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Time Shares
Tax incentive for timeshare developments and vacation ownership operations, supporting recurring tourism visitation.
8 min
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Section Code:
1020.05 (a)-23
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Purpose:
Visitor Economy — 1020.05 (a)-23
Overview
The Time Shares designation under Section 1020.05(a)-23 of Act 60-2019, as amended, provides preferential tax treatment for timeshare developments and operations in Puerto Rico. This designation supports vacation ownership properties that provide recurring tourism visitation and property development.
Qualifying timeshare developers and operators may receive reduced corporate income tax rates, property tax exemptions on timeshare properties, and municipal tax relief. The program attracts timeshare resort developers, vacation club operators, and shared ownership properties.
The key distinction is its focus on fractional vacation ownership rather than traditional hotel operations. Timeshares involve selling usage rights to vacation properties on recurring schedules.
Key Benefits
Reduced Corporate Income Tax Rate
Timeshare operators may receive reduced rates on income from timeshare sales and operations.
Property Tax Exemptions
Timeshare properties, units, and common facilities may receive property tax exemptions.
Municipal Tax Relief
Timeshare operators may receive exemptions from municipal license taxes.
Recurring Tourism
Timeshares create recurring visitation patterns and long-term tourism relationships with property owners.
Requirements & Obligations
Timeshare Regulations Compliance
Timeshare operations must comply with timeshare regulations including disclosure requirements, sales practices, and ownership documentation.
Property Standards
Timeshare properties must meet accommodation standards and maintain quality facilities.
Consumer Protection
Timeshare operators must maintain appropriate consumer protections and comply with timeshare ownership regulations.
Employment
Timeshare operations must employ Puerto Rico residents in sales, operations, and property management.
Reporting
Annual reports document timeshare operations, ownership levels, revenues, and employment.
How to Apply
Applications typically require twelve (12) to twenty-four (24) months given timeshare regulatory requirements. Applications include development plans, timeshare program structures, financial projections, and regulatory compliance documentation. Upon approval, operators complete development and commence timeshare operations.
This information is educational and should not be considered legal or tax advice. Applicants should consult with qualified legal and tax professionals familiar with Puerto Rico incentive programs before making any business decisions or submitting applications.
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