SANTO DOMINGO.— Buying, building, or investing in real estate in the Dominican Republic generates tax obligations that begin from the moment a purchase agreement is signed and continue for years until the owner pays their annual property tax. Between these two points lies a complex tax system that few buyers—and not all developers—are fully aware of.
This guide offers you a complete tax map of the national real estate market: what taxes apply, when, on what basis, what exemptions exist and what has changed in the last two years.
The starting point: what taxes are involved in a real estate transaction?
When an individual or legal entity acquires real estate in the Dominican Republic, they face at least three direct and immediate tax obligations: the Real Estate Transfer Tax (ITI), registration fees with the Real Estate Jurisdiction, and the future annual Real Estate Property Tax (IPI). Depending on the buyer's profile or the type of project, additional charges may apply, such as the ITBIS (Value Added Tax) on professional services, capital gains withholding tax for the seller, and mortgage taxes.
The Tax Code (Law 11-92) provides the general framework, but the specific rules are defined by sector-specific laws—Law 173-07 on Tax Collection Efficiency, Law 108-05 on Real Estate Registration, and Law 18-88 on the Property Tax. The annual resolutions of the DGII (General Directorate of Internal Revenue) update the applicable amounts, thresholds, and exemptions each year.
1. Real Estate Transfer Tax (ITI): the 3% paid by the buyer
What it is and who pays for it
The Real Estate Transfer Tax, regulated by Law 173-07 on Revenue Collection Efficiency, taxes all real estate transactions. Its rate is 3% of the property's value, based on the higher of the appraisal by the DGII (General Directorate of Internal Revenue) or the value declared in the purchase agreement. This last point is important: if the market price of the property is higher than the official appraisal, the DGII will use that market value as the reference. Jordi Albertus
The ITI is the responsibility of the buyer, and its payment is a prerequisite for the Registry of Titles to issue the certificate in the name of the new owner.
Practical example: An apartment in Punta Cana valued at US$250,000 generates an ITI of US$7,500. If the price agreed between the parties is US$230,000 but the DGII valuation amounts to US$250,000, the tax is calculated on the higher figure.
New for 2025: obligation to declare the means of payment
As of May 1, 2025, real estate transactions exceeding RD$1,000,000.00 must record the payment method used, as stipulated by the DGII (General Directorate of Internal Revenue) through General Regulation 07-22. This measure aims to strengthen payment traceability in high-value transactions and combat practices such as the undervaluation of contracts. In practice, this means that all significant real estate sales must document whether payment was made via bank transfer, certified check, or another verifiable instrument.
Low-cost housing: the exemption threshold for 2026
Dominican legislation protects access to lower-cost housing through an exemption from the Transfer Tax (ITI) for buyers who purchase with a mortgage. According to Resolution DDG-AR1-2026-00001 of the DGII (General Directorate of Internal Revenue), the maximum value for qualifying as Low-Cost Housing and the value exempt from transfer tax for purchasers with mortgages is RD$5,450,851.12 for the 2026 fiscal year. This amount represents an inflation adjustment compared to the previous year.
Table 1. Real Estate Transfer Tax (2026)
| Concept | Detail |
|---|---|
| General rate | 3% on the higher value between the DGII appraisal and the contractual price |
| Responsible for payment | Buyer |
| Payment time | Before registration in the Real Estate Jurisdiction |
| Exemption for low-cost housing (2026) | Properties up to RD$5,450,851.12 acquired with a mortgage loan |
| Obligation to use a means of payment | Transactions exceeding RD$1,000,000.00 (from May 2025) |
| CONFOTUR Exemption | First sale in projects classified under Law 158-01 |
| Exemption Law 171-07 | First property acquired by pensioners or rentiers of foreign origin |
| Legal basis | Law 173-07 on Collection Efficiency; General Rule 07-22 DGII |
2. The Property Property Tax (IPI): the annual burden on the owner
What taxes are levied and how much does it cost?
The IPI is the annual property tax levied on those who own real estate in the Dominican Republic. Its legal basis is Law 18-88 and its amendments, and its administration is the responsibility of the DGII (General Directorate of Internal Revenue). The IPI establishes an annual rate of 1% applicable to the total value of real estate assets exceeding the exempt amount. For the 2026 fiscal year, this exempt amount totals RD$10,695,494.00, according to DGII Resolution DDG-AR1-2026-00001.
This threshold is adjusted annually for inflation, using the Central Bank's Consumer Price Index as a reference. For 2025, the exempt amount was RD$10,190,833, representing an increase of RD$504,661 from one year to the next.
Who pays and who is exempt
Homes, urban lots, and properties used for commercial, industrial, and professional activities are subject to tax if their value exceeds the exempt amount. Individuals are only taxed if the combined value of all their properties exceeds RD$10,695,494.00. Trusts, on the other hand, are taxed on any property that is not exempt, regardless of its value.
The following are exempt from the IPI, among others:
- Rural lands.
