Every Act 60 conversation happening in Condado right now circles the same date: December 31, 2026. Act 38-2026 locks in a 0% rate on capital gains, dividends and interest for anyone who secures an Individual Resident Investor decree before the calendar flips to 2027. File after that, and the rate becomes 4%. It is a real deadline, and it is driving real urgency.
It is also not the deadline that decides whether your San Juan condo purchase actually protects your decree. That one sits on the other side of the transaction, and it is where most of the trouble starts.
The deadline everyone is racing
The math behind the rush is straightforward. Under Act 38-2026, signed into law in March 2026, the program itself was extended through December 31, 2055. What changed is the rate offered to new applicants. Secure your decree before the 2027 cutoff and you keep the original 0% treatment on qualifying passive income. Miss it, and the preferential rate drops to 4%, still a meaningful break compared to mainland rates, but a different number than the one that drew most buyers to the island in the first place.
That deadline governs when you file for the decree. It says nothing about when you have to own a home.
The two-year window doesn't start where you think
For the Individual Resident Investor decree, the property requirement is separate from the filing deadline. Once your decree is approved, you have two years to purchase a Puerto Rico principal residence, bought from an unrelated seller, held personally or in a qualifying trust rather than an LLC. That window opens at approval, not at application, and it is a full two years long.
This is where the two clocks get tangled. Buyers hear "December 31" and assume every part of their Act 60 plan, including the house, needs to be locked down by New Year's Eve. It doesn't. But the relief that follows that realization can swing too far the other way. A buyer who correctly understands they don't need a closed deal by December cuts leases, delays showings, and treats the two-year property window as slack time. That assumption is the one that causes problems later, because the requirement waiting at the end of that window is stricter than most people expect.
What Act 38-2026 changed about the word "purchased"
The clarification that matters most for real estate purposes is this: the property requirement is satisfied only when the transaction has closed and title has transferred. Signing a purchase and sale agreement, even a fully executed one with earnest money down, does not count. Going under contract is a step in the process. It is not the finish line.
On the mainland, buyers sometimes treat contract execution as the moment a deal is essentially done, with closing as a formality that follows a few weeks later. Puerto Rico's Act 60 framework does not extend that courtesy. If your two-year window closes while you are still under contract, whatever the reason, the property requirement is unmet, no matter how far along the deal was.
What a San Juan closing actually looks like on a calendar
Part of why this distinction matters more here than it might elsewhere is that Puerto Rico closings run through a civil law, notary-driven process, not the title company model most mainland buyers are used to. A licensed attorney-notary drafts and executes the deed, called the escritura pública, and that signing is only one step in a sequence that includes a title and registry search, a CRIM certificate confirming property tax status, a condominium association estoppel for condo purchases, and eventual recording with the Registro de la Propiedad, which does not happen instantly.
| Step | What it involves | What can slow it down |
|---|---|---|
| Offer accepted | Purchase and sale agreement executed | Does not satisfy the Act 60 property requirement on its own |
| Title and registry search | Certified registry extract pulled and reviewed | Registry backlogs vary by workload |
| CRIM certificate | Confirms property tax status and any arrears | Older assessed values can surface unresolved municipal issues |
| Condo estoppel | Confirms HOA balance and special assessments | Association response times vary by building |
| Notary prepares and executes deed | Escritura pública signed before a notary-attorney | Financing, appraisal and lender coordination can extend this stage |
| Recording | Deed submitted to the Property Registry | Recording is not immediate and can add days to weeks |
Layer that process onto actual San Juan inventory data and the risk becomes concrete. A Stellar MLS analysis of Old San Juan residential sales, reviewed in August 2026, found a median of 22 days on market against an average of roughly 70 days, a gap wide enough to matter. One unit, 254 San José, Floor 5, sat on the market for 451 days before it closed. That kind of spread means the number most buyers glance at, the median, hides how long an individual transaction can actually run once title work, association paperwork, and financing coordination stack up. Condado and Miramar inventory carries the same structural steps, even where turnover is faster.
Where the math breaks
Here is the scenario that catches people off guard. A buyer's decree gets approved in early 2027. They read "two years" and start a leisurely search that summer, maybe getting serious by year two. If all they needed was a closed home somewhere on the island before the window ran out, that pace might work.
But most Act 60 buyers also want their bona fide residency to begin in a specific tax year, because the 0% treatment applies only to gains accrued after that residency starts. Establishing residency requires satisfying three tests: physical presence of at least 183 days, no tax home outside Puerto Rico, and no closer connection to the mainland than to the island. A signed contract does not build closer connection the way a recorded deed does. Neither does a rental while you wait for a deal to close. If a buyer wants a given calendar year to count, the property piece needs to be closed and recorded within that year, not merely under contract by December.
That compresses the practical window considerably. A search that starts in the fall of a target year, in a market where a single Old San Juan condo association can add weeks to estoppel processing and where recording itself is not instant, is a tighter fit than the headline "two years" suggests.
The compliance calendar waiting on the other side
Closing is not the last step either. Individual Resident Investor decree holders take on ongoing obligations once the decree is active: an annual charitable donation of $10,000, split between two qualifying Puerto Rico nonprofits with one focused on child poverty, starting in the second tax year, a $5,000 annual filing fee to the Department of Economic Development and Commerce, and a biennial compliance certificate.
Enforcement around all of this has picked up. The IRS has pursued roughly 100 criminal and civil investigations of Act 20, 22 and 60 participants since 2023, and Puerto Rico's Office of Business Incentives audited close to 1,800 decree holders in 2025, adding mandatory criminal background checks for new applicants and automatic $1,000 fines for missed annual compliance filings starting in January 2026. None of that changes because a house was under contract instead of closed. A closed, recorded deed is the kind of documentation that holds up if a decree is ever reviewed. A pending contract is not.
FAQ
Does a signed purchase and sale agreement satisfy the property requirement for my decree? No. Under Act 38-2026, the requirement is met only once the transaction has closed and title has transferred.
Can I buy through an LLC to speed up the process? No. The Individual Resident Investor decree requires the property be held personally or in a qualifying trust, not through an LLC.
Does the December 31, 2026 deadline affect people who already hold an Act 22 or Act 20 decree? No. That date applies to new applicants seeking a decree under current terms before the rate changes. Existing decree holders keep their original terms under the 2055 program extension.
Does financing change how long a San Juan closing takes? Yes. Appraisal and underwriting timing can extend a financed purchase well past what a cash transaction requires, and appraisal and bank coordination in Puerto Rico often run longer than mainland equivalents.
If you are weighing Condado, Old San Juan or Miramar against a decree timeline and want to talk through what a realistic closing calendar looks like for the specific building or block you are considering, Vin Forbes has spent years bridging island transactions with mainland expectations and can walk you through the sequence before you go under contract, not after. Tax and residency determinations are best made with a Puerto Rico CPA or attorney, and a good referral is part of that conversation too.
