Moving to Puerto Rico

The basics

A U.S. territory, not a foreign country

Puerto Rico is an unincorporated territory of the United States. People born here have been U.S. citizens since the Jones–Shafroth Act of March 2, 1917. If you are a U.S. citizen you can move here the way you would move to a state: no passport, no visa, no work permit. The currency is the U.S. dollar. The mail is the U.S. Postal Service. Social Security, Medicare, and the federal minimum wage apply.

The difference that surprises people is tax. Puerto Rico runs its own income-tax system through the Departamento de Hacienda. A bona fide resident generally does not pay U.S. federal income tax on Puerto Rico-source income, and pays Puerto Rico tax on it instead. Income from U.S. or foreign sources can still be on the federal return. That is section 933 of the Internal Revenue Code, and it is narrower than the slogan “no federal tax.”

Spanish and English are both official. Spanish is the language of daily life almost everywhere. English is common in hotels, many offices, and parts of the San Juan metro, and it is not a plan for the rest of the island.

Pair this page with the 2026 cost of living guide, where people actually live, and, if a tax decree is the point of the move, the 2027 Act 60 guide.

01

Becoming a bona fide resident

Under IRC sections 933 and 937, the Puerto Rico-source exclusion is for someone who is a bona fide resident of Puerto Rico for the tax year. IRS Publication 570 (2025) states the three tests. You have to meet all of them.

• 1

  Presence

  Several alternatives exist. The one people plan around is being in Puerto Rico at least 183 days during the tax year. The other versions are in Publication 570. Do not invent a hybrid.

• 2

  Tax home

  You do not have a tax home outside Puerto Rico. For most people that means the main place of business or employment is on the island.

• 3

  Closer connection

  You do not have a closer connection to the United States or to a foreign country. The IRS looks at where you actually live: home, family, car, banks, license, voter registration, clubs.

Buying a house does not make you a resident. Neither does a decree. The year you move is the awkward year: presence, tax home, and closer connection are counted on the rules for a year of change, which Publication 570 spells out. People who become or stop being bona fide residents of a U.S. territory may have to file IRS Form 8898. Read the current instructions for the income threshold and the deadline. Do not assume the form is optional because a friend skipped it.

Where income is sourced matters as much as where you sleep. Gain on assets you owned before the move can still be treated as U.S.-source. That is a conversation for your CPA, not a sentence to skim.

02

Act 60 is a contract, not a vibe

Act 60-2019, the Incentives Code, folded earlier programs into one statute, including what people still call Act 22 (individual investors) and Act 20 (export services). Benefits come through a tax decree, a contract with the government, issued by the Department of Economic Development and Commerce after an application.

Act 38-2026 changed the Resident Individual Investor rules for applications filed on or after January 1, 2027: a 4% Puerto Rico rate on specified investment income, in place of the prior 100% Puerto Rico exemption on those categories, a six-year prior-residency requirement, and a program horizon through December 31, 2055. Applications filed on or before December 31, 2026 were written against the older terms. Existing decrees are not rewritten by this page.

Export-services decrees, young-entrepreneur incentives, and the programs for physicians, manufacturing, tourism, and energy are separate applications with their own tests. A move for a job or a company is not the same project as an investor decree.

03

Rent first, almost always

Most people who move from the mainland start in the San Juan metro: Condado, Ocean Park, Isla Verde, Miramar, Guaynabo, Dorado. The west coast (Rincón, Aguadilla, Isabela) is the other cluster. The south and the east are real choices, not leftovers, and they are covered in the places-to-live guide.

There is no official 2026 table of neighborhood rents we are willing to print. Asking rents in Dorado Beach and Condado move faster than any census release, and a single islandwide median hides that spread. Rent a place you have walked through. Inventory, HOA rules, and generator etiquette are local, and a listing photo will not tell you whether the building lost power for a week last August.

If a decree will require the residence to be owned by you or a trust rather than an LLC, decide that before you sign. That rule is discussed on the Act 60 page, and it is exactly the kind of fact people get wrong at the closing table.