- The dwelling (and the land on which it is built) belonging to persons over 65 years of age, provided that it constitutes the only real estate asset of its owner.
- Pensioners and foreign-sourced income earners will receive a 50% reduction.
- Properties exempt under special laws, such as projects classified under Law 158-01 (CONFOTUR) during the exemption period.
Key dates for 2026
The IPI Affidavit must be submitted within the first sixty days of the year. The first installment must be paid no later than March 11th and the second installment no later than September 11th.
Practical example: A Dominican investor owns two apartments with cadastral values of RD$6,000,000 and RD$7,500,000 respectively. Their total real estate assets amount to RD$13,500,000. The excess over the exemption threshold is RD$2,804,506 (RD$13,500,000 − RD$10,695,494). The Property Tax (IPI) payable would be approximately RD$28,045 annually (1% of RD$2,804,506).
Table 2. IPI: Key parameters 2026
| Parameter | Value 2026 |
|---|---|
| Rate | 1% per year on the surplus |
| Exempt threshold for individuals | RD$10,695,494.00 |
| Threshold exempt from trusts | No general exemption (taxes are levied from the first peso) |
| Exemption for those over 65 years of age | In short, if it is the only property intended for housing |
| Foreign pensioners/rentiers | 50% reduction |
| Submission of sworn statement | First 60 days of the year |
| First installment | Until March 11 |
| Second installment | Until September 11th |
| Legal basis | Law 18-88 and amendments; Resolution DDG-AR1-2026-00001 |
3. The Property Registry: the gateway to legal certainty
What it is and why it matters to investors
The Dominican Republic's property registration system operates under Law 108-05 on Real Estate Registration, which establishes the Real Estate Jurisdiction as the body responsible for regulating the regularization and registration of all real property rights. Law 108-05 guarantees the legality of real estate transfers or encumbrances through the intervention of the State via the competent bodies of the Real Estate Jurisdiction. All rights registered in accordance with this law enjoy absolute protection and guarantee from the State and are imprescriptible.
This system—known as the Torrens system—means that registered ownership is what counts, not private contracts. For a foreign or domestic investor, this has a direct implication: no purchase agreement, however well-drafted, can replace registration with the corresponding Registry of Titles.
The chain of actions that generates registration costs
A standard real estate transaction can generate several registration moments, each with its own rights and fees:
Transfer of title certificate: The main act by which the Title Registry issues a new certificate in the name of the buyer. This procedure requires prior payment of the ITI (Tax on Real Estate Transfers) to the DGII (General Directorate of Internal Revenue). Registration fees are set by the Judicial Council and reviewed periodically.
Mortgage registration: If the purchase is financed with a mortgage loan, the mortgage must be registered with the Registry of Titles. This act generates a 2% tax on the mortgaged amount, as established by Law 173-07. For beneficiaries of Law 171-07, this tax is reduced by 50%.
Land surveying and subdivision: In the case of development projects, the subdivision of parcels into individual units—apartments, lots in a residential complex—requires a technical process before the National Directorate of Cadastral Surveys (DNMC), with its own fees. Technical Provision DNMC-DT-2025 updated the requirements and criteria for technical procedures before that directorate in 2025.
Document checklist for a standard transfer
☐ Original Title Certificate from the seller
☐ Notarized purchase agreement or public deed of sale
☐ Proof of payment of the ITI issued by the DGII
☐ Transfer application form (FI-DVB-006 from the DGII for tax management)
☐ Identity documents of the buyer and seller
☐ Proof of information on the means of payment (for transactions exceeding RD$1,000,000.00, from May 2025)
☐ Current IPI account statement (with no outstanding debts with the DGII)
☐ DGII appraisal or duly documented market value
☐ Notarized power of attorney (if either party is acting through a representative)
☐ Active RNC of the buyer and seller (legal entities)
4. Large incentive schemes: how the law reduces—or eliminates—the tax burden
Over the past 25 years, the Dominican Republic has built an ecosystem of incentive laws that, under certain conditions, can substantially reduce or even eliminate the taxes described in the previous sections. Understanding these laws is not a luxury reserved for large investors: many apartment buyers in tourist areas are already taking advantage of them without realizing it.
4.1 Law 158-01 (CONFOTUR): the most powerful incentive on the market
Law 158-01 on Tourism Development Promotion, and its amendments (Laws 184-02, 318-04, 253-12, and 195-13), establishes the most comprehensive tax incentive program in the Dominican real estate market. Its administrative body is the Tourism Development Council (CONFOTUR), which is part of the Ministry of Tourism (MITUR).
Who benefits?
The CONFOTUR program offers incentives for both developers and buyers of properties within approved projects. Not all properties in tourist areas are covered: the project must have been officially classified by CONFOTUR through a formal resolution.
