The primary residence exemption (exoneración de residencia principal) is the most important benefit a homeowner has with CRIM (Centro de Recaudación de Ingresos Municipales, the Municipal Revenue Collection Center). If the property is your home, you don't pay tax on the first $15,000 of assessed value. For many homes assessed at that amount or less, that means paying no real property tax.
The problem is that it isn't automatic. You have to apply for it, and many people overpay for years because they never applied or because the paperwork wasn't completed when they bought the home. Here we explain the requirements, how to apply and what other exemptions exist. If you need a refresher on how the tax is calculated, first read the guide to real property tax.
What the exemption covers
Article 7.035 of the Código Municipal (Puerto Rico Municipal Code, Act 107-2020) exempts owners of residential property from the basic tax, the special state tax and the municipal taxes in an amount equal to the tax on the first $15,000 of assessed value. That value is CRIM's assessment, based on 1957 replacement costs, not market value.
- If your home is worth $15,000 or less in CRIM's assessment, the exemption covers the entire tax.
- If it is worth more, you pay only on the excess.
- If the property is partly residential, for example a house with a commercial space on the ground floor, the exemption applies only to the part used as a home.
Requirements
According to Article 7.035 and CRIM's Modelo AS-38 (Form AS-38):
- You must be the owner. Both spouses are considered owners. If one dies, the surviving spouse keeps the exemption without reapplying, as long as they are the original titleholder and still meet the requirements.
- You must use it as your home. As of January 1 of the year in question, the structure must be in use as a home by you or your family. "Family" includes your spouse and your relatives up to the fourth degree of blood relationship or the second degree by marriage.
- You can't charge rent. If you receive rent for its occupancy, the exemption doesn't apply.
- Only one home. If you have several homes, the exemption is limited to one. You choose which.
- Up to one cuerda. In an urban area, it includes the lot the house sits on; in a rural or suburban area, the parcel up to a maximum of one cuerda (a local land measure slightly smaller than an acre).
- You must be current. As of January 1 before the fiscal year you are applying for, you can't owe taxes on that property. If you do, you must request and obtain a payment plan within 30 days of filing the application. If you don't, the exemption isn't recognized for those years.
Absences for caregiving. Since the amendment made by Act 140-2024, CRIM can't deny or revoke the exemption just because you or your family moved temporarily to care for a relative 60 or older with a critical illness or a disability. The same applies if the owner, because of their own critical illness or disability, had to move in with a relative or into a care facility, as long as they don't charge rent for the house.
How to apply
Form. You apply with Modelo AS-38, "Exoneración contributiva para fines residenciales y veteranos" (tax exemption for residential purposes and veterans). The same form is used to request the veterans' exemptions. It is sworn before a notary or an authorized CRIM official. You can also file it online on CRIM's portal (crimpr.net, in Spanish), in the services section.
Documents that Modelo AS-38 asks for:
- Proof of title and possession: a deed, a certification from the Registro de la Propiedad (Property Registry) or a contract acknowledged before a notary.
- A CRIM debt certification covering all items and, if it applies, proof of the payment plan.
- A death certificate, if the applicant is the surviving spouse.
- If the property belongs to an estate or is co-owned, the owner information sheet (Modelo AS-74).
Deadline. According to Modelo AS-38, for properties with a tax history, the application is filed on or before January 31 before the fiscal year you are applying for. If you bought a newly built home constructed for sale, you have 30 days from the purchase to apply.
If you have a mortgage. The Code provides that the certification can be submitted through the mortgage lender, which notifies CRIM. When you close on a purchase, ask specifically whether the exemption was filed, and ask for a copy.
If you move, sell, start renting or stop living in the property, you must give notice before the next January 1. The Code makes it a misdemeanor to give false information or hide changes to keep the exemption, punishable by a $500 fine, six months in jail or both, in addition to collecting the unpaid tax.
If you missed the deadline: late exemption
CRIM lets you request the exemption late or retroactively when the application is filed after the deadline, if you meet the requirements. In addition to the regular documents, Modelo AS-38 asks for:
- Certifications from the water and electric utilities showing the date service began and the name of the person served.
- A sworn statement explaining why you didn't file on time and the exact date you began living in the property.
If you have been paying for years without the exemption, it is worth asking for an account statement and getting guidance at a CRIM regional office on how many years can be corrected and whether you are due a credit or refund.
