Frequently Asked Questions

Yes, there is a property tax of 1% that must be paid on the total value.

Law 158-01 or CONFOTUR establishes tax incentives for real estate, business, and commercial projects to promote investment in tourist areas. 

Developers receive exemptions from taxes on construction materials, reducing costs and making projects more profitable. 

Benefits for the first buyers of properties in Tourist Development projects include: 

Exemption from the 3% transfer tax. 

Exemption from the 1% annual Property Tax (IPI) for 10 to 15 years. 

Please consult your agent for more details. 

In the Dominican Republic, there are no restrictions for foreigners to own property. Individuals and foreign legal entities (commercial companies) can buy, sell, and own real estate, provided they meet the minimum requirements required by law.

To transfer a Property Title Certificate, individual property buyers must request inclusion in the Internal Revenue Directorate (DGII) system to obtain a National Taxpayer Registration Number (RNC). 

Foreign commercial entities must establish a local address, obtain a Commercial Registry, and be incorporated into the DGII system to obtain an RNC number. 

The Property Title Certificate is the document that validates a person’s right to a property. Issued by the Title Registry, it is the official document of the Dominican State that legally certifies ownership of the property.

In real estate transactions, it is crucial to mitigate risks by investigating the legal, fiscal, and registration status of the property. Therefore, it is advisable to have a lawyer specialized in Real Estate Law who can carry out the necessary processes and obtain relevant information from the corresponding institutions. 

The process of purchasing property may vary depending on the legal structure involved, but the fundamental steps are as follows: 

Thorough investigation of the property. 

Signing a Sales Contract defining the terms and conditions. In cases of installment payments, a Purchase Option or Promise of Sale Contract is usually signed, with a 10% deposit to reserve the property. 

The buyer can choose to acquire the property personally or through a legal entity, depending on their objectives. 

The closing process can take between 30 and 45 days, depending on the agreements and required documentation. 

In cases of representation, a notarized Power of Attorney can be used or Apostille if the buyer is a foreigner. 

On the closing date, the contract terms are fulfilled, and the agreement is legalized by a Notary. 

The lawyer initiates the property title transfer process, pays the corresponding taxes, and registers the sale. 

The Property Title Certificate is issued in the buyer’s name within 20 to 35 days. Obtaining the certificate can be done by the owner or their lawyer. 

The involvement of a lawyer ensures a transparent process in compliance with current legislation. 

The purchaser of real estate is obligated to pay the Transfer Tax, which corresponds to 3% of the value recorded in the DGII (General Directorate of Internal Taxes) or the purchase price stipulated in the Sales Contract, if it is higher. This tax is settled with the DGII through an administration check payable to the Internal Revenue Collector. 

Law 158-01 and its revisions offer tax benefits to real estate projects, businesses, and commercial activities in the country’s tourist areas. First-time buyers of real estate projects that benefit from the exemptions of this law also gain advantages, such as the exemption from the 3% Transfer Tax for registering and transferring the property title to their name, as well as the 1% Property Tax (IPI).

In addition to the 3% Transfer Tax, in a real estate transaction, lawyers establish fees equivalent to 1% of the actual sale price, plus the fees of the notary public involved. These legal services are subject to an 18% Tax on the Transfer of Industrialized Goods and Services (ITBIS). Each party in the transaction assumes the costs of their own lawyer and related expenses. 

Costs and expenses may vary depending on the property purchase structure. 

Being a property owner entails paying the Property Tax (IPI) annually. This tax affects both individuals and trusts and is based on real estate assets. 

For individuals, the IPI taxes the total assets exceeding RD$7,710,158.20. It applies at a rate of 1% on the portion exceeding that threshold for residential, commercial, professional, and industrial properties, as well as urban plots, whether developed or undeveloped. Properties valued below this amount are exempt from the IPI. 

This tax is divided into two semi-annual payments, with the first due on March 11 and the second on September 11 each year. 

Regarding properties owned by commercial entities, 1% of the annual assets based on the assessed value must be paid, without exemptions. 

Certain properties are exempt from the IPI, such as agricultural or rural properties, properties owned by individuals aged 65 or older (with no other real estate holdings), properties covered by Law 158-01, and those within low-cost or public offering trusts.