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) › § 30213 - Tax credit program for the acquisition of newly-built housing

(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 a newly-built housing with the endorsement of the Secretary by a certification of credit issued under this section.
(3) Developer.— Means any natural or juridical person duly licensed as developer by the Department of Consumers’ Affairs, engaged in the construction business as entrepreneur or chief of marketing, design, sale, construction of housing developments and projects, whether single or multi-story type; Provided, That solely for purposes of this section, the term “developer” shall also include such financial institutions that by virtue of a judicial or extrajudicial proceeding, or by agreement of dation in payment or similar transaction become the successor in interest of a developer.
(4) Pre-designed home company.— Means any juridical entity registered in the Department of State of the Government of Puerto Rico to do business in Puerto Rico, engaged in the sale of one-story, two-story, or elevated pre-designed homes, whose plans have been approved by the Administration of Regulations and Permits (ARPE, Spanish acronym) on or before November 30, 2007.
(5) In the case of a financial institution holding a credit approved under this section, at the close of any of its taxable years beginning after December 31, 2007, and which is not able to use the tax credit provided by this section against its tax liability, if any, and has not assigned, sold or transferred the same, it may request such credit as a refundable credit within the effective term of the certificate of credit granting the right to such credit, following the procedures and rules established by the Secretary of the Treasury through regulations or circular letter. Notwithstanding the foregoing, the Secretary of the Treasury shall not issue refunds under the provisions of this clause before January 1st, 2011, unless the credits have been duly requested on or before March 9, 2009. A refund requested under this provision 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”.
(6) Newly-built housing inventory.— The inventory of structures suitable for family living kept by the Department of Consumer Affairs for purposes of the credit provided for in this section, wherein the information required by this section has been included by any Developer interested in qualifying any of such structures.
(7) sales price of the units stated in clause (4);
(8) Qualified residence.— Means a property that constitutes the main residence, acquired by an individual between December 14, 2007 and December 31, 2008, provided, that for these purposes a main residence shall mean a newly-built housing that has been owned or used by the acquirer as his/her main residence for a term of not less than three (3) years from its acquisition; Provided, That if the acquirer fails to comply with the term herein provided, the credit originally granted shall not be invalidated.
(9) Newly-built housing.—
(A) Means any housing unit included in the newly-built housing inventory that has not been previously occupied, and which has a sales price not exceeding two hundred twenty-five (225) percent of the limit set by the Federal Housing Administration (FHA) for the corresponding location, and that also has all the endorsements, approvals, and permits required by the applicable laws and regulations, and which is directly acquired from a developer between December 14, 2007 and December 31, 2008 through a sale for which the financing of the sales price by a financial institution is required.
(B) Also, it means any pre-designed home model whose plan has been approved by the Administration of Regulations and Permits (ARPE, Spanish acronym) on or before March 31st, 2008, or whose permanent loan has been approved after such date, and which is suitable for family living, and has all the endorsements, approvals, and permits required by the applicable laws and regulations; and which is acquired directly from a pre-designed home company by an acquirer on or before December 31st, 2008, requiring financing by a financial institution for the acquisition thereof; Provided, further, That if such property may be eligible for the benefits provided in this subtitle it shall be completed together with the request for the corresponding use permit and a sworn certification of completion of works on or before March 31st, 2009.
(b) Newly-built housing acquisition tax credit grant.— The Secretary shall grant a credit against the income tax imposed in §§ 30041 et seq. of this title, including the estimated tax, subject to the provisions of this section and the regulations promulgated by the Secretary, as follows:
(1) General rule.— In the case of an individual who acquires newly-built housing, a credit shall be granted equal to ten percent (10%) of the sales price of such newly-built housing up to a maximum of fifteen thousand dollars ($15,000). The credit herein provided shall be issued through three (3) separate certificates of credit, as provided below:
(A) First installment.— In such cases in which the credit is approved in the maximum amount of fifteen thousand dollars ($15,000), the certificate attesting the first installment shall be issued in the amount of five thousand two hundred dollars ($5,200). If the credit is approved in an amount lower than the maximum amount of fifteen thousand dollars ($15,000), the certificate attesting the first installment shall be issued in an amount in the same proportion as the one herein stated.
(B) Second installment.— In such cases in which the credit is approved for the maximum amount of fifteen thousand dollars ($15,000), the certificate attesting the second installment shall be issued for the amount of five thousand five hundred dollars ($5,500). If the credit is approved for an amount lower than the maximum amount of fifteen thousand dollars ($15,000), the certificate attesting the second installment shall be issued for a sum with the same proportion as the one herein stated.
