2023 Laws of Puerto Rico › TITLE THIRTEEN - Taxation and Finance (§§ 1 — 33423) › Subtitle 17 - Internal Revenue Code of 2011 (§§ 30001 — 33423) › PART II - Income Taxes (§§ 30041 — 30622) › Chapter 1007 - Credits Against Tax (§§ 30201 — 30230) › Subchapter B - Refundable Credits (§§ 30211 — 30214) › § 30214 - Existing housing acquisition tax credit program

(a) Definitions.— For purposes of this section, the following terms, words, and phrases shall have the general meaning stated below, except when the context clearly indicates otherwise:
(1) Certification or certificate of credit.— Means the written grant issued pursuant to the provisions of this section whereby the Secretary certifies that the credit is available to be claimed.
(2) Credit.— Means the tax credit for the acquisition, after December 14, 2007, of an existing housing with the endorsement of the Secretary by a certification of credit issued under this section.
(3) Financial institution.— Shall have the meaning provided in § 30127(f)(4) of this title, and includes any entity authorized to grant mortgage financing.
(4) Sales price.— Means the acquisition price of the existing housing, as stated in the public deed. The same shall not include attorney fees, internal revenue stamps, or other fees or charges in connection with the financing for the acquisition of the housing.
(5) Existing housing.— Means property included in the inventory kept by the Department of Consumers’ Affairs for purposes of this section, that has all permits, endorsements, and approvals required by the applicable laws and regulations, which constitutes the main residence acquired by an individual, on or before December 31st, 2008, through a sale for which the financing of the sales price by a financial institution is required; provided, that, for these purposes, a main residence shall mean an existing housing owned or used by the acquirer as his main residence for a term of not less than three (3) years after the acquisition thereof; provided, that if the acquirer fails to comply with the term herein provided the credit originally granted shall not be invalidated.
(6) Sale for which financing is required.— For the purpose of this section, the phrase “sale for which financing is required”, except as provided below, shall mean that the promissory note attesting the loan from the financial institution shall never be higher than the sales price of the housing minus the credit requested pursuant to the provisions of this section, nor lower than two hundred twenty-five percent (225%) of the total amount of the tax credit for which the individual is eligible.
(A) Loans under the Federal Housing Administration (FHA).— In the case of FHA loans, only for the amount of the mortgage insurance premium granted by the FHA. Furthermore, in the case of the FHA’s Rehabilitation Mortgage Insurance Program (FHA 203k), the promissory note attesting the loan from the financial institution may be up to one hundred ten percent (110%) of the appraisal price, as allowed under the FHA 203K program prohibiting the use of the loan to turn the residence into a unit of two or more housing units.
(B) Loans under Rural Economic and Community Development Formerly Farmer’s Home Administration (Farmer’s Home Rural Development).— In the case of loans granted under the guaranty program (regular program), up to the appraisal price, as allowed under the Farmer’s Home Rural Development program.
(C) Loans for veterans under Veterans Affairs (VA).— In the case of loans granted under the VA Funding Fee program, up to the appraisal price, as allowed under the VA.
(D) Mortgage guaranty insurance corporation loans.— In the case of mortgage guaranty insurance loans granted, only for the financed amount of the mortgage guaranty insurance loan.
In the instances described below, the promissory note attesting the loan from the financial institution may be higher than the sales price of the housing minus the credit requested pursuant to the provisions of this section:
(b) Existing housing acquisition tax credit grant.— In the case of an individual who acquires an existing housing, a credit shall be granted equal to ten percent (10%) of the sales price of such existing housing, up to a maximum of ten thousand dollars ($10,000).
(1) General rule.— In the case of an individual who acquires an existing housing, a credit equal to ten percent (10%) of the sales of such existing housing shall be granted up to a maximum of ten thousand dollars ($10,000).
(A) The credit herein provided shall be issued through three (3) separate certificates of credit, as provided below:
(i) First installment.— In such cases in which the credit is approved in the maximum amount of ten thousand dollars ($10,000), the certificate attesting the first installment shall be issued in the amount of three thousand five hundred dollars ($3,500). If the credit is approved in an amount lower than the maximum amount of ten thousand dollars ($10,000), the certificate attesting the first installment shall be issued in an amount in the same proportion as the one herein stated.
(ii) Second installment.— In such cases in which the credit is approved for the maximum amount of ten thousand dollars ($10,000), the certificate attesting the second installment shall be issued for the amount of three thousand six hundred dollars ($3,600). If the credit is approved for an amount lower than the maximum amount of ten thousand dollars ($10,000), the certificate attesting the second installment shall be issued for a sum with the same proportion as the one herein stated.
(iii) Third installment.— In such cases in which the credit is approved for the maximum amount of ten thousand dollars ($10,000), the certificate attesting the third installment shall be issued for the amount of three thousand eight hundred dollars ($3,800). If the credit is approved for an amount lower than the maximum amount of ten thousand dollars ($10,000), the certificate attesting the third installment shall be issued for a sum with the same proportion as the one herein stated.
(2) To be entitled to the credit herein provided, the balance of the principal of the acquirer’s liability to acquire the existing housing shall be credited in an amount equal to the amount of tax credit granted.
