How to Buy Property in Puerto Rico Under Act 60: Step-by-Step Guide
By Harry Carrasquillo | Five Star Real Estate by Shift Realty PR
Published: 2025 | Category: Act 60 Real Estate
If you’re planning to relocate to Puerto Rico under Act 60 and buy property, you’re about to make one of the best financial decisions of your life — if you do it right.
I’m Harry Carrasquillo, and I’ve guided over $50 million in Puerto Rico real estate transactions. A large share of those have been Act 60 buyers who moved from New York, California, Texas, and Florida. I’m also an accountant and tax strategy specialist, which means I see the full picture — not just the real estate, but how your property purchase fits into your overall Act 60 compliance and tax strategy.
This guide walks you through every step of buying property in Puerto Rico under Act 60. Use it as your roadmap.
What Is Act 60, and Why Does Property Matter So Much?
Act 60 (the Puerto Rico Incentives Code, consolidating the former Acts 20 and 22) offers qualifying individuals extraordinary federal tax benefits:
- 0% capital gains tax on appreciation accrued after becoming a resident
- 4% flat corporate/pass-through income tax rate on qualifying business income
- 0% tax on dividends and interest for qualifying residents
But these benefits only apply if you establish bona fide residency in Puerto Rico under IRS Section 937. And one of the clearest ways to demonstrate that Puerto Rico is your true home? Owning property and actually living in it.
The IRS scrutinizes Act 60 decree holders more than almost any other taxpayer category. Your real estate purchase isn’t just a lifestyle decision — it’s a compliance document.
Step 1: Understand the Residency Requirements Before You Shop
This is the step most buyers skip — and the one that costs them the most.
Before you fall in love with a property, understand what IRS bona fide residency actually requires:
The Presence Test: You must be physically present in Puerto Rico for at least 183 days per year. Your property needs to be somewhere you actually spend time — not a trophy asset you visit twice a year.
The Tax Home Test: Puerto Rico must be the location of your principal place of business or employment, or your primary residence if you don’t have a principal business location.
The Closer Connection Test: You must demonstrate that your closer connection is to Puerto Rico, not to a US state. This means your primary home, your social connections, your professional affiliations, and your daily life should be centered in Puerto Rico.
In my experience selling luxury real estate in Puerto Rico: Buyers who buy the “right” property in the “right” neighborhood make all three tests significantly easier to satisfy. Location matters for compliance purposes, not just lifestyle.
Step 2: Get Your Act 60 Decree Application Started Early
Here’s something most real estate agents won’t tell you: you don’t need a decree in hand to start shopping, but you should have your application in process before you close.
Why? Because the property you buy should match the lifestyle you’re documenting in your application. An oceanfront estate in Dorado Beach tells a very different story than a small condo you bought as an investment.
Work with a qualified Act 60 attorney (I can introduce you to the best ones in Puerto Rico) to:
- Start your decree application
- Understand what documentation you’ll need
- Determine the right entity structure for your property purchase
Step 3: Choose the Right Neighborhood for Act 60 Compliance
Not all neighborhoods are equal for Act 60 purposes. Here’s my frank breakdown of the top markets:
Dorado Beach — Best for Established Act 60 Community
Dorado Beach has become the epicenter of Act 60 luxury living in Puerto Rico. The established community of decree holders means you’ll have neighbors who understand your situation, community events that support your documented presence, and a lifestyle that’s genuinely hard to replicate anywhere else. Prices: $800K–$20M+.
Condado — Best for Urban Lifestyle Documentation
Condado’s walkable, dense urban environment makes it easy to document daily Puerto Rico presence. You walk to restaurants, gyms, shops — every receipt is a data point. Strong for buyers who want to prove a genuine lifestyle change. Condos from $400K, houses and larger units from $1.5M+.
Bahía Beach — Best for Privacy and Growth Potential
The St. Regis Bahía Beach Resort community offers extraordinary privacy and a growing Act 60 presence. Less established than Dorado but increasingly sought-after. Prices: $1.5M–$10M+.
Palmas del Mar — Best Value for Act 60 Buyers
Palmas del Mar in Humacao offers the best value-per-square-foot in the luxury category, with a large US expat and Act 60 community. Strong rental income potential. Prices: $300K–$3M+.