Developer incentives:
Exemptions include national and municipal taxes on the transfer of real estate rights, the Luxury Housing and Undeveloped Land Tax (IVSS), taxes on the incorporation and capital increase of commercial companies, withholdings on national and international financing, and import taxes applicable to equipment, materials and movable goods necessary for the construction and initial outfitting of the project.
Incentives for the first buyer:
Properties acquired under Law 158-01 are exempt from the payment of the 3% transfer tax on the first sale, and from the payment of the IPI for a period of 10 or 15 years counted from the date of completion of the classified project.
The tax exemption period for companies engaged in the tourism activities indicated in the law is fifteen years, starting from the date of completion of the construction and equipping work of the project.
Critical points that buyers should know:
The incentives and benefits of the CONFOTUR Law only apply to the first purchase of the property. Not all properties located in tourist areas qualify for these incentives, even if their intended use is for tourism. To access these benefits, the developer must have applied for and received CONFOTUR approval from the Ministry of Tourism (MITUR).
This has a significant practical implication: in the secondary market, when an owner resells an apartment that was originally under CONFOTUR, the new buyer no longer benefits from the ITI or IPI exemptions. They pay the standard taxes.
Table 3. CONFOTUR benefits according to profile
| Profile | Tax benefit | Duration |
|---|---|---|
| Developer | ITBIS exemption on construction materials | Construction period |
| Developer | Exemption from import taxes on equipment | First equipment |
| Developer | Income tax exemption on the project | 15 years since completion |
| Buyer (first sale) | ITI Exemption (3%) | One time only |
| Buyer (first sale) | IPI Exemption | 10-15 years from completion |
| Buyer | Deduction of up to 20% of net taxable income for investment (5 years) | 5 years |
4.2 Law 171-07: the gateway for foreign pensioners and rentiers
Law 171-07 on Special Incentives for Pensioners and Rentiers from Foreign Sources, enacted on July 13, 2007, is the instrument designed to attract international retirees and rentiers as permanent residents in the country.
Who can apply?
The beneficiaries are pensioners or retirees with a monthly income of at least US$1,500.00 from a foreign pension, and those living off investments with stable and permanent income of at least US$2,000.00 per month from abroad. The program does not establish a minimum age.
Benefits of real estate ownership:
Beneficiaries receive exemption from paying real estate transfer taxes for the first property acquired, exemption from income tax on income declared to access the benefits of the law, a 50% exemption from mortgage taxes when the creditor is a regulated financial institution, and a 50% exemption from capital gains tax when the rentier is the majority shareholder of the company that pays that tax.
When selling properties to third parties, properties acquired by pensioners and rentiers under this law will be exempt from paying 50% of the capital gains tax.
Practical example: A 62-year-old French citizen receiving a monthly pension of €2,000 from a French company decides to establish permanent residency in La Romana. If she obtains Resident by Investment status under Law 171-07, her first property purchase will be exempt from the ITI (3%), and she will pay half the mortgage tax if she finances part of the purchase. Furthermore, the IPI she would otherwise be required to pay is reduced by 50%.
Table 4. Benefits of Law 171-07 on real estate
| Benefit | Condition |
|---|---|
| ITI Exemption (3%) | First property purchased only |
| 50% reduction in mortgage tax | The creditor must be a regulated financial institution |
| 50% reduction of the IPI | Applicable during residence under this law |
| 50% reduction in capital gains on resale | For properties acquired under the protection of the law |
| Income tax exemption on declared income | Only on the income used to qualify |
| Permanent residency in 45 days | Residency by Investment Program |
Source: Law 171-07 — Ministry of Finance; DGII — incentive legislation
4.3 Law 189-11: the trust as a real estate investment vehicle
Law 189-11 for the Development of the Mortgage Market and Trusts, enacted in 2011, established the legal framework for trusts in the Dominican Republic. Its purpose is to create the necessary legal structures and strengthen existing ones to develop the Dominican mortgage market, channeling savings resources toward long-term financing for housing and construction.
The impact on the real estate sector has been considerable. According to data from the trust industry cited in sector analyses, 71% of trust agreements in the country are dedicated to real estate development, making this instrument the financial backbone of a large portion of the off-plan projects currently being marketed.
Tax regime of the trust:
Income from trust assets is exempt from income tax and asset tax, with the exception of property tax on real estate that forms part of those assets and capital gains tax on the disposal of assets.
For low-cost housing projects structured as trusts: construction trusts created for the development of duly qualified Low-Cost Housing Projects are exempt from 100% of ISR and capital gains, any tax on bank transfers, and IPI during the project period.
Why the trust is of interest to the real estate investor:
Beyond the tax benefits, the trust offers key asset protection: the trust assets form a separate estate that cannot be seized by the developer's creditors. For those buying off-plan, this means that if the developer experiences financial difficulties, the funds paid toward the apartment are protected within the trust estate—provided the project was structured under this arrangement.