(3) Under no circumstances an individual may claim more than twice the benefit of the tax credit provided in this section and in § 30213 of this title. In the case of an individual who claims the benefit of both sections, the two (2)-transaction limit shall apply in the aggregate.
(c) Request for credit.— Any financial institution interested in obtaining credit under this section shall submit to the Secretary the following information:
(1) In the case of the credits provided in subsection (b) of this section:
(A) Identification number of the housing in the existing housing inventory;
(B) a copy of the deed of sale;
(C) a copy of the deed of mortgage whereby the financing of such housing is guaranteed, and
(D) copy of the request for tax exemption for purposes of the Municipal Revenue Collections Center (CRIM, Spanish Acronym).
(2) In addition to the requirements established in clause (1), the financial institution shall comply with the terms, documents, and information required by the Secretary through regulations or any official communication issued by him/her to such effects.
(3) The Secretary shall approve or deny the credits within twenty (20) calendar days following the date in which all the documents necessary to grant the credit provided in this section have been filed. If the Secretary fails to deny the request for credit within the above provided term, the credits shall be deemed to be granted.
(d) Availability of credit.— The credit provided in this section shall be available to be used by the person who is entitled thereto, against the income tax provided by §§ 30041 et seq. of this title, including the estimated tax, according to the effective term of each certification of credit issued by the Secretary. The certifications of credit to be issued pursuant to this section shall be used in three (3) installments to be claimed during a period of three (3) consecutive taxable years from the taxable years starting after December 31, 2007. For such purposes, the term to use the credits granted pursuant to this section under the second installment shall be between January 1, 2008 and June 30, 2009; the term to use the credits granted pursuant to this section under the second installment shall be between July 1, 2009 and June 30, 2010; the term to use the credits granted pursuant to this section under the third installment shall be between July 1, 2010 and June 30, 2011.
(e) Credit assignment, sale or transfer.—
(1) The credit granted by this section may be totally assigned, sold, or otherwise transferred by a financial institution.
(2) Notice.— The financial institution or person interested in the assignment, sale, or transfer of the credit as well as the acquirer of the credit shall notify the Secretary of the assignment, sale, or transfer in accordance with the terms and conditions prescribed by the Secretary to such effects.
(3) The money or the value of the property received in exchange for the credit shall be tax-exempt under the Code up to an amount which is equal to the amount of the credit assigned, sold, or transferred.
(4) When the tax credit granted by this section is assigned sold, or transferred, the difference between the amount of the credit and the amount paid for the same shall not be treated as income for the acquirer of the credit.
(5) In the case of a financial institution that holds a credit granted under this section at the close of any of its taxable years starting after December 31, 2007, and is not able to use such credit against its tax liability, if any, and has not assigned, sold, or transferred such credit, the institution may request such credit as a refundable credit within the effective term of the certificate of credit that entitles it thereto, following the procedures and rules established by the Secretary through regulations or circular letter. Notwithstanding the foregoing, the Secretary shall not issue refunds under the provisions of this clause before January 1, 2011, unless the same have been duly requested not later than March 9, 2009. A refund requested under these provisions shall not be subject to payment of interests nor to the provisions of subsection (j) of § 283h of Title 3, known as the “Accounting Act of the Government of Puerto Rico”. The refunds duly requested under the provisions of this clause shall be issued by the Secretary at a maximum ratio of twenty million dollars ($20,000,000) per fiscal year, starting in fiscal year 2011-2012. In no case the total amount of the refunds issued under this section, and under § 30214 of this title shall exceed the maximum amount of twenty million dollars ($20,000,000) per fiscal year.
(f) Credit denial and revocation.—
(1) Denial.— The Secretary may deny any request filed under this section when he/she determines in his/her discretion that a credit grant is not warranted, taking into consideration the facts presented, and the conditions and requirements provided in this section and the regulations adopted thereunder.
(2) Revocation.— The credits granted under this section shall be irrevocable.
(g) Special surtax.— In the case of an acquirer of an existing housing who fails to comply with the three (3)-year term of ownership and use thereof, pursuant to this section, the acquirer shall be responsible to the Secretary for a special surtax equal to the originally granted credit. A clause shall be added in the deed of sale for the acquisition of an existing housing pursuant to this section.
(h) Maximum credit cap.— The maximum amount of two hundred twenty million dollars ($220,000,000) in tax credits available to be distributed under § 30213 of this title, shall be reduced by the total amount of tax credits available under this section for the acquisition of a maximum of three thousand five hundred (3,500) existing housing units. In no case the total amount of tax credits available under § 30213 of this title and this section, shall exceed the amount of two hundred twenty million dollars ($220,000,000).
(i) Housing inventory registration requirement.— Any individual, estate, financial institution, or any other juridical person interested in qualifying an existing residence for the credit provided in this section shall resort to a financial institution in order for the latter to report to the Department of Consumers’ Affairs the sales price offered for such housing and obtain a certification from the Department of Consumers’ Affairs establishing that such existing housing is one of the three thousand five hundred (3,500) housing units that qualifies for the credit provided in this section.
History —Jan. 31, 2011, No. 1, § 1052.04, retroactive to Jan. 1, 2011; Dec. 10, 2011, No. 232, § 54.