U.S. Territory

Puerto Rico

Swing · Moderate tax burden · COL index 88

B+

33%

Income Tax

Notable

Act 60 (formerly Acts 20/22) offers 0% capital gains tax and 4% corporate rate for qualifying new residents. No federal income tax on Puerto Rico-source income. Major relocation incentive for high earners and investors.

Puerto Rico in plain English

Worth knowing before you move to Puerto Rico

Puerto Rico is a U.S. territory with its own tax system. Residents generally do not pay federal income tax on Puerto Rico-source income, and Act 60 offers qualifying new residents a 4% corporate rate and 0% tax on certain capital gains. Local income tax rates reach 33%. Hurricane exposure is severe, the power grid remains unreliable after Maria in 2017, and cost of living is higher than the mainland South.

What Puerto Rico taxes, and what it doesn't

Puerto Rico levies a graduated income tax that tops out at 33%. A household earning $75,000 pays an effective 0.0%, about $0 a year; at $150,000 the effective rate is 0.0%. Among the 41 states that tax income, Puerto Rico has the lowest effective rate at $100,000 of income.

Property tax runs 0.83% of home value a year. The national effective rate is about 1.10%, and Puerto Rico has the 25th highest rate of the 50 states.

Written from the figures on this page. Rankings compare the 50 states. Sources and years are listed with each figure below.

Ranked lists

State Profile

60/100

Puerto Rico will change its laws. We'll email you when it does.

One email when Puerto Rico changes a tax, gun, cannabis or abortion law. Unsubscribe in one click.

Taxes

Sources: state revenue departments · Tax Foundation 2026 · income-tax brackets 2026

▾

Income Tax

PR has its own income tax up to 33%. However, bona fide PR residents pay NO federal income tax on PR-source income. Act 60 reduces this to 4% for qualifying businesses and 0% on capital gains.

33% top

Property Tax

0.83% / yr

Sales Tax

11.5% avg

Social Security

Exempt

Pension / IRA

Social Security benefits exempt from PR income tax

Partial

Estate Tax

Puerto Rico residents are subject to federal estate tax but not PR estate tax

None

Inheritance Tax

None

Capital Gains

Under Act 60, qualifying new residents pay 0% on capital gains accrued AFTER establishing residency. Gains accrued before moving are subject to federal rates when realized.

Not taxed

Housing & Cost of Living

Sources: Zillow · Census ACS · iii.org and state insurers 2026 · WRLURI 2018 · Census 2024 (HOA)

▾

Cost of Living Index

National avg = 100

Politics & Gun Laws

Sources: OpenElections 2024 · Giffords 2025 · state statutes

▾

2024 Presidential Vote

Swing

Gun Laws

Gun ControlB

2A LibertyD

Carry Permit

May-issue

Purchase Permit Required

Yes

Jobs & Economy

Sources: BLS QCEW 2024 · BLS JOLTS 2024 · BLS union membership 2025 · Census ACS

▾

Job Market

-0.5% job growth · 8.5% unemployment

Weak

Top Industries

GovernmentTourismHealthcare

Tech Jobs

#50 of 50

Healthcare Jobs

#50 of 50

Remote Work

12% of workers

Median Household Income

$22,000

Daily Life

Sources: American Pyrotechnics Association · state statutes 2026 · IIHS

▾

Consumer Fireworks

Check local ordinances

Restricted

Weather & Natural Risks

Sources: NOAA · NWS Storm Prediction Center · FEMA NRI

▾

Winter Severity

Avg January high: 77°F

Very Mild

Summer Heat

Moderate summers

84°F avg July

Annual Rainfall

65" / yr

Tornado Risk

Very Low

Hurricane Risk

Moderate

Wildfire Risk

Low

Flood Risk

Moderate

Natural Hazards

Sources: USGS · CDC · USDA APHIS · NOAA · FEMA NRI 2023

▾

49MODERATE danger

Category 5 hurricane territoryDengue and Zika vectorsEarthquake zone

Venomous Snakes

Moderate

Spider Hazard

Moderate

Scorpions

Moderate

Hurricane Risk

Extreme

Tornado Risk

Minimal

Wildfire Risk

Low

Earthquake Risk

High

Armadillo Leprosy Risk

Low

Danger score is a composite index. Methodology ↗

Veteran Benefits

Sources: VA.gov · Military.com state guide · Tax Foundation

▾

Veteran-Friendly Score

6.5% of state population are veterans

20/100

Property Tax Exemption

Partial exemption for service-connected disability

Disability Only

Military Retirement Pay

Taxed

Active Duty Pay

Taxed

VA Facilities Access

Adequate

Notable Benefits

Standard federal VA benefits

See your full cost of living in Puerto Rico

Housing, taxes, childcare, insurance — all estimated.

