What are the taxes on real estate?
In the Dominican Republic, purchasing and owning real estate comes with several taxes and fiscal obligations. Here is an overview of the main real estate taxes:
1. Property Transfer Tax
When purchasing a property, a 3% transfer tax is applied to the property’s market value, as assessed by the General Directorate of Internal Taxes (DGII). This tax must be paid by the buyer within six months of signing the sale deed.
(expat.com)
2. Annual Property Tax (IPI – Impuesto sobre la Propiedad Inmobiliaria)
Property owners are subject to a 1% annual property tax on the total value of their properties, if the value exceeds a threshold set by tax authorities. Properties below this threshold are exempt. This threshold is periodically adjusted to account for inflation.
(expat.com)
3. IPI Exemptions
Certain properties qualify for exemptions from the annual property tax:
- Agricultural properties: Farms and agricultural land are generally exempt from IPI.
- Senior homeowners: Owners aged 65 or older who have owned a single property for more than 15 years are exempt from this tax.
4. Value-Added Tax (ITBIS – Impuesto sobre Transferencias de Bienes Industrializados y Servicios)
The Dominican Republic applies an 18% VAT tax (ITBIS) on goods and services. While this tax does not apply to most real estate transactions, it may be included in some construction-related services. Basic necessities, such as medicines and certain food products, are exempt.
(ufe.org)
5. Inheritance Tax
If a property is transferred through inheritance, an inheritance tax of 3% is applied to the estate’s value after deductions. However, for non-resident foreigners, this tax may increase to 4.5%.
(republique-dominicaine.net)
