Taken from Listín Diario
SANTO DOMINGO. - Buyers of low-cost housing have several government support mechanisms available for their first purchase, such as the ITBIS Bonus and the Land Bonus. However, despite the fact that this mechanism helps alleviate the burden on families, income and other outstanding issues continue to hinder the reduction of the housing deficit in the country.
Currently, a property valued at up to RD$5,025,380.75 is considered affordable housing, taking into account the inflation adjustment applied through a resolution and registration with the General Directorate of Internal Taxes (DGII). This type of housing is also exempt from the 3% transfer tax.
The incentive is used to complete the down payment on the home or applied to the loan principal, if the buyer has already made the down payment. Generally speaking, the Dominican government has designated "affordable housing" for construction projects aimed at reducing the housing deficit for several years, considering it one of the rights established in the National Development Strategy, in compliance with the United Nations Sustainable Development Goals (SDGs).
The issue has been discussed at the Housing Roundtable of the construction sector. However, despite the fact that costs have been reduced by between 11% and 15% in total value due to the application of government incentives that would be credited to the property, for a family in the low and middle income brackets, it remains tedious and extremely difficult to save 25% of these funds to buy a house, no matter how affordable its classification.
The requirement of having 25% of monthly family income is one of the standard financing requirements. It's important to remember that affordable housing in various development projects falls under Law 189-11, which governs the development of the mortgage market and trusts.
This mechanism is very different from other housing projects for people with limited resources, such as the Happy Family project, through which about 80% of the initial cost is covered by government assistance, according to official explanations given at the Ministry of the Presidency.
Buyers of low-cost housing have several government support mechanisms available for their first purchase, such as the ITBIS Bonus and the Land Bonus; however, despite the fact that this mechanism contributes to the burden it represents for families, income and other pending issues continue to hinder the reduction of the housing deficit in the country.
Impact
For Erika Mercedes, it would be ideal if the down payment on the home she wants to buy through a private financing project could be lower than the required amount. She says her salary is very close to the income tax exemption threshold (RD$35,000 per month), and the exempt amount is RD$34,685 per month. Combined with her husband's salary, their gross monthly income barely reaches RD$70,000, before deductions for social security (health and pension) and the cost of living, including housing, utilities, and education for their three children. Erika's case is just one example of the difficulties families still face in acquiring affordable housing in an urban location.
A human right
In its article 11.1, the SDGs have the mandate to ensure access for all people to adequate, safe and affordable housing and basic services and to improve slums by 2030.
Recently, the DGII reported that “so far this year 2024 and throughout 2023, the DGII has paid RD$1,986,346,097 for low-cost housing bonds, benefiting 9,038 families.”.
The Dominican government has delivered a total of RD$4,794,483,541.06 to 25,359 families who have benefited, since August 2020, to acquire low-cost housing through the housing voucher issued by the DGII (General Directorate of Internal Revenue)
So far in 2024 and throughout 2023, the DGII has paid RD$1,986,346,097 in low-cost housing bonds, benefiting 9,038 families.
In 2023, RD$1,652,760,418.09 was disbursed, helping 7,662 families acquire their first home—the highest number since the initiative's inception. In 2022, RD$844,681,058.96 was disbursed, benefiting 4,612 families. In 2021, RD$1,156,474,105.46 was disbursed to 7,059 families. And in 2020, RD$706,982,278.68 was disbursed, benefiting 4,650 families.
And now in 2024, RD$333,585,697.87 has already been disbursed, distributed to 1,402 families for the purchase of homes valued up to RD$5,025,380.75.
For the diaspora
In the previous government, under Danilo Medina, the initial payment to Dominicans residing abroad was eliminated during a stay by the former president in New York.