5. Law 16-95 on Foreign Investment: equal treatment, free repatriation
One element that is often overlooked in discussions about real estate taxation is Law 16-95 on Foreign Investment, which establishes the principle of national treatment: foreign investors have the same rights and obligations as nationals. This means that there are no special taxes, surcharges, or property restrictions for people of other nationalities who wish to acquire real estate in the Dominican Republic (with the exception of border zones and protected areas).
Additionally, the law allows the free repatriation of capital and profits generated by investments registered with the Central Bank. For foreign real estate investors, this has a direct impact: rental income or profits from a potential resale can be transferred out of the country without restrictions, provided the original investment was properly registered.
6. Master table: tax costs of a real estate transaction in the Dominican Republic
The following table consolidates the main taxes and costs generated by the purchase of a property in the Dominican Republic, without considering special exemptions.
Table 5. Tax map of a real estate sale (general regime)
| Tax / cost | Rate | Base | Who pays | Moment |
|---|---|---|---|---|
| ITI (Transfer Tax) | 3% | Higher between DGII valuation and contractual price | Buyer | Before registration |
| Annual IPI | 1% | Net worth exceeding RD$10,695,494 | Owner | March and September |
| Mortgage (registration) | 2% | Loan amount | Mortgage debtor | When registering the mortgage |
| Income tax on capital gains | 27% legal entities / 25% natural persons | Difference between selling price and adjusted acquisition cost | Seller | At the time of sale |
| ITBIS on professional fees | 18% | Notary, lawyer, or other fees | Buyer | By contracting the service |
| Registration fees (Real Estate Jurisdiction) | Rates according to Act 25-2015 CPJ | Value of the property or transaction | Applicant | Upon filing the file |
Notes: Income tax rates are updated periodically. Individuals residing in the Dominican Republic are taxed at a rate of 25% on real estate capital gains. Fees for the Real Estate Jurisdiction (Title Registry and Cadastral Surveys) are set by the Judicial Council.
7. Integrated case study: buying an apartment under CONFOTUR vs. in the conventional market
Scenario A – CONFOTUR Project in Bávaro:
A Colombian investor acquires an apartment for US$180,000 (approx. RD$10,800,000 at the reference exchange rate) in a project classified by CONFOTUR. It is the first sale of the property.
- ITI (3%): exempt — savings of US$5,400
- IPI during the first 15 years: exempt — annual savings of approximately RD$21,000 (if the value exceeds the exempt threshold, which in this case it would)
- Developer equipment import tax: exempt — benefit partially passed on to the property price
- Developer's income tax on the project: exempt for 15 years — a factor that may affect the final sale price
Scenario B – Residential property in Santo Domingo, conventional market:
A Dominican buyer acquires an apartment for RD$12,000,000 in the National District, without any special regime.
- ITI (3%): RD$360,000 (on RD$12,000,000)
- Annual IPI: 1% on RD$1,304,506 (excess over 2026 threshold) = RD$13,045 annually
- Title registration fees: variable according to the current tariff
- Legal fees (notary, lawyer): estimated 1-1.5% of the value + ITBIS 18% on those fees
The difference between the two scenarios illustrates why the CONFOTUR classification has become a central commercial argument for tourism projects.
8. Frequently Asked Questions — Part 1
Can a foreigner buy any property in the Dominican Republic without restrictions?
Generally speaking, yes. Law 16-95 establishes equal treatment between nationals and foreigners. The only exceptions are protected areas, land border zones (where there are historical restrictions), and military zones. For urban, tourist, and residential properties, there are no nationality restrictions on ownership.
Can the contract price differ from the price I declare to the DGII?
No. The DGII uses the higher of the contract price and the official valuation as its basis for calculation. Undervaluing the price in the contract to reduce the ITI (Tax on Real Estate Transfers) is not only illegal, but it can also trigger tax audits and penalties. General Regulation 07-22, in effect since May 2025, strengthens traceability by requiring the declaration of the payment method.
If I buy through a business entity, does the IPI (Property Tax) treatment change?
Yes, substantially. Legal entities (SRL, SA, etc.) and trusts do not benefit from the general exemption of RD$10,695,494.00. They are taxed from the first peso on the total value of their properties. This difference can be crucial when structuring an investment.
When does the IPI exemption expire for CONFOTUR projects?
The IPI exemption for the first buyer applies for a period of 10 or 15 years from the project completion date. Upon expiration, the owner begins to pay taxes under the general IPI regime.
What happens if I buy a property on the secondary market that was under CONFOTUR protection?
The ITI exemption only applies to the first sale. The second buyer pays 3% transfer tax on the higher of the appraised value and the contract price, regardless of whether the property originally benefited from the exemption.
What documents do I need to verify if a project is classified under CONFOTUR?
Interested parties can request the CONFOTUR resolution classifying the project from the developer or verify directly with the Ministry of Tourism. Every classified project has a resolution number and a start date for the exemption period.
