# Puerto Rico: taxes, residence and cost of living Source: https://domicile.wiki/places/puerto-rico/ (domicile.wiki, researched 2026-10-15). Data licence CC BY-SA 4.0. Research, not tax or legal advice. ## At a glance For an EU-citizen family of five living off a EUR 30M portfolio (the guide's default reader). - Score for a wealthy family: 61 / 100 - Tax on a €30M portfolio: €49,385 a year · Act 60 Individual Resident Investor, 4% track (Act 38-2026) - Wealth tax: none - Children inherit: tax-free - Living costs, family of five: €260,148 a year - EU member: no - Currency: USD - Capital: San Juan ## Tax on investments, inheritance and wealth Ordinary Puerto Rico residents pay 15% on long-term gains and dividends, and there is no local estate, gift or wealth tax. The draw is the Act 60 resident investor decree: 0% on dividends, interest and post-move gains until 2035 for applications filed by 31 Dec 2026; Act 38-2026 sets 4% until 2055 for later applicants. For US citizens, federal income tax still reaches non-Puerto Rico-source income such as foreign dividends, and US federal estate and gift tax still applies. - **Ordinary tax residence (no decree)**: Residents are taxed on worldwide income. Long-term capital gains 15%, dividends 15%, progressive rates up to 33% plus a 5% surtax above USD 500,000 on other income. - **Act 60 Individual Resident Investor (application filed by 31 Dec 2026)**: Decree under Chapter 2 of Act 60-2019 (ex Act 22): 0% Puerto Rico tax on interest, dividends and on capital gains accrued after becoming resident, until 31 Dec 2035. Pre-move gains: 5% if recognised 10+ years after moving, otherwise ordinary rules. - **Act 60 Individual Resident Investor, 4% track (Act 38-2026)**: For applications filed from 1 Jan 2027 (or by election for earlier applicants): 4% fixed Puerto Rico rate on interest, dividends and post-move capital gains until 31 Dec 2055. ## Income tax Progressive Puerto Rico income tax of 0% to USD 9,000, then 7%, 14%, 25% and 33% above USD 61,500, with the total tax equal to 95% of the computed amount (92% for gross income up to USD 100,000). Employees pay US FICA of 7.65% (self-employed 15.3%). ## Inheritance law and trusts Puerto Rico has forced heirship: under the 2020 Civil Code half the estate is reserved for forced heirs, and the surviving spouse is now one of them. The other half is free. Puerto Rico has its own Trust Act (2012). The Hague Trusts Convention is not in force for the United States. ## Daily life (0-100, higher is better) - Safety and personal security: 31 - Political and institutional stability: 52 - Legal system and property rights: 60 - Healthcare quality and access: 85 - Infrastructure and connectivity: 87 - Cost of living and housing: 66 - Business opportunities and economy: 67 ## Research notes ### Puerto Rico — family-office tax dossier Last reviewed: 2026-10-15 Tax year: 2026 Reviewer: research agent (Claude), unreviewed by a tax adviser #### Summary Ordinary Puerto Rico residents pay 15% on long-term gains and dividends, and there is no local estate, gift or wealth tax. The draw is the Act 60 resident investor decree: 0% on dividends, interest and post-move gains until 2035 for applications filed by 31 Dec 2026; Act 38-2026 sets 4% until 2055 for later applicants. For US citizens, federal income tax still reaches non-Puerto Rico-source income such as foreign dividends, and US federal estate and gift tax still applies. #### Residence and eligibility Domicile test with 180-day presumption (Deloitte Puerto Rico Highlights 2026). US federal bona fide residence (IRC §937) is separate and determines the §933 exclusion. Non-US citizens need US immigration status. #### Capital gains Standard: 15% long-term (>1 year), PwC reviewed 7 Aug 2026; JSON 0.15 for all classes. Act 60 IRI decree (Incentives Code §2022.01(a)): 0% on post-move gains until 31 Dec 2035; pre-move gains 5% if recognised after 10 years. Act 38-2026 (signed 10 Mar 2026): applications from 1 Jan 2027 get 4% until 2055 (§2022.01(b)); existing holders may elect the 2055/4% track. JSON special regimes act60_iri_0pct (0) and act60_iri_4pct (0.04). Real estate left null. #### Dividends Standard flat 15%. Act 60: 0% (filed by 31 Dec 2026) or 4% (filed from 2027). For US citizens, foreign/US dividends remain US-taxed (not PR-source). #### Inheritance and gifts to children No Puerto Rico estate, inheritance or gift tax (Deloitte 2026). US federal estate/gift tax applies to US citizens (IRC §2209 exception only for citizenship acquired via the possession). #### Wealth tax None. Municipal property tax on historical assessed values. #### Special regimes act60_iri_0pct: application by 31 Dec 2026; no PR residence 17 Jan 2006-17 Jan 2012; home purchase within 2 years; USD 10,000 annual donation; decree to 2035. act60_iri_4pct: 6-year look-back; home owned directly and recorded; 4% to 2055. Source: DDEC Informative Bulletin 2026-004 (24 Apr 2026). Status: spring-2026 law-firm reports said FOMB endorsement was pending; see the re-check below. Re-check 2026-10-15, Act 38-2026 and the Oversight Board: the FOMB documents library lists no letter or statement on Act 38-2026 (its most recent Act 60 letters date from 2022), so no endorsement or objection could be confirmed. DDEC Informative Bulletin 2026-004 (24 Apr 2026) treats the Act as in force. The 4% track stays at medium confidence. #### Company taxation (kept separate from personal tax) CIT 18.5% + surcharge up to 19%; Act 60 export services