Act 60 Deadline: Do You Have to Move by December 31, 2026 — or Just File?
Under Act 38-2026, the date you file your application — not the date you move — is what preserves access to the 0% rate.
Content current as of June 2026. Act 60 and its implementing regulations change frequently, and government fees, deadlines, and procedures are set by regulation and revised periodically. This page is for general informational purposes only, does not constitute legal or tax advice, and does not create an attorney-client relationship. Consult qualified Puerto Rico counsel before acting.
The short answer
A lot of people who want to relocate in 2027 believe they have already missed the window. They usually haven't. Under Act 38-2026, the key date is the date a complete application is filed with the DDEC — not the date you physically move, and not the date your decree is approved. Three different dates do three different jobs:
| Date | What it controls |
|---|---|
| Application filing date on or before Dec 31, 2026 |
Whether you may qualify for the legacy 0% regime (currently running through Dec 31, 2035) or fall under the new 4% regime (through Dec 31, 2055). This is the operative date. |
| Your physical move date | When you actually become a bona fide Puerto Rico resident and when benefits begin to accrue. It also drives the non-residency look-back. It does not set your rate. |
| Decree approval date | Nothing about your rate. DDEC processing can take months, and approval may land well after you file. What matters is proof of a timely, complete filing — retain it. |
So the pivotal question for a 2027 mover is not "can I move by year-end?" — it is "can a complete application be filed on or before December 31, 2026?"
What changed under Act 38-2026
Act 38-2026 amended the Individual Resident Investor (IRI) program. For a prospective applicant, the change that matters most is the filing-date cutoff:
- File a complete application on or before December 31, 2026 — to seek the legacy benefits: a 0% Puerto Rico income tax rate on qualifying interest, dividends, and post-move capital gains (with a 5% rate on certain pre-move appreciation recognized after 10 years of Puerto Rico residency), currently running through December 31, 2035.
- File on or after January 1, 2027 — and a 4% rate generally applies to that income through December 31, 2055, with two added requirements: a rolling six-year non-residency look-back and recordation of the Puerto Rico residence in the Property Registry within two years.
For a deeper walkthrough of every change, see Act 38-2026 (HB 505): What Changed for Act 60 Investors and the decree comparison table.
"I want to move in 2027 — what should I do?"
In many cases, a person who plans to relocate in 2027 should still evaluate filing the IRI application before December 31, 2026, precisely because the filing date — not the move date or the approval date — is the operative date for the legacy regime.
You can file before you move. The DDEC accepts a complete application filed before you physically relocate, based on a sworn statement of intent to become a bona fide Puerto Rico resident — which is exactly what lets a 2027 mover lock in the 2026 filing date. The decree becomes effective only once you establish residency, and the tax benefits themselves still depend on actually becoming — and remaining — a bona fide Puerto Rico resident.
Filing on time is necessary — but not sufficient
Locking the 2026 filing date preserves your rate. It does not, by itself, deliver the tax benefit. To receive and keep IRI benefits you must become — and remain — a bona fide Puerto Rico resident under IRC §937, which turns on three tests, every year:
- Presence — generally at least 183 days per year in Puerto Rico (with certain regulatory alternatives);
- Tax home — your main place of work or business in Puerto Rico, or, for retirees and pure investors, your real and substantial place of abode; and
- Closer connection — your life centered in Puerto Rico rather than on the mainland.
Puerto Rico residency positions draw IRS scrutiny, so contemporaneous documentation is central to the strategy. See Puerto Rico Bona Fide Residency & the Source-of-Income Rules.
The two look-backs are not the same
Eligibility depends on a non-residency look-back, and which one applies depends on your filing date:
- Filed on or before December 31, 2026: you must not have been a Puerto Rico resident at any time during the fixed legacy window of January 17, 2006 – January 17, 2012 (the six years preceding the original Individual Investor Act).
- Filed on or after January 1, 2027: the test changes to a rolling six-year look-back — you must show non-residency in Puerto Rico for the six years immediately before you relocate.
