Guide to Taxes and Legal Requirements for Buying Property in the DR

Buying in the Dominican Republic: safe, with clear rules

The Dominican Republic is one of the few countries in the Caribbean where a foreigner can buy property with the same rights as a Dominican. You don’t need residency or citizenship, and the title you receive is the same Certificate of Title any local would receive.

But “the same rights” also means the same obligations: taxes, legal steps and paperwork that, if done wrong — or late — can cost you money and peace of mind.

This guide is what we explain to every foreign or diaspora client before they sign. Read it through once and you’ll be clear on 90% of the process.

1. Taxes you pay when you BUY (one time)

Transfer tax — 3%

When the title is transferred to your name, the DGII (the Dominican tax authority) charges 3% of the property’s value (the higher of the sale price and the DGII’s official appraisal). The buyer pays this tax, and it must be settled before the Title Registry issues the new certificate.

Closing costs — another 1% to 2%

These include legal fees, stamps, certifications, surveying if needed, and registration. A serious lawyer gives you a written breakdown before you sign.

Rule of thumb: budget 4% to 5% of the price to close the purchase, on top of the price itself.

2. The tax you pay EVERY YEAR: IPI

The IPI (Impuesto al Patrimonio Inmobiliario) is the annual real estate tax. It’s the most important thing to understand if you buy in the DR.

How much is it?

1% per year on the value above the exempt threshold. For 2026 the threshold is adjusted for inflation every year — your lawyer or accountant will confirm the current figure. Only the excess is taxed, not the total value.

Who pays it?

• Individuals: only if the total value of your properties in the DR is above the exempt threshold.
• Companies: 1% on the total value, with no exempt threshold.

When is it paid?

In two installments: March 11 and September 11 each year. Paying late adds surcharges and interest.

Important IPI exemptions

• The only home of owners over 65 who have owned it for more than 15 years.
• Rural properties used for farming.
• Properties under CONFOTUR — key for investors (see below).

3. CONFOTUR: the exemption that changes the math

Law 158-01 (CONFOTUR) exempts approved tourism projects in priority development areas (Punta Cana, Bávaro, Samaná, Puerto Plata, Las Terrenas, among others) from taxes.

What you’re exempt from if you buy in an approved CONFOTUR project:

• IPI (1% per year) — exempt for 15 years.
• Transfer tax (3%) at purchase — exempt.
• Income tax on rentals — exempt for the period of the law.

What to check before believing a project is CONFOTUR

• Ask for the CONFOTUR approval resolution, with its number and date.
• Confirm that your specific unit is included (it isn’t enough for the project to be included in general).
• Check the time left on the exemption — it counts from the approval, not from your purchase.

Buying in a real CONFOTUR project can save you tens of thousands of dollars over the life of your investment. Buying one you assume qualifies, without checking, can cost you the same.

4. Taxes if you rent it out

Long-term rental or Airbnb

Rental income is subject to income tax (ISR):

• Individuals: a progressive scale up to 25%.
• Companies: 27% of net income.

Documented operating expenses (management, maintenance, utilities, depreciation) can be deducted.

ITBIS on short-term rentals

Tourist rentals of under 90 days are subject to ITBIS (18%), the Dominican sales tax, which you must charge the guest and pay to the DGII. In many cases Airbnb withholds and pays this ITBIS for you — confirm with your accountant.

5. Taxes when you SELL

Capital gains — 27%

The difference between the sale price and your adjusted tax basis (purchase price plus documented improvements, adjusted for inflation) is taxed at 27%.

How to legally reduce it:

• Keep invoices for every improvement (remodels, additions, built-in furniture).
• Put the real purchase price in the contract — undervaluing it to pay less transfer tax costs you dearly when you sell.
• Check the inflation adjustment the DGII recognizes each year.

6. The legal process, step by step

1. Title due diligence

Your lawyer checks at the Title Registry that the seller is the real owner, that the certificate is surveyed and that there are no liens, mortgages or claims against it.

2. Certificate of legal status

An up-to-date certificate of the property’s legal status is requested before signing.

3. Promise of sale agreement (optional but recommended)

It sets the price, timeline and conditions. A deposit (10%) is usually paid at this stage.

4. Final sale agreement

Signed before a notary, with legalized signatures. This is the document filed with the Title Registry.

5. Payment of the 3% transfer tax

Paid at the DGII before registration.

6. Registration and the new Certificate of Title

Timing varies by jurisdiction — typically 30 to 90 days.

Never pay the full price before the title is in the process of being transferred to your name. Payments are tied to legal milestones, not verbal promises.

7. Buying as a foreigner or from the diaspora

Documents you need

• A valid passport (foreigners) or cédula (Dominicans).
• An RNC or tax ID number in the DR — your lawyer can get it if you don’t have one.
• If you buy remotely, a notarized and apostilled power of attorney for your legal representative.

You can buy in your own name or set up a structure

• In your own name: simpler, with no annual corporate costs, but the IPI threshold applies to the combined value of all your properties.
• Through a company (SRL or SA): useful for portfolios, estate planning, or if you’ll rent commercially. It has annual upkeep costs.

Your lawyer or accountant will recommend the right structure for your case — there’s no single answer.

Taking your money out

You can move your money out of the DR without restrictions when you sell, as long as you can document the legal origin of the funds you bought with. Keep your incoming wire transfers from day one.

8. The most expensive mistakes we see

• Buying without your own lawyer. The seller’s lawyer doesn’t represent you.
• Undervaluing the price in the contract to pay less transfer tax. You pay less today and much more when you sell.
• Paying the IPI late. Surcharges pile up and complicate any future sale.
• Assuming a project is CONFOTUR without written proof.
• Not keeping receipts for improvements. When you sell, without invoices you can’t deduct anything.
• Buying remotely without a visit or someone you trust on the ground.

Frequently asked questions

Can I buy property in the DR as a foreigner without residency?

Yes. You don’t need residency or citizenship. You buy with your passport and a tax ID (RNC).

How much should I budget on top of the price?

Between 4% and 5% of the purchase price for transfer tax, legal fees and registration.

Does the IPI apply to every property?

No. For individuals it applies only when the total value is above the annual exempt threshold; for companies, on the total value. Properties under CONFOTUR are exempt for 15 years.

Can I pay taxes from abroad?

Yes. The DGII takes online payments, and your accountant or lawyer can pay them for you with a power of attorney.

What happens if I inherit a property in the DR?

The inheritance tax (3%) applies to the property’s value, with specific deductions and deadlines. Planning the ownership structure when you buy saves a lot later.

This guide is for information only and does not replace personalized legal or tax advice. Every case has details that only a Dominican lawyer and accountant can assess with your documents in hand.

Before you sign, get these answers in writing

• What DGII value will my 3% transfer tax be calculated on?
• Is the property surveyed and free of liens?
• Is it under CONFOTUR? How many years of exemption are left?
• What will my estimated annual IPI be?
• Which purchase structure suits me: personal or through a company?
• Who pays the taxes, and by when?

The good news: with the right advice, buying in the Dominican Republic is one of the clearest processes in the Caribbean. The bad news: without advice, the same taxes that are manageable turn into expensive surprises. Choose your team well before you choose the property.