In April 2026, two of the largest residential purchases in Puerto Rico were recorded at Dorado Beach, and neither deed carried a person's name. According to Property Registry filings reviewed by El Nuevo Día, 4352 West Point III LLC paid $18,128,152 for a unit in West Point III. That is the newest phase of the Ritz-Carlton Reserve condohotel PRISA Group is building on the coast. The seller was the developer's own entity, DBR West Point Phase III LLC. In the same month, Dorado West Point LLC bought another residence in the third phase for $11,868,461.
Buying through an LLC is ordinary at the top of Dorado's market, and the reasons are many. Those filings say nothing about whether either buyer holds a tax decree. They do show how common entity ownership is in the community. That matters because Act 38-2026 changes whose name can satisfy one specific obligation. For anyone filing a new Individual Resident Investor application on or after January 1, 2027, the primary residence tied to that decree cannot be held through an LLC.
The Deadline Is Set by the Portal Timestamp
Puerto Rico enacted Act 38-2026 on March 10, 2026, amending the Individual Resident Investor program under the Act 60 Incentives Code. Most coverage has focused on the tax rate. For a Dorado purchase, the more practical detail is what the December 31 date actually measures.
The Department of Economic Development and Commerce, known as DDEC, addressed this in Informative Bulletin 2026-004. Applications received by 11:59 p.m. on December 31, 2026, as confirmed by the filing-fee timestamp on the Incentives Portal, keep "all substantive benefits in effect at the time of filing." That includes the primary residence acquisition rules that applied before Act 38-2026, "regardless of the decree's approval date."
For a Dorado purchase, this means nobody has to close on a house by New Year's Eve. The application is what has a deadline. The home purchase follows its own clock, which starts when the decree is granted. A buyer who files in December 2026 and receives a decree months later still buys under the older ownership rules. The rates in the table cover only the categories named there. Gains on appreciation that built up before residency are taxed under separate rules, which belong in a conversation with tax counsel.
| Application received by Dec. 31, 2026 | Application filed on or after Jan. 1, 2027 | |
|---|---|---|
| Rate on qualifying interest, dividends, and capital gains accrued after residency | 0% | 4% |
| Decree expiration | December 31, 2035 | December 31, 2055 |
| Ways to hold the primary residence | Individually, with a spouse, with a domestic partner, or through a Puerto Rico entity owned solely by the holder or the couple | Individually, jointly with a spouse, or through a qualifying grantor trust |
| Prior-residency test | Not a Puerto Rico resident between January 17, 2006 and January 17, 2012 | Not a Puerto Rico resident in the six years before relocating |
What the Deed Must Show After January 1
For applications filed on or after January 1, 2027, DDEC lists three things it will verify for the home. The buyer must hold "full domain and title" to the property. The title must be "duly registered or pending registration" with the Puerto Rico Property Registry, which means a public deed has been filed for registration. The owner must be the individual, the individual jointly with a spouse, or a grantor trust covered by Section 2022.07 of the Incentives Code.
Kevane Grant Thornton's March 20, 2026 tax alert says the change "significantly impacts tax planning alternatives" because it no longer allows entity ownership, including LLCs, for newly covered applicants. At Dorado Beach, the closing documents get drafted well before the keys change hands. For a 2027 filer, deciding whose name goes on the deed is now a question about the decree as much as about privacy or estate planning, and it should be settled before the purchase agreement is signed.
The rule earlier in 2026 was looser. DDEC's Circular Letter CC 26-001, dated January 12, 2026, recognized four ways to hold the home. They were as an individual, with a spouse, with a domestic partner in a relationship analogous to marriage, or through a Puerto Rico-organized entity owned solely by the holder or solely by the couple. The partner and entity routes require a request to amend the decree and a favorable review by the Office of Incentives. Pre-2027 applicants can still use an eligible Puerto Rico entity. If that entity's shares or controlling interest are later transferred, CC 26-001 requires the holder to show that another qualifying residence was bought, in the annual report for the year of the transfer.
Rules That Apply on Both Sides of the Cutoff
Some parts of the home requirement did not change on January 1. They affect a Dorado purchase as much as the ownership question does.