(C) Third installment.— In such cases in which the credit is approved for the maximum amount of fifteen thousand dollars ($15,000), the certificate attesting the third installment shall be issued for the amount of five thousand eight hundred dollars ($5,800). If the credit is approved for an amount lower than the maximum amount of fifteen thousand dollars ($15,000), the certificate attesting the third installment shall be issued for a sum with the same proportion as the one herein stated.
(2) Qualified residence acquisition.— In case an individual acquires a qualified residence, the credit shall be equal to twenty percent (20%) of the sales price, up to a maximum amount of twenty-five thousand dollars ($25,000).
The credit herein provided shall be issued through three (3) separate certificates of credit, as provided below:
(A) First installment.— In such cases in which the credit is approved in the maximum amount of twenty-five thousand dollars ($25,000), the certificate attesting the first installment shall be issued in the amount of eight thousand eight hundred dollars ($8,800). If the credit is approved in an amount lower than the maximum amount of twenty-five thousand dollars ($25,000), the certificate attesting the first installment shall be issued in an amount in the same proportion as the one herein stated.
(B) Second installment.— In such cases in which the credit is approved for the maximum amount of twenty-five thousand dollars ($25,000), the certificate attesting the second installment shall be issued for the amount of nine thousand two hundred dollars ($9,200). If the credit is approved for an amount lower than the maximum amount of twenty-five thousand dollars ($25,000), the certificate attesting the second installment shall be issued for a sum with the same proportion as the one herein stated.
(C) Third installment.— In such cases in which the credit is approved for the maximum amount of twenty-five thousand dollars ($25,000), the certificate attesting the third installment shall be issued for the amount of nine thousand six hundred dollars ($9,600). If the credit is approved for an amount lower than the maximum amount of twenty-five thousand dollars ($25,000), the certificate attesting the third installment shall be issued for a sum with the same proportion as the one herein stated.
(3) To be entitled to the credit herein provided, the balance of principal of the acquirer’s obligation to acquire the newly-built housing shall be credited in an amount equal to the amount of tax credit granted.
(4) Under no circumstances an individual may claim more than twice the benefit of the tax credit provided in this section and in § 30214 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.
(5) Financing required sale.— 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.
(6) 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:
(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 (2) 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.
(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 newly-built 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) in case the newly-built housing is a qualified residence.
(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 thirty (30) 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 credit shall be deemed to be granted.
(d) Availability of credit.— The credit provided in this section shall be available to 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 first 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.
(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 entitled 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 duly requested refunds 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 or 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, 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 a qualified residence who fails to comply with the three (3)-year term of ownership and use thereof, pursuant to subsection (a)(8) of this section and its equivalent under the Puerto Rico Internal Revenue Code of 1994, the acquirer shall be responsible to the Secretary for a special surtax equal to the originally granted credit. To such effects, a clause shall be added in the deed of sale for the acquisition of a qualified residence pursuant to this section.
(h) Maximum credit cap.— The aggregate maximum amount of tax credits available to be distributed under this section shall be two hundred twenty million dollars ($220,000,000).
(i) Housing inventory registration requirement.— Any developer interested in one (1) or more units of a residential project, to be eligible for the credit provided in this section, shall submit to the Department of Consumer’s Affairs an inventory of the units to be qualified, including the following information:
(1) Identification of the consultation for the project in question;
(2) name of the project;
(3) total units approved;
(4) total units sold as of October 31, 2007;
(5) total units completed that have the endorsements, approvals, and permits required by the applicable laws and regulations, but not sold as of October 31, 2007;
(6) total units started but not completed as of October 31, 2007;
(7) sales price of the units stated in clause (4);
(8) the sales price of the units stated in clauses (5) and (6). The sales price for the purpose of these clauses shall not exceed the price that the developer has had in effect as of October 31, 2007 as the sales price of a completed unit, taking into consideration that a reduction equivalent to the fair market value of any goods, services, or discounts in effect as of the date in which it has been used as an offer to the acquirer to incentivize the sale thereof, such as the inclusion of home appliances, landscaping design or gardening offer, club membership, maintenance fee exemption, expense reimbursement, and any other similar offer.
(9) Copy of every promotion that the developer has used as an offer to the acquirer to incentivize the purchase of the housing as of October 31, 2007.
(10) Certification of solar water heater installation on each housing that has its own private roof.
History —Jan. 31, 2011, No. 1, § 1052.03, retroactive to Jan. 1, 2011; Dec. 10, 2011, No. 232, § 53.