P.R. Laws tit. 21, § 5002
A special tax of one point zero three percent (1.03%) per annum on the appraised value of all personal and real property in Puerto Rico not exempted from taxes is hereby levied for Fiscal Year 1992-93 and for each subsequent year, for the amortization and redemption of the general obligations of the Commonwealth. Municipalities are hereby authorized and empowered to levy another additional surtax subject to the requirements established in Act No. 4 of April 25, 1962, as amended. This surtax shall be in addition to all other taxes imposed by virtue of other laws in effect. The Municipal Revenues Collection Center is hereby empowered and directed to annually collect these taxes. Notwithstanding the foregoing, for fiscal years 2009-2010, 2010-2011, and 2011-12, the special surtax for the amortization and redemption of the general obligations of the Commonwealth applicable with respect to real property shall be determined on the basis of a rate of point one zero three percent (0.103%) per annum. Furthermore, for fiscal years 2009-2010, 2010-2011, and 2011-2012, the special surtax on real property shall be reduced to one tenth (1/10) of the tax rate that has been adopted by the municipality by municipal ordinance for levying said tax for each one of these fiscal years.
The owners of property for residential purposes are hereby exonerated from the payment of the special surtax and the basic tax levied by virtue of § 5001 of this title and this section and the property taxes levied by the municipalities of Puerto Rico corresponding to Fiscal Year 1992-93 and to each subsequent fiscal year in an amount equal to the tax levied on said properties up to fifteen thousand dollars ($15,000) of the appraised value of the property, subject to the provisions of § 5007 of this title. In the case of properties partially devoted to residential use, the exoneration from payment of said taxes which would otherwise be payable, shall be recognized only as to that portion of the property devoted to such purposes for up to an amount equal to fifteen thousand dollars ($15,000) of the appraised value. For fiscal years 2009-2010, 2010-2011, and 2011-2012, the exemption applicable to the owners of properties for residential use shall increase to one hundred fifty thousand dollars ($150,000). For said fiscal years, in the case of properties partially devoted to residential use, the exoneration from the payment of said taxes, which would otherwise be payable, shall be recognized only as to that portion of the property devoted to such purposes for up to an amount equal to one hundred fifty thousand dollars ($150,000) of its appraised value.
In the case of properties for residential purposes, both the husband and wife shall be deemed as owners and beneficiaries of this exemption, and taxpayers, and in the event of the death of [either] of the spouses, the surviving spouse shall continuously keep the exemption without having to apply for a new exemption, provided that he/she is the original titleholder.
It is hereby provided that in order to keep the above exemption, the surviving spouse shall be bound to comply with all the requirements of this chapter, particularly with those regarding the use of the property subject to the abovementioned exemption for residential purposes.
In the case of veterans, the exemption from payment of taxes granted by the provisions of this section, shall be computed after deducting from the appraised value of the property the exemption granted to veterans by legislation in effect.
In the case of taxpayers who avail themselves of the exemption benefits established by this section and the benefits of a discount for prompt payment as established by § 3.48 of this Act, said discount shall be computed on the basis of the difference resulting after [subtracting] the amount of the exemption granted by virtue of the provisions of this section from the total tax levied which is subject to collection.
Any structure shall be understood to be devoted to “residential use” when on the 1st day of January of the corresponding year, it is being used as [a] residence by its owner or his/her family, or any new structure, built to be sold and appraised for tax purposes in the name of the entity or person who built it, if on the date of [issuance] of the tax receipt, it is being used or is available for use by the buyer as his/her home or that of his/her family, provided the owner did not receive rent for its occupancy; including, in the case of properties located in the urban zone, the lot where said structure is located, and in the case of properties located in the rural and suburban zones, the land where such a structure is located, for up to a maximum capacity of one (1) cuerda. When a taxpayer acquires a new structure built after the 1st of January of any year and submits the certification as evidence that he/she uses it as a home for him/herself or his/her family, the mortgage creditor shall withhold the tax corresponding to the excess of the appraised value over fifteen thousand dollars ($15,000) or the tax corresponding to that part of the property not being used as a home by the owner or his/her family. For fiscal years 2009-2010, 2010-2011, and 2011-2012, the mortgage creditor shall withhold the tax corresponding to the excess in appraised value over one hundred fifty thousand dollars ($150,000) or the tax corresponding to that part of the property not being used as a home by the owner or his/her family.
