerto Rico and potentially receiving preferential Puerto Rico tax treatment on qualifying investment income.
There’s more to the move than tax benefits
A tax strategy may get Puerto Rico onto someone’s radar, but taxes aren’t where you’ll spend Saturday afternoon.
People considering a move to Puerto Rico also need to think about housing, schools, healthcare, recreation, transportation, community, and whether island life genuinely suits them. That’s one reason communities such as Palmas Del Mar become part of the conversation.
Understanding Act 60 and the Puerto Rico Incentives Code
From Act 22 to Act 60
If your research keeps bouncing between Act 22 and Act 60, you’re not imagining things. The Individual Resident Investor program originated under Act 22 and was later incorporated into the broader Puerto Rico Incentives Code.
It’s also important to know that the law continues to evolve. Act 38-2026 amended the Individual Resident Investor program, including extending it and changing the Puerto Rico tax rate applicable to certain future applicants.
Act 60 benefits aren’t automatic
Buying property in Puerto Rico doesn’t automatically qualify someone for Act 60 benefits. Neither does simply spending part of the year on the island.
The incentive has eligibility, application, residency, and ongoing compliance requirements. That distinction matters—a lot.
What Tax Benefits Under Act 60 Could Mean for an Investor
Interest, dividends and capital gains
For qualifying Individual Resident Investors under the existing pre-2027 framework, Puerto Rico law provides exemptions from Puerto Rico income tax for qualifying interest and dividends and certain post-residency capital gains.
However, the timing of when an asset was acquired, when appreciation occurred, when a gain is recognized, and where income is sourced can affect the tax treatment.
In other words, “zero tax” makes a catchy headline. Actual tax law requires a longer conversation.
Puerto Rico tax and federal tax aren’t the same thing
Puerto Rico’s tax system and U.S. federal tax rules interact in ways that require careful planning.
Under Section 933 of the U.S. Internal Revenue Code, qualifying bona fide residents can generally exclude qualifying Puerto Rico-source income from U.S. gross income. Income from outside Puerto Rico, however, may still create U.S. federal income tax and filing obligations.
That’s why individualized professional advice is essential.
Residency in Puerto Rico: Moving Here Means Actually Living Here
Becoming a bona fide resident of Puerto Rico
For U.S. tax purposes, becoming a bona fide resident of Puerto Rico generally requires satisfying three areas: the presence test, having no tax home outside Puerto Rico, and not having a closer connection to the United States or a foreign country than to Puerto Rico.
The familiar “183-day rule” is one way the presence requirement may be satisfied, but IRS rules include other qualifying routes and exceptions. Residency is therefore more nuanced than simply counting to 183.
Your life needs to support your residency
The IRS closer-connection analysis can consider facts such as the location of your permanent home, family, belongings, banking, business activities, driver’s license, voting registration, and other personal ties.
So residency in Puerto Rico is about establishing a real life here—not simply owning an island address.
Before You Move to Puerto Rico, Think Beyond the Tax Incentive
Tax planning should happen before the moving truck arrives
If Act 60 is influencing your relocation, speak with qualified Puerto Rico and U.S. tax professionals before making major investment, residency, or transaction decisions.
This is particularly important when existing investments have appreciated before the move. IRS sourcing rules can affect how gains attributable to periods before Puerto Rico residency are treated.
Choose somewhere you’ll actually enjoy living
Then comes the much more enjoyable question: Where will home be?
Palmas Del Mar offers a very different experience from living in metropolitan San Juan. It’s a large resort-style community on Puerto Rico’s eastern coast where residents can combine everyday life with beaches, golf, tennis, pickleball, restaurants, a marina, and other amenities.
For someone establishing a genuine residence in Puerto Rico, lifestyle deserves just as much thought as spreadsheets.
Buying Property in Puerto Rico While Planning Your Relocation
Finding your home in Palmas Del Mar
The right property will depend on how you plan to use it. Some buyers want a low-maintenance condominium. Others want a villa near the beach or a single-family home with more privacy.
If Palmas Del Mar will become your primary home, think beyond resale value. Consider your daily routine, preferred neighborhood, amenities, home maintenance, backup power, and how much time you’ll genuinely spend there.
Build the right Act 60 team
An experienced real estate professional can help with the property side of your relocation. The tax and legal side belongs with qualified CPAs, tax advisors, and attorneys familiar with Puerto Rico and international tax matters.
Each professional has a different job. That’s a good thing.
Act 60 Isn’t a One-Size-Fits-All Tax Strategy
Income sourcing can change the answer
Two people can relocate to Puerto Rico and have very different tax outcomes because their income, investments, businesses, and personal circumstances differ.
A resident individual investor should understand how income is sourced, how pre-move appreciation may be treated, and which income qualifies for the applicable Puerto Rico incentive.
Bona fide residents of Puerto Rico generally report worldwide income to Puerto Rico, while U.S. filing requirements depend on factors including income source and individual circumstances.
Act 60 changed again in 2026
There’s another reason not to rely on an old YouTube video or blog post for tax planning: the rules change.
Act 38-2026 extended the Individual Resident Investor program through 2055 and established a 4% Puerto Rico income tax rate on specified qualifying investment income for applicants filing after December 31, 2026, while preserving the prior framework for qualifying applications filed by that date.
Current professional guidance is essential.
Thinking About Act 60 and a Move to Palmas Del Mar?
Start with the lifestyle
Act 60 may provide the financial reason to investigate Puerto Rico. It shouldn’t be the only reason to live here.
Spend time on the island. Explore communities. Learn what everyday life feels like. And if Palmas Del Mar is on your shortlist, tour different neighborhoods and property types before deciding where you belong.
Build your team before making the move
A successful relocation can involve several professionals: a real estate agent, Puerto Rico attorney, CPA or tax advisor, financial advisor, and sometimes additional specialists depending on your situation.
Important: Maria is a real estate professional, not a CPA, tax advisor, or attorney. This article provides general educational information and should not be considered tax or legal advice. Act 60 tax benefits, bona fide residency, income sourcing, and eligibility depend on individual circumstances and current law. Consult qualified Puerto Rico and U.S. tax and legal professionals before making financial, tax, investment, or relocation decisions.
Have More Questions Moving To Palmas?
Reach out to Maria Brown from Palmas Dreams Homes! She’ll be happy to answer more of your questions.
Maria Brown is a passionate Realtor® in Palmas del Mar, Puerto Rico, dedicated to helping buyers find their dream homes, vacation properties, and investment opportunities in one of the Caribbean’s most sought-after resort communities.
Click here to learn more about Maria Brown and her clients