incentives (4%) not researched. #### Cost of living notes City: San Juan (Dorado / Condado). - Prime rent: USD 5,235 a month, the Puerto Rico-wide average for 4+ bedroom condos/townhouses (Global Property Guide, Q3 2026). Condado-Miramar 3-bedroom: USD 4,995. Dorado Beach estates not sampled; real prime family homes cost more. - International school: Baldwin School of Puerto Rico, grade 12, 2026-27: tuition USD 20,017 + enrollment USD 400 + technology USD 500 + class USD 250 = USD 21,167 per child. Excluded: USD 3,000 building fee per household per year, USD 4,000 one-time household fee. - Price per m2, health insurance, housekeeper: not sourced. #### Open questions - Family rent (USD 5,235) is an island-wide condo/townhouse average and was not replaced: only individual Dorado/Guaynabo 4-bedroom houses were seen in search results (USD 3,600-4,900 in Dorado del Mar/Paseo del Mar, USD 4,200 in Mansiones Reales, USD 9,500 in Garden Hills Estates), and Zillow, Trulia, Realtor, RentHop and Maxlife pages returned 403 or were off the market, so no median of several current listings could be opened; it may understate a Garden Hills/Dorado family house. - FOMB endorsement status of Act 38-2026: no Board letter or statement on the Act found in its documents library (checked 2026-10-15); DDEC applies it as in force. - Tax position of non-US citizens (EU/OTHER) living in Puerto Rico under US immigration status (green card makes them US tax residents) not modelled; Act 60 is designed for US citizens. - Source rules for pre-move gains (IRC §937 regulations) not re-verified in this pass. - [standard/capital_gains] Interaction with the alternate basic tax for very large gains not checked. - [standard/dividends] Whether foreign (non-PR) dividends qualify for the 15% flat rate or are taxed at ordinary rates was not confirmed in a primary source. - [standard/inheritance] Puerto Rico statute repealing the local estate and gift tax was not opened; relies on Deloitte. - [act60_iri_0pct/capital_gains] Whether the exemption extends to gains on Puerto Rico real estate and on private business interests in all cases. - [act60_iri_4pct/capital_gains] FOMB position on Act 38-2026 not found: no Board letter on the Act in its documents library as of 15 Oct 2026; DDEC treats the Act as in force (Bulletin 2026-004). A PROMESA s.204 challenge remains a theoretical risk. - [act60_iri_4pct/dividends] Whether foreign tax credits are available against the 4% rate. #### Sources - Deloitte International Tax: Puerto Rico Highlights 2026: https://www.deloitte.com/content/dam/assets-shared/docs/services/tax/2026/dttl-tax-puertoricohighlights-2026.pdf - PwC Worldwide Tax Summaries: Puerto Rico, Individual - Income determination: https://taxsummaries.pwc.com/puerto-rico/individual/income-determination - PwC Worldwide Tax Summaries: Puerto Rico, Individual - Other taxes: https://taxsummaries.pwc.com/puerto-rico/individual/other-taxes - 26 U.S. Code § 2209 - Certain residents of possessions considered nonresidents not citizens: https://www.law.cornell.edu/uscode/text/26/2209 - DDEC Informative Bulletin No. 2026-004: Clarifications and FAQs regarding amendments enacted under Act No. 38-2026: https://docs.pr.gov/files/DDEC/Aviso%20Pu%CC%81blico/Informative%20Bulletin%20DDEC%20NO.%202026-004%20Final.pdf - Puerto Rico individual resident investor tax benefits extended through 2055: https://www.dlapiper.com/insights/publications/2026/03/puerto-rico-individual-resident-investor-tax-benefits-extended-through-2055 - Puerto Rico Extends Act 60 Resident Investor Program to 2055 and Introduces New 4% Tax Regime: https://www.procopio.com/resource/puerto-rico-extends-act-60-resident-investor-program - Act 60 Amendment 2026: Act 38-2026 Explained: https://lawyerinpr.com/act-60-amendment-2026-act-38-2026-filing-deadline/ - 26 U.S. Code § 933 - Income from sources within Puerto Rico: https://www.law.cornell.edu/uscode/text/26/933 - Global Property Guide: Puerto Rico rental yields (Q3 2026): https://www.globalpropertyguide.com/latin-america/puerto-rico/rental-yields - Baldwin School of Puerto Rico: Tuition and registration fees, 2026-27 academic year (PDF linked from the school's Tuition & Fees page): https://drive.google.com/file/d/1NDj6x-PAu8QWuszaX49_rImzLPBtok-7/view - Financial Oversight and Management Board for Puerto Rico: Documents library: https://oversightboard.pr.gov/documents/ #### Change log - 2026-10-15: initial research. - 2026-10-15: added cost of living (Global Property Guide rent, Baldwin School 2026-27 fees); checked the FOMB documents library for Act 38-2026 (nothing found) and updated the open question. - 2026-10-15: family rent re-checked against the upper-middle-class standard: kept. - 2026-10-15: family rent re-checked a second time: kept at USD 5,235; no median of several Dorado/Guaynabo listings could be opened (portals blocked), open question expanded. ## Residence and succession sources - [New PR Civil Code: successions and wills](https://www.mcvpr.com/newsroom/publications/New-PR-Civil-Code-Successions-Wills) — McConnell Valdés - [Ley 219-2012 (Ley de Fideicomisos)](https://bvirtualogp.pr.gov/ogp/Bvirtual/leyesreferencia/PDF/Fideicomisos/219-2012.pdf) — Government of Puerto Rico - [New PR Trust Act](https://www.mcvpr.com/media/publication/164_New_PR_Trust_Act.pdf) — McConnell Valdés - [HCCH status table: 1985 Trusts Convention](https://www.hcch.net/en/instruments/conventions/status-table/?cid=59) — Hague Conference on Private International Law