Once the certification is submitted, the mortgage creditor will notify as much to the Collection Center within a period of thirty (30) days from the date of acquisition of the property.
The tax exemption benefits established by this section and § 5001 of this title are limited to only one dwelling in every case in which the same owner has more than one property.
For the purposes of this section, the term “family” includes the spouses and their relatives within the fourth degree of consanguinity or the second degree of affinity.
For purposes of this section, the term “owner” includes any housing cooperative, limited dividends corporation or non-profit association. In cases of housing cooperatives, the tax exemption provided by this section and § 5001 of this title shall be computed on the appraised value for tax purposes proportionally attributable to each housing unit. It will be optional for such cooperatives to avail themselves of the exemption provided by this section, or the tax exemption provided by Act Apr. 9, 1946, No. 291, known as the “General Act of Cooperative Partnerships of Puerto Rico”.
“Limited dividends corporation” shall be understood to be those corporate organizations, created exclusively for the purpose of providing housing to low or moderate income families, which are limited as to the distribution of their income by the law which authorizes their incorporation or by their own corporate charter, provided they qualify under §§ 221(d)(3) or 236 of the National Housing Act (Public Law 90-448, 82 Stat. 476, 498) and operate in accordance with the regulations of the Federal Housing Administration Commissioner regarding the distribution of their income, the availability of housing for low or moderate income families, the fixing of rents, fees, rates of return and operating methods, according to a certificate issued by the Department of Housing of Puerto Rico.
A nonprofit association shall be understood to be, for purposes of this section, a nonprofit organization which provides housing for low or moderate income families on condition that the property be used and that the rental fees be fixed pursuant to the rules and regulations promulgated by the Federal Housing Administration under §§ 221(d)(3) or 236 of the National Housing Act, as amended (Public Law 90-448, 82 Stat. 476, 498), when so certified by the Department of Housing.
Nonprofit associations shall also be understood to be those nonprofit organizations which provide housing to be rented to persons over sixty-two years (62) of age on condition that said corporations qualify under § 202 of the National Housing Act, as amended (Public Law 36-372, 86th Congress, 73 Stat. 654), when certified by the Department of Housing.
In order to enjoy the tax exemption benefits provided by this section and § 5001 of this title, it will be necessary to prove, through a certification presented at the Collection Center, or to the mortgage creditor if any, in the manner and on the date provided by the Collection Center, that the taxpayer meets the requirements established herein including all the necessary information, so that the Collection Center may carry out a correct computation of the tax exemption authorized by this section. Any taxpayer who has presented the certification referred to in this paragraph shall be bound to notify, as provided below, any changes in his/her qualifications for enjoying the tax exemption granted herein, and any transfer and modification of the domain on the property regarding that over which said certification was filed. If the property secures a loan, the taxpayer is bound to deposit periodically, the amount of the property taxes with the mortgage creditor, and the taxpayer shall notify the changes in his qualifications to the mortgage creditor who, in turn, shall notify the Collection Center. In all other cases the changes in the qualifications shall be notified directly to the Collection Center. In both cases, the changes in the qualifications shall be notified prior to the first of January following the date in which the changes in said qualifications were made.
In all cases in which the property which secures a loan is devoted to residential use and the taxpayer is bound to deposit periodically with the creditor the taxes that are to be paid on that property, the creditor shall pay the net tax levied according to the receipt, minus the corresponding discount for advance payment, in those cases where the receipt is for an invoice which takes into consideration the tax exemption granted for taxes established by this section and § 5001 of this title. When the invoice has been made for the total tax levied without taking into consideration the tax exemption, but the mortgage creditor is able to prove that the taxpayer is entitled to the exemption, he/she will deduct the amount corresponding to the exemption from the total tax levied and the discount for advance payment. He/She shall pay the difference and include with the payment the certification that proves the right to the exemption.