Paying the Transfer Tax and registering the title is only the first step in a tax relationship that doesn't end with the signing of the contract. Anyone who owns real estate in the Dominican Republic assumes obligations that are renewed annually, quarterly, or every time that property generates income. Those who build and sell the property operate under a completely different tax regime than individual buyers. And those who rent it out—whether as an individual owner or through a company—must declare that income to the DGII (Dominican Republic's tax authority) in a specific manner.
This second part of El Inmobiliario 's real estate tax guide addresses these three profiles with the same rigor of official sources that guided the first installment: what the law says, what current resolutions require, what has changed recently, and what examples illustrate how each rule translates into concrete figures.
9. Income Tax and Rental Income
The landlord who rents: how are they taxed?
The rental of real estate generates taxable income under the Income Tax (ISR), regulated by the Tax Code (Law 11-92) and its amendments. The DGII treats rental income as ordinary income, and the treatment varies depending on whether the owner is an individual or a legal entity.
Individuals: Rental income is declared as part of the taxpayer's gross income. Resident individuals are taxed on their worldwide income at progressive rates ranging from 0% (for annual income up to RD$416,220 in 2026, according to Resolution DDG-AR1-2026-00001) to 25% for the highest income brackets. The landlord can deduct expenses necessary to generate and maintain the rental income—maintenance, insurance, and mortgage interest on the rented property—before calculating the taxable base.
Legal entities (SRL, SA): Commercial companies that generate rental income include it in their gross income and are taxed at the general corporate rate of 27% on net taxable income. Unlike individuals, companies do not have a base exemption: they are taxed from the first peso of profit.
Withholding tax: When the rent payer is a company (corporate tenant), it acts as a withholding agent and must withhold 10% of the monthly amount, which the landlord then credits against their annual income tax return. This mechanism is common in commercial leases of offices, retail spaces, and warehouses.
Practical example: A Dominican individual owns two apartments that they rent out for RD$45,000 per month each (RD$90,000 per month, RD$1,080,000 annually). After deducting estimated maintenance expenses (10%) and annual insurance (5%), their net taxable income from these rentals would be approximately RD$918,000. This amount is added to their other declared income to determine their corresponding progressive tax bracket.
10. Capital gains from real estate: when it is sold, the tax authorities also participate
What is capital gain and how is it calculated?
Capital gains are the positive difference between the sale price of a property and its adjusted acquisition cost. The Tax Code defines them as taxable income, and the DGII (General Directorate of Internal Revenue) has developed specific mechanisms for their declaration and payment in the real estate sector.
The adjusted cost is calculated based on the original purchase price, plus the cost of documented improvements made to the property, and then adjusted for accumulated inflation from the acquisition date to the sale date. This inflation adjustment is an important factor: it reduces the taxable base and, for properties acquired many years ago, can have a significant impact on the tax payable.
Applicable rates:
The general tax rate on capital gains from real estate is 27% for legal entities and 25% for resident individuals. These rates are applied to the net gain, not the total sale price.
Practical example: An investor purchased an apartment in 2015 for RD$4,500,000 and sold it in 2025 for RD$9,800,000. During that period, they made improvements totaling RD$800,000, and the accumulated inflation adjustment represents an increase in the base cost of approximately 45% (reference figure). The simplified calculation would be:
- Adjusted cost: RD$4,500,000 + RD$800,000 = RD$5,300,000 × 1.45 = RD$7,685,000
- Net profit: RD$9,800,000 − RD$7,685,000 = RD$2,115,000
- Income tax on capital gains (25%): RD$528,750
Without the inflation adjustment, the tax would have been on RD$4,500,000 of gross profit, which illustrates the importance of properly documenting both the acquisition cost and the improvements made.
Exemptions and reductions in capital gains
The two incentive legislations analyzed in Part 1 also affect capital gains:
Law 171-07 (pensioners and rentiers): As noted, when selling property acquired under this law, the beneficiary pays only 50% of the capital gains tax, provided that the permanent residence has been approved and is in effect.
Law 158-01 (CONFOTUR): Developers classified under this regime are exempt from income tax during the 15-year exemption period. After that period, they are taxed under the general regime.
11. The tax regime of the real estate developer
From a tax perspective, real estate developers are among the most complex taxpayers in the sector. They operate simultaneously as construction companies (with their own production costs and taxes), as property sellers (generating ITI for the buyer and capital gains for themselves), and, in many cases, as rental managers or condominium administrators.
Corporate income tax and deductible costs
Real estate development companies are taxed at the corporate rate of 27% on their net taxable income. The DGII (Dominican Republic's tax authority) allows the deduction of direct construction costs (materials, labor, professional fees), administrative and sales expenses, interest on project-related financing, depreciation of fixed assets, and certain financial expenses as business expenses. Documentation of these costs with valid tax receipts (NCF) is a prerequisite for their deductibility.
ITBIS in construction: what applies and what doesn't
The Tax on the Transfer of Industrialized Goods and Services (ITBIS), equivalent to VAT in other countries, has a differentiated treatment in the construction sector that generates frequent confusion.