Calculate

Trending in Puerto Rico

CPAs call for local adoption of ‘TrumpAccounts’ and comprehensive tax reform - San Juan Daily Star

San Juan Daily Star · Sep 8

Extreme drought now covers 44% of Puerto Rico - ScienceDaily

ScienceDaily · Sep 4

U.S. declares drought disaster for parts of Puerto Rico as dry conditions persist - NBC News

NBC News · Aug 27

Puerto Rico Governor Says Island 'Open for Business': NYSE Content Update - Yahoo Finance

Yahoo Finance · Aug 25

SEE IT: Puerto Ricans reject 51st state push as residents fear taxes could skyrocket - Fox News

Fox News · Aug 23

What Residents Say

I want to go back to PR : r/PuertoRicoTravel

PR is significantly more expensive with everything from cars and groceries to electricity and services. Keep in mind just sales tax alone is 11 ......

reddit.com ↗

Question.. : r/PuertoRico

PR makes it easy to avoid paying taxes. According to the Department of Treasury from 2021, only 15% of income tax returns in Puerto Rico ......

reddit.com ↗

Expensive/Inflation : r/PuertoRicoTravel

Puerto Rico 11.5% over most US states. Sales Tax is P.Rico is 11%. Minimum Salary in P.Rico is like $10/hr. 40% of the 3.2million Population in ......

reddit.com ↗

Found on FB and quoting a comment: "What intrigues me is ...

The Median Household income per year in Puerto Rico is $25,096. In Puerto Rico, you pay more in taxes than in any other state in the American ......

reddit.com ↗

Another one bites the dust. : r/PuertoRico

despite more taxes and less electricity. we pay crudita, excise tax, electricity, Here $20 an hour is above the average of what people earn. In ......

reddit.com ↗

Can you live good off $21/hr in PR? : r/PuertoRico

After taxes you are looking at about $2900-3000/mth. Yes. You absolutely can. Target rent would be $800/mth. I found 100 rentals in San Juan ......

reddit.com ↗

Cost of living : r/PuertoRico

I want to go back to Puerto Rico, but I don't know how expensive the cost of living is in 2025. Can someone tell me what things are like there?...

reddit.com ↗

PR Act 60 at $450k/yr - rent a small place, no other debts

I moved to Puerto Rico and am paid via a 1099 to an act 60 PR LLC. Report PR Act 60 at $450k/yr - rent a small place, no other debts ・ the pay ......

reddit.com ↗

Puerto Rico crypto tax : r/CryptoTax

Most likely you will pay US taxes. If you are considering moving to Puerto Rico, it's important to speak with a tax advisor to understand how Act 60 might ......

reddit.com ↗

For those thinking of moving to the USA, only move to a city ...

Obviously, it will be a sacrifice. We might go from being more comfortable in the United States to being less comfortable back in Puerto Rico....

reddit.com ↗

Puerto Rico will change its laws. We'll email you when it does.

One email when Puerto Rico changes a tax, gun, cannabis or abortion law. Unsubscribe in one click.

Puerto Rico Guides

taxes

Puerto Rico Act 60: The Tax Strategy Explained

Act 60 offers qualifying U.S. citizens a 4% flat income tax rate and 0% capital gains tax on Puerto …

Data is informational only. Verify with a tax professional, real estate agent, and local sources before making relocation decisions. Crime data: FBI Crime Data Explorer 2023. Healthcare: Commonwealth Fund 2023; life expectancy from County Health Rankings 2024. Education: Education Week 2023. Housing: Zillow monthly index and Census ACS 2022. Insurance: rate surveys 2024. Sponsored links marked “Sponsored” may earn a commission. This does not affect our data or rankings.