A summary of additional laws approved during the year 2025 that will apply to the tax returns for the year beginning on January 1, 2025, is as follows:

 ACT 66-2025

Act 66-2025 amends Act 132-2010, as amended, the Real Property Market Stimulus Act.

Tax Exemption for Residential Rental Income

Act 66-2025 extends the tax exemption applicable to income from residential rentals for an additional 15‑year period, resulting in a new expiration date of December 31, 2040. Furthermore, it provides that the exemption does not relieve an eligible landlord from their duty to pay municipal license tax and file the volume of business declaration required in the Puerto Rico Municipal Code (“CMUN”).

ACT 67-2025

Act 67-2025 amends the Puerto Rico Incentives Code (“CINC”).

Bona Fide Farmer Certification

Act 67-2025 adds the “Bona Fide Farmer Certification” to the CINC. This certification is to be issued by the Secretary of Agriculture certifying that, during the applicable year, the farmer was actively engaged in an activity qualifying as an agro-industrial business.

The Secretary of Agriculture is responsible for issuing this Certification every four (4) years, once the agro-industrial business demonstrates, to the satisfaction of the Secretary of Agriculture, that it has met the requirements established under the CINC, as well as other in other applicable provisions of the CINC and its Regulations.

The Bona Fide Farmer Certification grants the same tax benefits available to a Bona Fide Farmer.

ACT 76-2025

Act 76-2025 amends the Act 168-1968 as amended, the Hospital Tax Exemption Act.

Hospital Tax Exemption

Act 76-2025 extends the tax exemption period for hospital operators for an additional period of ten (10) years following the expiration of their current exemption. This additional ten (10) year period will begin once the required application is submitted to the Secretary of the Treasury.

ACT 90-2025

Act 90-2025 amends the CMUN.

Volume of Business Declaration Extension

Act 90-2025 requires the Directors of Finance of the Municipalities to grant taxpayers with tax exemption grants under the CINC, or under prior or subsequent laws, an automatic extension of no less than eight (8) months.

ACT 177-2025

Act 177-2025 amends the CRI.

Achieving Better Living Experience Accounts (ABLE)

Act 177-2025 amends the Puerto Rico Internal Revenue Code of 2011, as amended (“CRI”), to establish ABLE accounts. An ABLE account is a savings account created exclusively to pay qualified disability expenses of an eligible individual.  An “eligible individual” is a person receiving benefits under Title II or Title XVI of the Social Security Act due to blindness or a disability that began before forty-six (46) years of age; or who submits a disability certification in accordance with regulations, administrative determinations, circular letters, or general information bulletins issued by the Secretary of the Treasury.

Contributions to an ABLE account may be made during a tax year up to a maximum annual amount of five thousand ($5,000) dollars per designated beneficiary. Amounts paid or distributed from an ABLE account that are used exclusively for qualified disability expenses of any beneficiary, or that constitutes a transfer contribution, are excluded from gross income.

ACT 178-2025

Act 178-2025 amends the CRI.

Education Savings Account

Act 178-2025 increases the maximum annual deductible contribution to an Education Savings Account from five hundred ($500) dollars to one thousand ($1,000) dollars per beneficiary.

ACT 179-2025

Act 179-2025 amends the CRI.

Individual Retirement Account (IRA)

Act 179-2025 increases the maximum deductible contribution to IRAs in Puerto Rico to match the limits established under the U.S. Internal Revenue Code, as amended. As a result, for tax year 2025, the maximum deductible contribution increased from $5,000 to $7,000 for individual taxpayers, and from $10,000 to $14,000 for married taxpayers filing jointly.

ACT 180-2025

Act 180-2025 amends the CINC.

Capital Gain on Sale of the Principal Residence

Act 180-2025 amends CINC to exempt from Puerto Rico income tax and the alternative basic tax the gain realized from the sale of real property located in Puerto Rico that constitutes the seller’s principal residence. To qualify for the exemption, the seller must not be a beneficiary of incentives under the CINC, and the property sold must have been continuously occupied by the seller or the seller’s family for at least two (2) years during the five (5) years preceding to the date of sale.

ATBA’’s comments

Given the scope and importance of these laws, we recommend reviewing the changes and determining the impact on the tax planning and compliance strategies.

At ATBA, our experienced advisors are eager to assist with these and other tax matters.