Dominican Republic Property Taxes for Foreign Investors

What Taxes Apply to Dominican Real Estate?

Foreign and Dominican owners may face taxes when acquiring, owning, renting or transferring real estate.

The main areas to consider are:

  • Property-transfer tax.

  • Annual Real Estate Property Tax, or IPI.

  • Income tax on rental activity.

  • Tax treatment of a future sale.

  • Company-level taxes when property is held through an entity.

  • Potential CONFOTUR exemptions.

Property-Transfer Tax

The standard real estate transfer tax is generally 3% of the property value recognized for tax purposes, unless an exemption applies. (DGII⁠)

This tax is normally paid as part of the process required to register ownership in the buyer’s name.

The budget should also include legal fees, registry expenses, certifications and other closing costs.

Annual IPI Property Tax

The Impuesto al Patrimonio Inmobiliario, or IPI, is an annual tax on qualifying real estate held by individuals and certain trusts.

For individuals, the general rate is 1% on the taxable value exceeding the annual exemption threshold. The threshold is adjusted periodically, so owners should verify the figure for the relevant tax year. The DGII’s 2026 guidance confirms a 1% rate on the excess over the applicable exempt amount. (DGII⁠)

The DGII states that the annual filing is generally due during the first 60 days of the year, with payment in two installments. (DGII⁠)

Properties That May Be Exempt

Depending on the owner, use and project status, exemptions may apply to certain properties, including qualifying CONFOTUR developments.

A buyer should never rely solely on marketing language. Request:

  • The official CONFOTUR resolution.

  • Confirmation that the specific unit and transaction are covered.

  • The exemption period.

  • Written advice on transfer tax and IPI treatment.

Rental Income

Income generated from Dominican property may create Dominican tax obligations.

An owner should determine:

  • Whether registration with the DGII is required.

  • Which expenses may be deductible.

  • Whether withholding applies.

  • Whether the rental is personal or commercial activity.

  • How income is treated if the owner is non-resident.

  • Whether a company structure is appropriate.

Selling the Property

A sale may trigger tax consequences based on:

  • The seller’s legal status.

  • The acquisition cost.

  • Documented improvements.

  • Inflation adjustments where applicable.

  • The selling price.

  • The ownership structure.

  • Whether the activity is considered habitual business.

Maintain complete records from the original acquisition.

Personal Ownership or Company Ownership?

Personal ownership may be simpler for a private residence.

A company may be considered for:

  • Multiple properties.

  • Commercial rental activity.

  • Partnerships.

  • Estate planning.

  • Liability management.

However, corporate ownership creates accounting, tax and filing obligations. It should not be used solely because someone claims it always reduces taxes.

Frequently Asked Questions

Do foreigners pay the same property taxes?

Foreign ownership alone does not generally remove property-tax obligations.

Is every new development exempt under CONFOTUR?

No. The project and transaction must qualify under the applicable approval.

Is the IPI charged on the purchase price?

The DGII uses its applicable valuation and rules rather than automatically accepting only the advertised purchase price.

Can unpaid property taxes block a transfer?

Outstanding property obligations can delay the transfer and registration process.

Invest with Casa Key

Casa Key helps buyers understand expected closing costs and coordinates with Dominican lawyers and accountants.

View Dominican Republic properties at www.casakey.house.