What generates ITBIS: Professional services related to construction (architects, engineers, lawyers, notaries, consultants) are subject to ITBIS at a rate of 18%. The builder who contracts these services receives invoices with ITBIS and, if they are a registered taxpayer, can credit the ITBIS paid against the ITBIS they collect on their own sales of taxable services.
What is not directly subject to ITBIS: The sale of constructed real estate (apartments, houses, commercial spaces) is not subject to ITBIS under the general Dominican tax regime. The tax that applies to the transfer of the property itself is the ITI (3%), not ITBIS. This distinction is fundamental to understanding the cost structure of a project.
CONFOTUR Projects: As detailed in Part 1, imported materials and equipment for the construction and initial outfitting of projects classified under Law 158-01 are exempt from import VAT, which represents a significant reduction in production costs.
Does the Simplified Tax Regime (RST) apply to real estate?
The Simplified Tax Regime (RST) is a simplified tax system available to taxpayers whose income does not exceed certain thresholds. For 2026, the maximum income ceiling for remaining in the RST is RD$12,068,181.09. Since most real estate developers significantly exceed this figure, the RST has limited applicability in this sector, although it may be relevant for small landlords, individual property managers, or self-employed professionals in the sector.
12. Electronic invoicing and the real estate sector: Law 32-23 has arrived
Law 32-23 on Electronic Invoicing, enacted in 2023, mandates the gradual adoption of the Electronic Tax Receipt (e-CF) to replace paper tax receipts. Its implementation has progressed in phases, and the real estate sector is not exempt from its scope.
What does this mean for the sector?
All taxpayers who issue tax receipts for their services or sales —including real estate agencies, developers, landlords as legal entities, real estate brokers, law firms and notaries who advise on transactions— must migrate to the e-CF system according to the schedule established by the DGII.
For small taxpayers (individual landlords operating under individual tax identification numbers), the DGII has enabled simplified compliance methods. For development and real estate companies, the migration involves integrating their accounting systems with the DGII platform for issuing, validating, and storing electronic tax receipts (e-CFs).
Practical impact: Real estate transactions, rental agreements formalized by legal entities, brokerage fees, and professional services related to the transaction must be supported by valid electronic invoices (e-CF) for the expenses to be deductible to the DGII (General Directorate of Internal Taxes). Paper receipts are no longer sufficient to support a deduction for companies that have been required to migrate to the electronic system.
13. Importing construction materials: the role of the DGA
Large-scale projects frequently import materials, equipment, and finishes. The General Directorate of Customs (DGA) administers the Customs Tariff and applicable exemption regimes. For the real estate sector, the key points are:
General tariff on materials: Construction materials (cement, steel, ceramics, electrical equipment, elevators, etc.) are subject to tariffs that vary depending on the type of good and the trade agreements in place. The Dominican Republic has free trade agreements with the United States and Central America (DR-CAFTA), the European Union (EPA), and other partners, which may reduce or eliminate tariffs on certain materials depending on the country of origin.
Exemption under CONFOTUR: As previously stated, projects classified under Law 158-01 are exempt from import duties (including import VAT) on materials, machinery, and movable goods necessary for construction and initial outfitting. This exemption is managed through the Ministry of Finance and the DGA (General Directorate of Customs), and requires that the project have a valid CONFOTUR classification.
Procedure: The exemption is not automatic. The developer must submit the exemption request to the Ministry of Finance, along with the CONFOTUR resolution and a detailed list of goods to be imported, for each import they intend to cover under the benefit.
14. Tax checklist by investor profile
The following checklists summarize the most important obligations for each profile, ordered chronologically from the investment decision to the continuous management of the property.
Checklist A: Individual Buyer (natural person, home or investment)
Before you buy:
☐ Verify if the project has a CONFOTUR classification (request the resolution from the developer)
☐ Confirm the property's appraised value by the DGII
☐ Evaluate if you qualify for the low-cost housing exemption (up to RD$5,450,851.12 with a mortgage loan in 2026)
☐ If you are a foreign pensioner or annuitant, apply for the benefits under Law 171-07 before closing
☐ Confirm active RNC (for individuals with economic activity) or identity card
At the close of the transaction:
☐ Pay the ITI (3%) to the DGII before filing the transfer file
☐ Declare the means of payment if the transaction exceeds RD$1,000,000.00 (General Rule 07-22)
☐ Verify that the title certificate is free of liens and encumbrances
☐ Register the mortgage (if applicable) with the Registry of Titles and pay 2% of the amount
After the purchase:
☐ Include the property in the IPI Affidavit (within the first 60 days of the year)
☐ Pay the two IPI installments: March 11 and September 11
☐ If you rent the property: declare the income as rent in the annual ISR return
☐ Keep invoices for improvements made (they are used to reduce capital gains when selling)
Checklist B: Foreign Investor
Before investing:
☐ Register the investment with the Central Bank (to guarantee future free repatriation)
☐ Evaluate eligibility under Law 171-07 if you meet the requirements for pensioners or annuitants
☐ Check if there is a double taxation agreement between the Dominican Republic and your country of tax residence (currently one exists with Spain, among others)
☐ Verify the treatment of rental income in your country of tax residence
In the transaction:
☐ Ensure the property has a registered title (Torrens system) — not unregistered private contracts
☐ Verify that the project is classified under CONFOTUR if you expect exemptions from the regime
☐ Document the origin of funds (anti-money laundering requirement for high-value transactions)
Ongoing obligations:
☐ Annual IPI (if assets exceed the exempt threshold, remembering that individuals have a threshold and legal entities do not)
☐ ISR on rental income generated in the DR (principle of territoriality)
☐ Declare capital gain at the time of sale
Checklist C: Real Estate Developer
Project structuring phase:
☐ Evaluate if the project can be classified under CONFOTUR (submit application to MITUR)
☐ Determine if the project qualifies as low-cost housing (trust with exemptions under Law 189-11)
☐ Establish the construction trust to protect the funds of buyers in plans
☐ Obtain the corporate RNC and be up to date with the DGII
☐ Register the company and the project with the corresponding authorities (Ministry of Industry, municipality, etc.)
