The Act 60 update for 2025—recently approved by the House of Representatives but not yet enacted into law—introduces a 4% fixed rate on capital gains, interest, and dividends for new Act 60 applicants starting in 2026. It also extends the benefits of Act 60 through 2055—previously, these incentives were set to expire in 2035. Until now, these investment categories were fully exempt under the current Incentives Code. By implementing this modest adjustment and extending the timeline, Puerto Rico sends a clear message: the island is committed to reform, transparency, and long-term stability. This update clarifies the Puerto Rico capital gains tax Act 60 policies, especially the specifics regarding the Puerto Rico Act 60 capital gains tax exemption and related tax advantages.

A few weeks ago, we published an in-depth piece when the new Act 60 update was first introduced as a legislative proposal. Since then, it has been approved by the House of Representatives and is now pending final approval by the Senate. In that article, we explored the potential consequences of the reform in greater detail. If you’d like to read that analysis, you can access it here.

Key Provisions of the Reform:

• Fixed 4% Tax: Applies to new Act 60 investors only—existing decrees remain unaffected.
• Extended Incentives Timeline: Puerto Rico Act 60 expiration date is now extended through 2055, providing long-term assurance for investors.
• Scope: The tax applies to passive income, explicitly including capital gains, interest, and dividends.
• Forecasted Revenue Impact: Estimates suggest an additional $27.8 to $60.6 million in revenue by 2027, and up to $270 million by 2037.

This change aligns with broader global tax trends, such as the international push for a 10% minimum corporate tax, while solidifying Puerto Rico’s position as one of the most attractive tax jurisdictions—reinforcing its reputation as a potential Puerto Rico tax haven (Act 60) for qualified investors.

Why This Matters for High-Net-Worth Individuals

For families and entrepreneurs considering Puerto Rico for wealth preservation and strategic relocation, the Act 60 update 2025 provides long-needed clarity. The long-term extension and fixed tax rate create a stable planning environment—especially valuable for those building complex trust structures, family offices, or multi-generational investment platforms.

Benefits of the New Framework:

• Clarity for Long-Term Planning: Predictable tax obligations help families confidently build multi-decade strategies involving trusts, estate planning, and philanthropic vehicles.
• Regulatory Certainty: An extension to 2055 signals institutional commitment to the Act 60 regime, reducing perceived risks related to abrupt policy shifts and clarifying Puerto Rico Act 60 tax incentives requirements.
• Continued Tax Advantages: Even with the 4% tax, Puerto Rico still provides substantial benefits, particularly highlighting Puerto Rico Act 60 tax benefits for US citizens and international citizens.
  • 100% exemption on Puerto Rico-sourced capital gains for current decree holders.
  • 75% exemption on property taxes.
  • Reduction of Puerto Rico corporate tax in certain cases.

Act 60 and Economic Impact

As of 2025, Act 60 has granted tax decrees to over 3,000 individuals and businesses. According to the Department of Economic Development and Commerce, the program has helped create more than 75,000 jobs and generated $650 million in government revenue since its inception​.

This reform is intended to maintain Puerto Rico’s competitiveness as a destination for strategic capital, while also enhancing public confidence in the program’s fairness and long-term economic contribution.

Investor Perspectives and Broader Implications

Industry experts have welcomed the changes. Robb Rill, founder of the Act 20/22 Society, expressed support for the reform, emphasizing the importance of extending benefits to returning Puerto Ricans and ensuring sustainable value creation for the island​. The reform package also reflects the island’s ambition to develop a modern tax code aligned with investor expectations, clear Puerto Rico Act 60 tax incentives requirements, and fiscal responsibility.

At the same time, critics argue that even a 4% tax rate is too low, calling for further alignment with global standards. Yet, the government maintains that the balance achieved by this bill ensures competitiveness without sacrificing critical revenue.

How This Affects Your Strategic Planning

If you are:

• A current Act 60 holder: Your existing Puerto Rico Act 60 capital gains tax exemption and other benefits remain unchanged.
• A future applicant: You now have clarity on your tax obligations—still highly favorable compared to global alternatives—and can clearly understand how to qualify for Act 60 in Puerto Rico.
• A family office or estate planner: The extended timeline and fixed rates clearly define Puerto Rico Act 60 eligibility requirements and provide the certainty needed to develop long-term, tax-efficient structures.

For many, the Act 60 update 2025 transforms uncertainty into opportunity. It enables investors to move forward confidently with Puerto Rico tax planning strategies that take full advantage of Act 60 incentives while factoring in the modest tax adjustment.

A Clearer Path to Opportunity

The 2025 reform of Puerto Rico’s Act 60 delivers both change and continuity. While the new 4% tax rate marks a departure from previous zero-tax treatment, it brings much-needed predictability and alignment with global fiscal norms. For high-net-worth individuals, this evolution underscores Puerto Rico’s unique position: a U.S. jurisdiction with an independent tax system, offering powerful tools for wealth preservation, business growth, and generational planning.

If you’re evaluating how recent changes to Act 60 may affect your current structure or future plans, our team can help. Contact Tiempo Capital to explore how Puerto Rico’s updated Act 60 framework could align with your long-term financial goals.

If you’re looking for more insights, you can explore our full library of articles. Click here for content related to Puerto Rico or here for in-depth guidance on financial planning.

This material is for informational purposes only and does not constitute financial, legal, tax, or investment advice. All opinions, analyses, or strategies discussed are general in nature and may not be appropriate for all individuals or situations. Readers are encouraged to consult their own advisors regarding their specific circumstances. Investments involve risk, including the potential loss of principal, and past performance is not indicative of future results.