2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 15 - Puerto Rico Industrial Incentives Generally (§§ 10001 — 10855) › PART III - Other Tax Incentives (§§ 10401 — 10855) › Chapter 956 - Transition of the Program Promotion of Housing Act (§§ 10721 — 10728) › § 10722 - Special tax to any individual, estate, corporation, partnership or trust on net long-term capital gain

(a) Gain from the sale of principal residence carried out after November 1st, 2011.—
(1) The total net long-term capital gain generated from a sale carried out after November 1st, 2011 of a principal residence shall be fully exempt from Puerto Rico's income taxes, including the alternate basic tax and the minimum alternative tax provided in the Code, regardless of the date or circumstances under which it was acquired.
(b) Gain from the sale of qualified property other than a principal residence carried out after November 1, 2011 and on or before June 13, 2013.—
(1) The total net long-term capital gain generated from a sale carried out after November 1, 2011, but on or before June 30, 2013, of a qualified property other than a principal residence shall be fully exempt from Puerto Rico income taxes, including the alternate basic tax and the alternative minimum tax provided in the Code.
(c) Gain from the sale of property acquired after November 1, 2011, but on or before June 30, 2013, other than a principal residence.—
(1) The total net long-term capital gain generated from the sale of a newly-built property acquired by the seller after November 1, 2011, but on or before June 30, 2013, shall be fully exempt from Puerto Rico income taxes, including the alternate base tax and the alternative minimum tax provided in the Code.
(2) The net long-term capital gain generated from the sale of a newly-built property acquired by the seller after November 1, 2011, but on or before June 30, 2013, shall have fifty percent (50%) exemption from Puerto Rico income taxes, including the alternate base tax and the alternative minimum tax provided in the Code. The remaining fifty percent (50%) of the net long-term capital gain shall be subject to taxation, in accordance with the applicable provisions of the Code.
(3) Certification of the Department of the Treasury.— Once the information return related to the sale of a newly-built or qualified property is received, the Department of the Treasury shall certify in writing on or before thirty (30) days to the purchaser that the real property is a newly-built or qualified property and that the net long-term capital gain generated from the sale of such property shall be exempt, as applicable, from Puerto Rico's income taxes. The taxpayer shall include in the income tax return corresponding to the year of the sale a copy of the certification issued by the Department of the Treasury.
(d) Gains from the sales of eligible housing.—
(1) The total net long-term capital gain generated by the sale of eligible housing shall be exempt from the payment of the alternate base tax and the alternative minimum tax provided in the Code when such eligible housing is acquired by the seller or a qualified institutional investor as of July 1st, 2013, but on or before December 31st, 2017. It is hereby provided that this exemption shall likewise apply to an acquirer who purchases an eligible housing unit from a qualified institutional investor, provided that it is the first sale made by the Investor after the his initial acquisition.
(e) General provisions applicable to this section.—
(1) In order to be entitled to claim the net long-term capital gain exemption provided in this section, the taxpayer shall declare such gain as totally or partially exempt, as the case may be, in the income tax return corresponding to the year in which said gain was generated. Moreover, in the case of a net long-term capital gain generated from the sale of a newly-built or qualified property, the taxpayer shall include in the income tax return corresponding to the year of the sale a copy of the certification issued by the Department of the Treasury, pursuant to the provisions of this section.
(2) Except as provided in subsection (a)(1) of this section and subsections (g) and (h) of § 10721 of this title, the benefits provided under this chapter shall only be available to the first seller and the corresponding first purchaser of each newly-built or qualified property unit, and shall not apply with respect to any purchaser in any subsequent transfer, even if it occurs prior to June 30, 2013.
(3) The payments related to the sale of a real property whose net long-term capital gain is subject to the exemption provided in this section, shall not be subject to withholding of income taxes at source.
(4) The benefits of this section shall apply to eligible taxpayers regardless of whether they are residents or non-residents of Puerto Rico.
(5) The benefits of this section shall not apply if the assignor of the real property covered hereunder is a person related to the acquirer of such real property. For these purposes, it shall be deemed that the assignor of the real property is a related person if losses between the assignor and the acquirer would not be allowed under the Code.
History —Nov. 1, 2011, No. 216, § 3; July 22, 2013, No. 68, § 2; Dec. 21, 2012, No. 303, § 2; Nov. 17, 2015, No. 187, § 98.