"Resident" here means domicile — a true, fixed, permanent home — not mere physical presence. Presence of 183 or more days in a look-back year can create a rebuttable presumption of residency for that year, which may be overcome with evidence that your domicile remained elsewhere. Each relevant year should be documented.
What it costs to file
Beyond legal and CPA fees, the program carries government and third-party costs — a $5,000 application filing fee at submission, a $5,000 annual report fee, and a $10,000 annual charitable contribution (from the second taxable year, split between two qualifying Puerto Rico nonprofits), plus the requirement to buy a Puerto Rico principal residence within two years from an unrelated seller. Government figures are set by regulation and confirmed at filing. See the Annual Compliance Calendar & Filing Deadlines.
Can a complete application realistically be filed by December 31, 2026?
That is exactly the question to answer now. A complete file requires eligibility and prior-residency analysis, income-source mapping, dated valuations of appreciated assets, several certifications obtained by counsel, and sworn statements — and DDEC processing times vary with filing volume and any deficiencies. The closer we get to year-end, the less room there is to cure problems. Prospective 2027 movers are encouraged to begin the eligibility and filing-strategy diagnostic well in advance.
Frequently Asked Questions
No. The December 31, 2026 cutoff is a filing deadline, not a moving deadline. What must be done by year-end is filing a complete application with the DDEC to seek the legacy 0% regime. You can file before you physically relocate, based on a sworn statement of intent to become a bona fide Puerto Rico resident — though the tax benefits still require actually establishing bona fide Puerto Rico residency.
Your application generally falls under the new 4% regime (running through December 31, 2055) instead of the legacy 0% regime, and two additional requirements attach: a rolling six-year non-residency look-back and recordation of your Puerto Rico residence in the Property Registry within two years. The 4% rate is still a significant benefit compared with mainland capital gains rates — but on a large near-term gain, the 0%-versus-4% difference is real money.
No. The filing date controls the rate. DDEC approval may come months after you file. The decree takes effect when you accept it under oath, and its benefits apply to qualifying income that accrues after you have established bona fide Puerto Rico residency. Retain proof of a timely, complete filing.
The 0% (or 4%) rate is a Puerto Rico income tax result on qualifying income that accrues after you become a resident. It does not automatically eliminate U.S. federal tax. U.S.-source dividends and certain U.S.-source interest may remain federally taxable, and gains that accrued before you became a resident generally remain U.S.-taxable. The federal outcome depends on bona fide residency under IRC §937 and proper income sourcing.
It varies, but a complete file involves eligibility and prior-residency analysis, income-source mapping, dated asset valuations, counsel-obtained certifications, and sworn statements. Because the work is front-loaded and DDEC processing times vary, prospective 2026 filers should begin the diagnostic well before year-end rather than close to the deadline.
Related Resources
- Act 38-2026 (HB 505): What Changed — the full statutory backbone behind this deadline
- Act 60 Decree Comparison — legacy 0% vs. new 4% requirements side by side
- Bona Fide Residency & Source-of-Income Rules — what it takes to actually qualify
- Annual Compliance Calendar & Filing Deadlines — fees, donation, and reporting obligations
- Act 60 Savings Calculator — estimate the 0% vs. 4% difference on your numbers
- Does Act 60 Eliminate GILTI/Subpart F? — for business owners with a foreign company
Moving in 2027? Find out whether a 2026 filing is feasible for you.
We run an eligibility and filing-strategy diagnostic that confirms your prior-residency history, income sources, appreciated assets, and whether a complete application can be filed before the December 31, 2026 cutoff.
Book a Free Strategy CallThe information on this page is for general educational purposes only and does not constitute legal or tax advice. Act 60 and Act 38-2026 are subject to change, and certain implementation details may remain subject to regulatory and oversight-board confirmation. Tax outcomes depend on individual circumstances including residency, income sourcing, asset history, and applicable law. No attorney-client relationship is formed by viewing this content. For advice specific to your situation, schedule a consultation.