Old San Juan — Best for Culture and Appreciation
Historic renovated condos in Old San Juan offer prestige, authentic Puerto Rican lifestyle, and strong appreciation trajectory. Best for buyers who genuinely want urban island living. Prices: $300K–$2M+.
Step 4: Determine the Right Ownership Structure
How you take title to your Puerto Rico property has significant tax and compliance implications. The main options:
Individual ownership: Simplest, but may expose the property to personal liability and can complicate estate planning.
LLC ownership: Provides liability protection, can simplify management if you have multiple properties, but may affect your residency documentation — discuss with your attorney.
Trust ownership: Optimal for estate planning purposes, particularly for high-net-worth buyers with complex family situations.
Puerto Rico corporation: For buyers with qualifying Act 60 business income, owning property through a PR corporation can be advantageous — but requires careful coordination with your decree terms.
My recommendation: Get this conversation happening with your attorney before you make an offer. It costs nothing to discuss and can save significant money.
Step 5: Work With an Agent Who Understands the Full Picture
This is where most Act 60 buyers make a critical mistake: hiring a good general real estate agent instead of a specialist who understands the intersection of real estate and tax strategy.
A generalist agent will show you nice properties. A specialist will show you the right properties for your Act 60 situation, help you avoid compliance pitfalls, connect you with the attorneys and accountants you need, and structure your transaction to support your overall strategy.
I’m Harry Carrasquillo at Five Star Real Estate by Shift Realty PR. With $50M+ in Puerto Rico transactions and a background as an accountant and tax strategy specialist, I’m the only agent in this market who brings both perspectives to the table.
Step 6: Navigate the Puerto Rico Purchase Process
Here’s what the transaction looks like once you’ve found the right property:
Letter of Intent / Offer: In Puerto Rico, most transactions start with a Letter of Intent (LOI) rather than a formal offer. This outlines price, terms, and due diligence period.
Due Diligence: Typically 30–45 days. Includes:
- Title search (CRIM — Centro de Recaudación de Ingresos Municipales records)
- Property inspection
- HOA review (rules, financials, pending special assessments)
- Survey review
- Environmental review for beachfront/waterfront properties
Purchase and Sale Agreement (P&S): Once due diligence is complete, the formal P&S is executed.
Closing: Conducted before a Puerto Rico notary (different from US mainland closings). Transfer tax (CRIM stamp) and closing costs typically run 2–4% of purchase price for buyers.
Timeline: Typically 45–90 days from accepted offer to close.
Step 7: Document Your Puerto Rico Lifestyle From Day One
The moment you close on your property, your compliance calendar starts. Begin documenting your Puerto Rico presence immediately:
- Keep receipts from PR restaurants, grocery stores, gyms, and businesses
- Register your vehicles in Puerto Rico
- Obtain a Puerto Rico driver’s license
- Join local clubs, organizations, and community groups
- File PR tax returns and pay appropriate PR taxes
- Open Puerto Rico bank accounts
- Update your billing addresses, professional registrations, and memberships
Your real estate agent should be your first connection to the community — which is another reason to choose someone who is embedded in the Act 60 ecosystem.
The Bottom Line: Act 60 Real Estate Is a Strategic Decision
Buying property in Puerto Rico under Act 60 is not just a real estate transaction — it’s a foundational element of your compliance strategy, your wealth-building plan, and your new life.
Done right, your Puerto Rico property purchase can anchor 0% capital gains treatment on significant investment appreciation, support your bona fide residency documentation, and give you a world-class home in one of the most beautiful places in the Caribbean.
Done wrong, it can cost you your decree, trigger IRS scrutiny, and result in back taxes and penalties that far exceed any real estate commission you saved.
I’ve helped dozens of Act 60 buyers make this transition correctly. Let’s talk about your situation before you make any decisions.
📞 Contact Harry Carrasquillo: harry@shiftrealtypr.com
📱 @fivestarealestate on Instagram and Facebook
Harry Carrasquillo is an accountant, tax strategy specialist, and luxury real estate advisor at Five Star Real Estate by Shift Realty PR. He has closed over $50M in Puerto Rico real estate transactions, with deep expertise in Act 60 buyer relocation and luxury market strategy.
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