How Much Are Closing Costs in the DR?
Budgeting for a property in Sosúa or Cabarete involves more than just the sticker price. In the Dominican Republic, buyers should expect to pay between 4% and 5% of the purchase price in total closing costs.
1. Transfer Tax (3%)
The most significant one-time cost is the Transfer Tax (Impuesto de Transferencia). This is a flat 3% tax based on the government-appraised value of the property. This must be paid to the DGII (tax office) to transfer the title into your name.
2. Annual Property Tax (IPI)
The IPI (Impuesto sobre la Propiedad Inmobiliaria) is an annual tax of 1%.
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Tax-Free Threshold: For 2026, properties valued below approximately US$175,000 are exempt. You only pay the 1% on the value above this amount.
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Example: If your home is worth US$200,000, you only pay 1% on the US$25,000 difference.
3. Legal & Notary Fees
A reputable real estate lawyer typically charges between 1% and 1.5% of the purchase price. This covers the due diligence, escrow management, and the final deed of sale.
4. CONFOTUR Incentives
If you buy a property in a project certified under CONFOTUR, you may be exempt from the 3% transfer tax and the 1% annual property tax for up to 15 years. This is a massive saving for investors!