When the property has not been appraised, but the mortgage creditor is able to prove that the property is taxable pursuant to this part or any other ordinance in effect, and that the taxpayer is entitled to the tax exemption granted by this section, he/she will proceed to determine a preliminary tax pursuant to the valuation parameters in effect which will be supplied by the Collection Center; he/she will deduct from the total of the determined tax the amount corresponding to the exemption and the discount for prompt payment and will collect the corresponding tax and pay the aforesaid to the Collection Center. Said payment will be accompanied by a certification attesting to the location of the property, its official real estate district record number or the taxpayer’s social security number, the preliminary appraised tax, the amount of the tax exemption and the tax paid to the Collection Center. The Center will appraise the property subject to the payment within the six (6) -month period after the certification is received.
If after making the adjustment and the payment indicated in the previous paragraphs, there is a difference between the amount deposited by the taxpayer for payment of taxes and the real amount paid by the mortgage creditor in the name of the taxpayer, the mortgage creditor shall be bound to reimburse the resulting surplus to the taxpayer.
As an indispensable condition for the taxpayer to enjoy the benefits of the exemption provided by this section, it is established that by the 1st of January prior to the fiscal years for which the tax exemption is requested, the taxpayer not owe any amount on account of real property taxes on the property subject to the tax exemption application, or that instead, the taxpayer draw a payment plan and obtain its approval so as to ensure the liquidation of the debt. This payment plan must be drawn within thirty (30) days after the exemption certificate has been filed. In case the taxpayer should fail to comply with the requirement to draw the payment plan, the right to the tax exemption authorized by this section shall not be recognized for those fiscal years for which the taxpayer filed the certificate but did not draw any payment plan whatsoever.
Should the taxpayer fail to pay the amount due as agreed in the payment plan, the total debt will be deemed as due and the Collection Center will proceed to collect it through legal collection proceedings pursuant to the provisions of this part, including expenses for auction notices and subtracting what has been paid up to that moment. The Collection Center is hereby empowered to enter a lien to last until the total liquidation of the tax debt.
None of the provisions of this section and § 5001 of this title shall prevent the Collection Center from resorting to the sale at public auction of any property devoted to residential use when the aforesaid is, or could be, securing a lien for tax debts.
When payment plan is granted to owners partially exempt from the tax levied to liquidate a debt in arrears, the provisions of § 5096 of this title, concerning the application of payments in a rigorous date-due order shall not apply upon liquidation of the tax corresponding to the 1992-93 fiscal year and subsequent fiscal years, regarding the tax exemption provided for taxes imposed by this section and § 5001 of this title.
Any person who in order to avail him/herself of the tax exemption benefits established by this section and § 5001 of this title, presents any fraudulent statements, evidence or information, or intentionally fails to notify any changes whatsoever in his/her qualifications to enjoy the tax exemption benefits established herein, or intentionally fails to notify any ownership transfers or modifications concerning the property by virtue of which he/she enjoys the benefits of said exemption, or who knowingly fails to present or hides the true details which allow the Collection Center to make a correct computation of the authorized tax exemption for the taxes established by this section and § 5001 of this title, shall incur a misdemeanor and, upon conviction, shall be sanctioned with a fine of five hundred dollars ($500) or imprisonment for six (6) months, or with both penalties, at the discretion of the court.
The Collection Center shall prescribe the rules and regulations needed to comply with the provisions of §§ 5001–5008 of this title.
History —Aug. 30, 1991, No. 83, § 2.02; July 3, 1996, No. 64, § 34; renumbered as § 36 on Aug. 12, 1997, No. 75, § 35; June 24, 1998, No. 95, § 1; May 4, 2001, No. 28, § 2; Jan. 23, 2006, No. 19, § 1; Mar. 9, 2009, No. 7, § 55; July 10, 2009, No. 37, § 25.