The 40-article text defines what constitutes a primary residence and requires a 3% transfer fee and a transfer file deposited in the Registry of Titles to accept the reinvestment, but it does not specify the amount on which the 10% is calculated
SANTO DOMINGO. – Anyone who sells their home and uses that money to reserve an apartment off-plan would not be able to count the transaction as a reinvestment to be exempt from the 10% tax on real estate capital gains, if the regulations of Law 30-26 are signed as they appear in the 40-article draft reviewed by El Inmobiliario.
Article 11 of the document elaborates on the concept of primary residence and the conditions for reinvestment that the law rewards with an exemption. According to paragraph II, reinvestment will only be valid in properties "effectively completed and perfected," with transfer in favor of the taxpayer, and the seller must demonstrate three things simultaneously to the DGII (General Directorate of Internal Revenue):
- that the price was paid, in whole or in part, according to the terms of the contract;
- that the 3% transfer tax was paid and there is an official receipt;
- and that the transfer file was deposited and registered in the Title Registry, which is proven by the deposit certificate, physical or digital, or by the new title certificate.
Next comes the exclusion that weighs most heavily on the sector: The draft states that "purchase options, promises of sale, pre-sale contracts in plans, and acts under private signature that have not formally initiated their transfer and registration process" will not be accepted as reinvestment.
The text does not clarify whether this last condition applies to all instruments on the list or only to privately signed transactions, a distinction that determines whether a purchase under construction with an initiated registration process counts or not. A unit under construction typically does not yet have its own title deed.
The deadline adds pressure. As reported in June by the newspaper Hoy, the head of the DGII (General Directorate of Internal Revenue), Pedro Urrutia Sangiovanni, stated that the law allows for reinvestment of the proceeds within six months. However, the draft does not repeat this timeframe but conditions the reinvestment on a completed, or at least initiated, registration process.
What the law had already established
Law 30-26, enacted on June 18, 2026, created in its article 14 article 296-1 of the Tax Code: capital gains of individuals from the sale of real estate are taxed at 10%, as a single and final payment.
Urrutia Sangiovanni explained in July, in activities publicized by the Presidency, that the main residence is exempt if the amount is reinvested within six months, and that the residence sold by people over 65 years of age is also exempt.
10% on what?
The 40 articles of the draft regulations do not show how the profit is calculated: neither the acquisition cost, nor the inflation adjustment that article 289 of the Tax Code applies to the general regime, nor the treatment of inherited property or improvements, gaps that El Inmobiliario raised on June 25.
The draft does mention capital gains in Article 36, paragraph II, but only for donations that the DGII (General Directorate of Internal Revenue) reclassifies as sales: in such cases, the transferor will pay Income Tax “according to the ordinary regime of the Tax Code,” with surcharges, interest, and possible penalties for tax evasion. It does not specify whether this ordinary regime is the 10% single payment or the general regime.
Builders and contractors
Article 14 modifies Article 70 of Regulation 139-98. Payments to contractors, engineers, master builders and related professionals for buildings and civil works, such as roads, highways, aqueducts and sewers, as well as masonry, carpentry, painting, joinery and plumbing services, are withheld on a presumed net income of 20% of the gross value, which leaves the withholding at 3% of the amount paid.
Article 15 exempts from the 5% withholding of Income Tax those State suppliers authorized as electronic issuers who invoice through e-CF, with the validations established by the DGII.
Articles 25 to 27 specify that accelerated depreciation applies to industrial use assets, even if the company is not classified as industrial, and include owners or managers of shopping centers and mixed-use complexes, for fixed equipment such as central air conditioning, elevators, escalators, power plants, pumping, water treatment and fire protection systems.
Applicants must keep the technical description, tariff classification, and proof of payment.
In advance, Article 23 stipulates that companies exceeding the threshold for their classification as micro, small, or medium-sized enterprises maintain their status until the end of the fiscal year, and that the DGII will determine this each year according to the classification published by the Ministry of Industry, Commerce, and SMEs.
The DGII has said that legal entities and sole proprietorships with income up to RD$11,985,137.42 are exempt from advance payments.
Rentals and holding companies
Article 16 limits the 15% withholding tax on rent to cases where the tenant is a legal entity or corporation and the property belongs directly to an individual. This withholding is a single, final payment; the tenant must provide certification to the landlord. It does not apply if the tenant is an individual or if the owner is a company.
The lessor, if an individual, must support their transactions with tax receipts, and the DGII may adjust the tax of related parties when it verifies a lack of economic substance or an undue tax advantage.
Paragraph III of article 11 defines the ownership of real estate by an entity, which the law exempts according to El Inmobiliario: the management, conservation, protection and possession of real estate assets within its patrimony, without intermediation, exploitation or commercialization with third parties.
The final phrase, which mentions "any other economic activity using or not the real estate", allows for two interpretations as to whether a company with other activities is included or excluded.
Some corrections
The text contains references that don't fit:
- Article 37 refers to Article 35, which deals with family property, when the context points to Article 36.
- Article 27 refers to Article 23 for industrial use criteria, which are in Article 25.
- Article 33 defines the direct line up to the second degree, while Article 37 speaks of the direct line from the second to the fourth degree.
- Article 24 begins with an incomplete sentence, and 40 refers to “this chapter” in a regulation that is not divided into chapters.
- Article 40 leaves the DGII with the task of issuing the general rules with the procedures, forms and means of payment.
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