- Two years to buy. CC 26-001 restates the Incentives Code requirement to acquire title to Puerto Rico real property "within two (2) years after obtaining the Decree." For a new-construction phase with a long delivery schedule, that window can matter more than the list price.
- A seller with no family tie. The home has to come from a person or company "totally unrelated and alien" to the decree holder. DDEC applies the Internal Revenue Code's definition of a related person, which covers siblings, a spouse, and direct ascendants or descendants. The circular notes that this definition says nothing about relatives by marriage. Buying a parent's house in Dorado does not count.
- Owned for the whole decree. The holder must keep "exclusive and complete" ownership of a primary residence for the full life of the decree.
- Certified every year. Where the decree requires it, the annual exempt-business report, known as the IANE, includes a certification of ownership and primary-residence use. It can be a letter signed under penalty of perjury. A primary-residence exemption certificate from CRIM, the municipal property tax agency, can serve as supporting evidence.
Neither the circular nor the bulletin sets a minimum price for the home.
The Extension Rule for Current Decree Holders
Current decree holders can be caught by the new rule even though they filed years ago. Holders under Act 22 or the Incentives Code may ask to extend their decrees to December 31, 2055. An approved extension moves them to the 4% rate starting January 1 of the year they file the request. The bulletin adds a property condition. A holder who requests the extension before buying the primary residence, and before reporting that purchase in the annual report for the year of acquisition, becomes subject to the direct-title rule.
That puts the extension request and the home purchase in a set order. A decree holder still searching in Dorado who plans to extend has to settle with counsel which comes first, because the order decides whether an LLC can hold the house.
What Dorado's 2026 Sales Show So Far
Dorado's top tier has been active. La Cala, Ritz-Carlton Reserve Residences, sits in what PRISA Group calls the last beachfront section of the resort's core. It offers two models, The Beacon and The Horizon, designed by architects Segundo Cardona and Maryse Nicole Menendez. El Nuevo Día reported that the first La Cala sale closed on October 1, 2025 for $40 million. As of late August 2026, its 13 residences were being marketed at $33.5 million to $40.5 million. El Nuevo Día's August 28, 2026 report described the second-highest sale ever recorded in the project. It also said the ultraluxury residential-tourism segment had multiple sales above $5 million in 2026. The publicly available text does not give that sale's price.
The public record does not show a deadline-driven rush. No Dorado-specific data published through October 2026 links the December cutoff to more closings, and an August 26, 2026 analysis of the San Juan market by Condado Daily found no measurable rush there either. What the cutoff does change can be seen in the documents. A buyer who files after December 31 cannot use the LLC structure that appeared on both April deeds at West Point III to satisfy the decree's home requirement.
One question is still open. DLA Piper's March 12, 2026 analysis said the Financial Oversight and Management Board had not yet endorsed Act 38-2026. The latest status report from Dan Merriam says no final endorsement had been publicly recorded as of August 2026. DDEC is applying the law through its bulletin regardless. Confirm the law's status with tax counsel before relying on it.
Frequently Asked Questions
Do I need to close on a Dorado home by December 31, 2026? No. Under DDEC's bulletin, the cutoff applies to the decree application's portal timestamp. The home purchase is due within two years after the decree is obtained.
Does the title have to be fully recorded at the Registry? For 2027 applicants, DDEC accepts title that is registered or pending registration, meaning the public deed has been filed with the Property Registry.
Can a 2027 applicant still buy a Dorado property through an LLC? Yes, but that property will not satisfy the decree's primary residence requirement. For applications filed on or after January 1, 2027, the qualifying home has to be held individually, jointly with a spouse, or in a qualifying grantor trust.
Who can answer questions about a specific decree? DDEC's Office of Incentives lists (787) 764-6363 and [email protected]. Questions about structure and rates belong with your own tax and legal advisors.
If a Dorado purchase is part of your decree plans, the order of the filing, the extension request and the closing should be set before you choose the home. Aileen Beale Real Estate works with your counsel on that order and on the off-market search, so the deed matches the timing of your application. Request a Private Consultation.
This article is general information, not legal, tax or financial advice. Consult a qualified professional about your situation.