Construction phase:
☐ Issue valid e-CFs for all services received (architects, engineers, consultants)
☐ Manage import exemptions with the Ministry of Finance (if the project has CONFOTUR)
☐ Maintain detailed cost accounting for each project (basis for ISR deductions)
☐ Comply with labor withholdings (employee ISR, TSS) during construction
Sales phase:
☐ Document the ITI paid by each buyer (although it is the buyer's responsibility, organized documentation facilitates the process)
☐ Issue tax receipts for sales revenue, if applicable
☐ File the annual corporate income tax return with the income for the period
☐ Declare and pay the IPI on unsold properties that remain in the corporate inventory
15. The institutions that the real estate investor should know
Tax compliance in the Dominican real estate sector involves several institutions whose responsibilities complement each other. Understanding these institutions reduces processing times and prevents errors caused by contacting the wrong agency.
Table 6. Key institutions and their tax powers in the real estate sector
| Institution | Relevant competition for the sector | Portal |
|---|---|---|
| DGII (General Directorate of Internal Taxes) | ITI, IPI, ISR, ITBIS, e-CF, electronic invoicing | dgii.gov.do |
| Treasury | Tax exemptions under special laws; tax policy | hacienda.gob.do |
| Real Estate Registry / Title Registry | Registration of transfers, mortgages, title certificates | ri.gob.do |
| CONFOTUR / MITUR | Classification of tourism projects; incentive administration Law 158-01 | confotur.mitur.gob.do |
| DGA (General Directorate of Customs) | Importation of materials; tariff exemptions | aduanas.gob.do |
| Central Bank | Foreign investment registration; free repatriation | bancentral.gov.do |
| ProDominicana | One-stop shop for foreign investors; incentive advice | prodominicana.gob.do |
| Superintendency of Banks | Regulation of trust entities; mortgage supervision | sb.gob.do |
| Superintendency of Securities (SIMV) | Regulation of FIDEIs and mortgage securities | simv.gob.do |
16. An evolving tax ecosystem: what is changing
The Dominican Republic's real estate tax framework is not static. Several regulatory changes have occurred in the last two years that the sector should closely monitor.
General Standard 07-22 and Payment Traceability (May 2025): The requirement to declare the means of payment in transactions exceeding RD$1,000,000.00 marks a shift towards greater transparency and fiscal control in the real estate market. It is part of a regional trend to combat undervaluation and money laundering through real estate.
Electronic invoicing (Law 32-23): The migration to e-CF is transforming the administrative operations of real estate companies, developers, and specialized law firms. Those who do not issue e-CFs when required cannot deduct expenses with the DGII (General Directorate of Internal Revenue), making compliance with this regulation both a tax and financial matter.
Law 30-26 (enacted in 2026, currently under review by the sector): This legislation, which modifies aspects of the tourist zone regime and the regulation of short-term rentals, introduces new restrictions that directly affect the CONFOTUR model. The sector continues to analyze its implications—particularly for mixed residential-tourist projects—and El Inmobiliario has covered these implications in recent articles.
Annual Adjustment of Property Tax (IPI) and Low-Cost Housing Thresholds: Every January, the DGII (General Directorate of Internal Revenue) issues its inflation adjustment resolution. The IPI and low-cost housing thresholds change annually. What generated a payment obligation in 2025 may be exempt in 2026, and vice versa. Consulting the resolution in effect at the beginning of each fiscal year is essential.
17. Frequently Asked Questions — Part 2
Do I have to pay income tax in the Dominican Republic if I'm a foreigner and I rent out my apartment here?