Exemptions for veterans
The Carta de Derechos del Veterano Puertorriqueño del Siglo XXI (Puerto Rican Veteran's 21st Century Bill of Rights, Act 203-2007) and CRIM's Regulation 8341 establish three exemptions for a veteran's home. You apply for them with the same Modelo AS-38:
| Type | What it covers | When to apply |
|---|---|---|
| Veteran (regular) or surviving spouse | Up to $5,000 of the assessed value of their primary residence | No later than the January 1 after the purchase or construction |
| Veteran with a disability or impairment | 100% of the tax on the house and lot, up to 1,000 square meters in an urban area or one cuerda in a rural area | On or before January 31 before the fiscal year |
| Veteran with a service-connected disability of 50% or more | The first $50,000 of the assessed value of the house and lot, with the same size limits | At the time of payment; if the disability is permanent, the first time is enough |
The regular $5,000 exemption is applied before the primary residence exemption, and the exemption for a service-connected disability can be combined with the others. The documents include the discharge certificate (DD-214) and, depending on the case, the Social Security disability determination or the certification of the disability rating.
A veteran in Bayamón (hypothetical amounts) lives in a house with an assessed value of $24,000. Bayamón's real property tax rate for 2026-2027 is 9.58%.
- Without exemptions: $24,000 × 9.58% = $2,299.20 a year.
- First subtract the veteran's exemption: $24,000 − $5,000 = $19,000.
- Then the primary residence exemption: $19,000 − $15,000 = $4,000.
- Annual tax: $4,000 × 9.58% = $383.20, before any early payment discount.
Other exemptions and relief
Bona fide farmers. The Code exempts from property tax the personal and real property of bona fide farmers that is used intensively in the farming business. You apply with Modelo BC-69.
Other exemptions. CRIM has forms for exemptions for cooperatives, nonprofit organizations, properties in historic zones and the police officers' exemption, among others. Each has its own law and requirements; ask at the regional office.
Older adults with debts. It isn't an exemption, but CRIM has a regulation to forgive interest, surcharges and penalties for owners 65 or older who have a single property that is their primary residence and income of no more than $1,500 a month. You have to pay the principal. We explain it in the guide to CRIM debts.
If you are also interested in how benefits for older adults work on the income tax return, see pensions and retirees.
Frequently asked questions
Can I have the exemption on two houses if my family lives in one and I live in the other?
No. The Code limits the exemption to one home per owner. If you have two, you choose which one gets the benefit.
Does it apply if siblings inherited the house together and one of them lives in it?
The Code treats a property owned in common by several people, such as an estate, as a single home. The exemption is granted to any owner who lives in the property and doesn't have the exemption on another one. You need to fill out the co-owner sheet (Modelo AS-74).
Does the bank take care of it if I bought the house with a mortgage?
The bank can process it, but don't take it for granted. Ask at closing, request a copy of the application and check your first bill or account statement to confirm the exemption appears.
Do I lose the exemption if I rent out the house?
Yes. If you charge rent for its occupancy, the property no longer qualifies. You must notify CRIM of the change before the following January 1.
Can I apply for the exemption if I have an old debt with CRIM?
Yes, but you must get a payment plan within 30 days of filing the application. If you don't, the exemption isn't recognized for those years.
Sources
- Oficina de Gerencia y Presupuesto, "Código Municipal de Puerto Rico, Ley 107-2020, según enmendada (rev. 9 de septiembre de 2026)". bvirtualogp.pr.gov
- CRIM, "Modelo AS-38: Solicitud de exoneración para fines residenciales y veteranos". portal.crim360.com
- CRIM, "Preguntas frecuentes: exenciones y exoneraciones". portal.crim360.com
- CRIM, "Reglamento Núm. 8341 para implementar los beneficios contributivos de la Carta de Derechos del Veterano Puertorriqueño del Siglo XXI". portal.crim360.com
- CRIM, "Tipos contributivos sobre la propiedad mueble e inmueble, año fiscal 2026-2027". portal.crim360.com
- CRIM, "Reglamento para la condonación de intereses, recargos y penalidades de contribuciones inmuebles del contribuyente mayor de 65 años". portal.crim360.com
787TAX is an independent guide. It is not Puerto Rico's Departamento de Hacienda, the CRIM or the IRS. This page is general information, not tax or legal advice. Example figures are hypothetical. Found an error? Tell us.
