The 2025 reforms to Puerto Rico's Act 60 tax incentive program are creating unprecedented urgency in the luxury real estate market. High-net-worth individuals are accelerating their relocation plans to secure grandfathered tax benefits before new restrictions take effect. This rush is driving significant demand for premium properties across Dorado, Condado, and Old San Juan.
In this article, Christie's breaks down the most critical elements of the Act 60 reforms—from passive income tax increases and new residency rules to strategic investment timing and market reactions. Whether you're a current investor, a prospective buyer, or simply exploring Puerto Rico's luxury real estate opportunities, this guide provides clear insights into how the changes impact your financial planning and property decisions heading into 2025.
Key Takeaways
- The 2025 Act 60 reforms increase the passive income tax rate from 0% to 4% for new applicants, creating urgency among high-net-worth individuals to secure grandfathered benefits.
- New six-year residency restrictions ensure that Act 60 incentives are reserved for genuinely new residents, limiting access to those who have previously resided in Puerto Rico.
- Luxury real estate demand is surging in areas such as Dorado, Condado, and Old San Juan as investors rush to meet the 2025 deadline.
- Despite the reforms, Puerto Rico’s tax structure remains significantly more favorable than mainland U.S. rates, preserving its appeal for strategic wealth planning.
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