Puerto Rico: Program for taxpayers to resolve unpaid real property taxes offers relief, discounts

The Municipal Revenue Collection Center (Centro de Recaudaciones de Ingresos Municipales (CRIM)) approved a program regarding the collection of delinquent real property taxes.

The program is being made available under a regulation known in English as the “Special regulation in benefit of the taxpayer for the payment of debt.” The purpose of the program is to provide taxpayers an opportunity to update their records and to pay outstanding amounts of real property taxes.  Any real property tax debts that are not voluntarily settled by taxpayers under the program could be acquired by third-party collection agencies or other third parties (in effect, these parties would “step into the shoes” of the CRIM and be allowed to assume the CRIM’s collection authority pursuant to provisions of the municipal code (Act 107-2020, as amended) and thus allowed to enforce collection of the unpaid real property tax as well as all interest, surcharges, and penalties assessed and accrued).

Any taxpayer with unpaid real property tax for almost all fiscal years (excluding years 2021-2021 and 2021-2022) will be eligible for the relief program. 

• Taxpayers currently involved in any administrative or judicial procedure regarding their real property tax liabilities can participate in the program, as well as taxpayers currently having a payment plan or a closing agreement with the CRIM. 
• Also, taxpayers in bankruptcy proceedings (if authorized by the bankruptcy court) can renegotiate the pending balance in their payment plan with the CRIM. 
• To participate in the program, taxpayers must be in compliance with their real property taxes for fiscal years 2020-2021 and 2021-2022 (that is, there are no outstanding real property tax debts for these tax years). If a taxpayer cannot pay the real property taxes for these years in one payment, the CRIM is authorized to set up a payment plan pursuant to Article 7.060 of the municipal code, and this payment plan will only cover past due amounts owed for fiscal years 2020-2021 and 2021-2022.

Real property tax debts for fiscal years 2016-17 to 2019-20:

• If the principal amount of tax is paid on or before January 31, 2022—all interest, surcharges, and penalties will be waived.  
• If paid between February 1, 2022 and June 30, 2022—the tax debt can be settled by paying the principal amount and total amount of accrued interest. Surcharges and penalties will be waived. 

Real property tax debts for fiscal years prior to 2016-17:

• If payment is made on or before January 31, 2022—taxpayers will be allowed a 55% discount on the principal amount owed, and all interest, surcharges, and penalties will be waived. 
• If payment is made between February 1, 2022, and April 30, 2022—taxpayers will be allowed a 40% discount on the principal amount owed, and all interest, surcharges, and penalties will be waived. 
• If payment is made between May 1, 2022, and June 30, 2022—taxpayers will be allowed a 25% discount on the principal amount owed, and all interest, surcharges, and penalties will be waived. 

Once the payments are made, the CRIM executive director will, within 90 days of the date of payment, issue a “negative debt certificate” to the taxpayer. 

For more information, contact a KPMG tax professional in Puerto Rico:

Carlos A. Molina | +1 (787) 622-5311 | cmolina@kpmg.com

Cecilia C. Colón Ouslán | +1 (787) 717-0296 | ccolonouslan@kpmg.com