Yes. The Dominican Tax Code establishes the principle of territoriality for income from Dominican sources: income generated within the national territory is subject to local taxation, regardless of the beneficiary's tax residency. A non-resident foreigner who rents out a property in the Dominican Republic must declare this income to the DGII (Dominican Republic's tax authority). The existence of a double taxation agreement with your country may reduce this tax burden.
What happens if I own an apartment in a CONFOTUR project but rent it out as an Airbnb?
Law 85-25 on rentals excludes tourist rentals of up to 90 days from its scope, but the tax treatment of this income is separate: short-term rental income remains taxable income for the DGII (Dominican Republic's tax authority), regardless of whether the property is in a CONFOTUR project. The CONFOTUR exemption applies to the ITI (Tax on Real Estate Transfers) and IPI (Tax on Property Transfers), not to the ISR (Income Tax) on rental income.
How is a foreign investment registered with the Central Bank?
The Central Bank of the Dominican Republic maintains a registry of foreign investments for the purpose of the free repatriation of capital. The investor must submit to the Central Bank the documents that prove the funds have entered the country (bank transfers, foreign exchange receipts) and the contract or title documenting the investment. This registration is not a prerequisite for acquiring the property, but it is a condition for being able to repatriate the capital later without restrictions. The Central Bank's website details the current procedure.
Is the Property Tax (IPI) I pay as the owner deductible as an expense if I rent the property?
Yes. As long as the property is used to generate income (rent), the IPI paid is a deductible expense for the purposes of calculating Income Tax (ISR) on that income. Deductibility requires documentation: the IPI payment receipt issued by the DGII (General Directorate of Internal Taxes).
When do I have to pay income tax on capital gains?
Income tax on real estate capital gains is declared and paid at the time of the transaction (sale), not at the end of the fiscal year. The buyer is obligated to withhold a portion of the price if the seller is a legal entity under certain circumstances, but in transactions between individuals, the responsibility for declaring the tax falls directly on the seller. The DGII (General Directorate of Internal Revenue) requires payment of this tax as a condition for processing the transfer of the title certificate.
What happens if I don't declare and pay the Property Tax (IPI)?
The DGII (General Directorate of Internal Revenue) can impose late payment charges, interest, and even penalties. Additionally, the IPI debt can become an obstacle when selling property, as the institution requires that all tax obligations be up to date to process any transfer. Property tax debts can also result in liens or encumbrances being registered in the Property Registry.
How can I tell if a project developer has established a construction trust?
The construction trust must be registered with the Superintendency of Banks (if the trustee is a bank or savings association) or with the Superintendency of Securities (if it is a securities intermediary). The buyer has the right to request a copy of the trust agreement and the name of the trustee from the developer. The Superintendency of Banks publishes a list of entities authorized to act as trustees on its website.
18. Real Estate Tax Glossary
CONFOTUR: Tourism Development Council, attached to the Ministry of Tourism. It administers the incentives of Law 158-01.
DGA: General Directorate of Customs. Administers import tariffs and exemptions.
DGII: General Directorate of Internal Taxes. It administers the ITI, the IPI, the ISR, the ITBIS and electronic invoicing.
e-CF: Electronic Tax Receipt. Valid invoice format under Law 32-23.
FIDEI: Real Estate Investment Trust. A financial instrument created by Law 189-11 that allows investment in real estate projects through the stock market.
IPI: Real Estate Property Tax. Annual rate of 1% on the value of real estate assets that exceeds the exempt threshold.
ISR: Income Tax. It taxes corporate profits (27%) and the income of individuals (progressive rate up to 25%).
ITI: Real Estate Transfer Tax. Rate of 3% on the higher value between the DGII appraisal and the contractual price, paid by the buyer.
ITBIS: Tax on the Transfer of Industrialized Goods and Services. Equivalent to VAT; general rate of 18%. Applies to professional services in the sector.
NCF / e-CF: Tax Receipt Number / Electronic Tax Receipt. Documents that support deductible expenses before the DGII.
RST: Simplified Tax Regime. Income Tax modality for taxpayers with income less than RD$12,068,181.09 in 2026.
Torrens System: Real estate registration system implemented by Law 108-05, under which the registered right is the only one that the State recognizes and guarantees.
References
- General Directorate of Internal Taxes (DGII)
- Treasury
- Real Estate Registry (Real Estate Jurisdiction)
- Ministry of Tourism (MITUR) / CONFOTUR
- Ministry of Housing, Habitat and Buildings (MIVHED)
- Superintendency of Banks
- Superintendency of the Securities Market (SIMV)
- Central Bank of the Dominican Republic (BCRD)
- ProDominicana
- General Directorate of Customs (DGA)
- National Congress of the Dominican Republic
You might be interested in our "Investor Guides" section:
- Law 85-25: Complete guide to the new rental law in the Dominican Republic
- Law 30-26: Complete guide for the real estate, construction and tourism sectors
- How to invest in the Dominican Republic's tourism sector in 2026: a guide for foreign investors
- Complete guide to the tax treaty between the Dominican Republic and Spain to avoid double taxation
