Hello, future owner of paradise! 🌴 If you’re dreaming of a beachfront villa or a modern apartment overlooking swaying palm trees in the Dominican Republic, it’s important to know that—besides picking out your tropical decor—you’ll also need to be familiar with the taxes involved in buying property. But don’t worry, it’s not as complicated as it sounds — we’ll break it down with a Caribbean twist! 🍹
📋 Basic Taxes When Buying Property
When you purchase property in the DR, there are a few key taxes and fees you need to know about. Here’s a simple breakdown:
- Property Transfer Tax
This is the main character in this story. It’s a one-time payment equal to 3% of the highest value between the purchase price and the property’s assessed (cadastral) value. This tax must be paid in order to register the title in your name at the Dominican Tax Office (DGII). - Legal and Notary Fees
These aren’t technically taxes, but they are necessary expenses. Legal fees usually range between 1% and 1.5% of the purchase price, depending on the attorney. This covers contract drafting, title verification, and all the legal support you need to ensure a secure purchase. - Annual Property Tax (IPI)
If your property is valued over RD$9,520,861.00 (approximately USD $165,000), you’ll need to pay an annual tax of 1% on the amount exceeding that threshold. If your property is under that value or it’s your only real estate, you’re exempt. Great news if you’re just looking for a tropical getaway!
✨ But Wait! Buying in Punta Cana? CONFOTUR Is Your Best Friend
If you’re thinking about investing in real estate in tourist zones like Punta Cana, Cap Cana, or Bávaro, you may be eligible for some amazing tax breaks under the CONFOTUR Law (Law 158-01).
What does that mean? Basically, a bundle of juicy tax exemptions for up to 15 years. It includes:
✅ No 3% property transfer tax
✅ No annual property tax (IPI)
✅ Exemption from rental income tax, capital gains tax, and more
This only applies to government-approved projects under the CONFOTUR program, so make sure to check if your future property is CONFOTUR-certified! It’s an excellent perk if you’re buying as an investment or planning to rent it out.
🌞 In Summary…
Buying property in the Dominican Republic isn’t just a sunny escape — it can also be a smart financial move! If you stay informed about taxes and take advantage of programs like CONFOTUR, you can save big and boost your returns. So before you pack your flip-flops, talk to a good real estate attorney and make sure your investment is well guided.
See you on the beach with a coconut in hand! 🥥🏖️