04

The car is a tax event

You can drive on a valid U.S. license when you arrive. Once you are a resident, you are expected to get a Puerto Rico license and register the vehicle through CESCO, the driver and vehicle system of the Departamento de Transportación y Obras Públicas (DTOP).

A car you ship from the mainland is not “already taxed, so it’s fine.” Puerto Rico charges an excise (arbitrio) on vehicles introduced into the island. The brackets for automobiles introduced after October 31, 2014 are published by Hacienda and are reproduced, with a worked example, in the cost of living guide. The taxable price is not automatically what you paid. Compare the excise plus freight with buying on the island before the container leaves Jacksonville.

Freight between the mainland and Puerto Rico moves under the Jones Act (the Merchant Marine Act of 1920): cargo between U.S. ports goes on U.S.-flag vessels. That is why some online retailers will not ship here, and why a sofa can take longer than a flight. We are not printing a percentage markup. Quotes from the carrier are the number that matters for your move.

A pet flying from the mainland is a domestic trip, not an international import. Airlines set their own health-certificate window. Check the airline and the USDA APHIS pet-travel page before you book. Do not rely on a blog’s “10 days.”

05

Power, water, and June 1

Electricity is delivered by LUMA Energy, the private operator of transmission and distribution since June 2021. Legacy generation is run by Genera PR. The base residential tariff and the fuel riders are not the same number. For October through December 2026, the all-in residential rate reported after the Energy Bureau’s quarterly review is 33.86 cents per kilowatt-hour. The breakdown, and what is base rate versus rider, is in the cost guide.

Outages are more common than in most mainland cities. A generator or rooftop solar with batteries is ordinary home equipment, not a prepper affectation. Water service is the Autoridad de Acueductos y Alcantarillados (AAA, also called PRASA). Hurricane season is June 1 through November 30. Shutters, a water plan, and insurance you have actually read belong in the first month, not the week a storm is named. The hurricane tracker has the checklist.

Banks that are FDIC-insured on the mainland keep that insurance on deposits booked in Puerto Rico. Local banks (Banco Popular, FirstBank, Oriental) and mainland banks both operate here. Bring the account you already have; open a local one once you have an address.

06

Schools, without a fake tuition table

Public schools are run by the Departamento de Educación. Instruction is mainly in Spanish. Private schools, many of them bilingual or English-medium, cluster in Condado, Guaynabo, Dorado, and parts of the metro. They set their own tuition, and several of the best-known schools, including Saint John’s School in Condado, publish the number through the admissions office rather than on a stable public rate card. We checked Saint John’s tuition page in October 2026. It does not list a figure. We are not going to invent one.

If school is the reason for the neighborhood, visit before you sign a lease. The places guide says who each town tends to fit. It does not rank schools.

07

The first 90 days

The checklist is saved in this browser only. It is not an application and it is not sent to anyone.

Sources

What this page is built on

Checked in October 2026. A later statute, ruling, or decree terms on your own contract win over this page.

• IRS Publication 570 (2025), Tax Guide for Individuals With Income From U.S. Territories. Presence, tax home, and closer connection.
• 26 U.S.C. § 933 and § 937.
• IRS Form 8898, statement for individuals who begin or end bona fide residence in a U.S. possession.
• Jones–Shafroth Act, March 2, 1917, U.S. citizenship. The statute is also cited as the Jones Act of 1917; it is not the maritime Jones Act.
• Ley 38-2026, for the 2027 investor-decree changes. Full discussion on the Act 60 guide.
• Hacienda, arbitrios on vehicles.
• FY2027 electric tariff book, filed with the Energy Bureau June 30, 2026, and El Nuevo Día, October 1, 2026, on the October–December residential rate.
• National Hurricane Center, season dates.
• Saint John’s School, tuition and fees, reviewed October 8, 2026. No public dollar figure on the page.

Photo credits

Condado Beach hero: P. Hughes, Condado Beach, San Juan, Wikimedia Commons, CC BY-SA 4.0. All photographs on PuertoRico.com are licensed photos, not AI images of real places. Credits for the whole library are on Sources.

Also read: Cost of living · Best places to live · Act 60, 2027 · Spanish phrases · Driving distances.