Closing Costs and Taxes When Buying Property in the Dominican Republic
When buying property in the Dominican Republic, it is important to budget for more than the advertised purchase price. Most buyers should allow approximately 4% to 6% of the purchase price for transfer tax, legal services, due diligence and administrative expenses.
The exact amount depends on the property value, the attorney’s fee, the structure of the transaction and whether the property qualifies for a CONFOTUR tax exemption.
This 2026 guide explains the main costs international buyers should consider when purchasing a house, villa, condominium or building lot in areas such as Sosúa, Cabarete and Puerto Plata.
Dominican Republic Closing-Cost Overview
- Property transfer tax: Normally 3%
- Legal and due-diligence fees: Commonly around 1% to 1.5%
- Registration and administrative expenses: Vary by transaction
- Annual IPI property tax: 1% above the applicable exemption threshold
- CONFOTUR properties: May qualify for significant tax exemptions
Because every transaction is different, buyers should request a written estimate from their attorney before signing a purchase agreement.
1. Property Transfer Tax
The principal government charge when transferring Dominican real estate is the Property Transfer Tax, known in Spanish as the Impuesto de Transferencia Inmobiliaria.
The standard rate is 3%. It is generally calculated using the higher of:
- The value stated in the deed of sale; or
- The property value determined by the Dominican tax authority, the DGII.
The tax must normally be paid before the title can be transferred and registered in the buyer’s name.
Transfer-tax example
If the applicable property value is US$300,000, a 3% transfer tax would equal approximately US$9,000. The actual payment is assessed and paid in Dominican pesos according to the amount accepted by the DGII.
A qualified attorney should confirm the applicable taxable value before closing. The official requirements can also be checked with the Dominican Internal Revenue Authority (DGII).
2. Legal and Due-Diligence Fees
Foreign buyers should use an independent Dominican real-estate attorney to investigate the property and manage the legal closing process.
Legal fees are often approximately 1% to 1.5% of the purchase price, although the amount varies according to the attorney, property and complexity of the transaction.
Legal services may include:
- Verifying the seller’s identity and legal authority to sell
- Reviewing the Certificate of Title
- Obtaining a title-status certification
- Checking for mortgages, liens, restrictions or legal claims
- Reviewing the survey or deslinde status
- Confirming outstanding property-tax obligations
- Reviewing condominium or homeowners’ association documents
- Preparing or reviewing the Promise of Sale
- Coordinating escrow and the final deed of sale
- Submitting the title-transfer documentation
Legal fees should always be confirmed in writing. Escrow, translations, powers of attorney, surveys and corporate services may be charged separately.
3. Registration and Administrative Expenses
Buyers may also encounter smaller expenses related to title registration, certifications, notarization, document legalization, translations, bank transfers and administrative processing.
These costs vary, so they should not be presented as one fixed percentage. Your attorney should provide an estimated closing statement showing the expected taxes, professional fees and administrative expenses.
4. Annual Property Tax (IPI)
The Impuesto al Patrimonio Inmobiliario (IPI) is an annual tax applied to qualifying real-estate holdings owned by individuals and trusts.
For individuals, the rate is 1% on the portion of the combined taxable real-estate value that exceeds the official exemption threshold. According to the DGII, the published threshold is currently RD$10,695,494.
This is not automatically calculated from the price advertised in US dollars. The DGII uses its registered taxable valuation, and the threshold can be adjusted. Buyers should therefore verify the current amount directly with the DGII or their attorney.
Additional exemptions may apply in certain cases, including:
- A qualifying property covered by a special law such as Law 158-01
- Certain rural land and agricultural improvements
- The sole real-estate property of an owner over 65, subject to the applicable conditions
- Certain qualifying foreign-source pensioners and rentiers
Learn more from the official DGII IPI information page.
5. CONFOTUR Tax Incentives
Some approved tourism developments qualify for incentives under Dominican Republic Law 158-01, commonly referred to as CONFOTUR.
Depending on the official approval granted to the development, a qualifying property may benefit from exemptions such as:
- The 3% property transfer tax
- The annual IPI property tax
- Certain other taxes covered by the approved tourism-project classification
The official CONFOTUR website states that qualifying new-construction projects may receive incentives for a period of up to 15 years following completion of construction.
Important: A property is not automatically exempt simply because it is new or located in a tourist area. The specific development must have the required CONFOTUR approval, and the attorney must confirm that the exemption applies to the unit being purchased and remains valid.
Buyers can review general information and approved-project classifications through the official CONFOTUR website.
6. Capital-Gains Tax When Selling
Capital-gains tax is generally a concern for the seller rather than an additional closing cost paid by the buyer.
The taxable gain is not necessarily the full difference between the original purchase price and the eventual selling price. The calculation can depend on the adjusted acquisition cost, documented improvements, inflation adjustments, ownership structure and the seller’s tax status.
Applicable rates may also differ between Dominican individuals, foreign individuals and companies. Sellers should obtain advice from a Dominican accountant or tax attorney instead of assuming that one fixed rate applies to every sale.
Example Closing-Cost Budget
For a property purchased for US$300,000 without a CONFOTUR exemption, a buyer could initially budget as follows:
- Transfer tax: Approximately US$9,000, assuming US$300,000 is the applicable taxable value
- Legal services: Approximately US$3,000 to US$4,500 when charged at 1% to 1.5%
- Administrative expenses: Variable
This produces an estimated starting range of approximately US$12,000 to US$13,500 plus variable administrative expenses. This example is illustrative only. The final calculation must be based on the DGII valuation, the attorney’s quotation and the circumstances of the transaction.
Who Normally Pays the Closing Costs?
The buyer normally pays the property transfer tax, legal fees and title-transfer expenses. The seller is generally responsible for settling existing liens, unpaid obligations and any applicable tax on the capital gain.
The Promise of Sale should state clearly which party is responsible for every cost. Buyers should never rely solely on a verbal agreement.
Can Foreigners Buy Property in the Dominican Republic?
Foreigners can generally purchase real estate in the Dominican Republic with the same ownership rights as Dominican citizens. Residency is not normally required to purchase property.
However, using an independent attorney, performing complete due diligence and transferring the title correctly are essential. Read our complete 2026 guide to buying property in the Dominican Republic for an explanation of the full purchasing process.
If you are comparing secure residential developments, visit our guide to gated communities in Sosúa and Cabarete.
Frequently Asked Questions
How much should I budget for closing costs in the Dominican Republic?
Most buyers should initially budget approximately 4% to 6% of the purchase price. The final amount depends on the taxable property value, attorney’s fees, administrative expenses and any applicable CONFOTUR exemption.
Is the property transfer tax always 3%?
The standard transfer-tax rate is 3%, generally calculated using the higher of the value in the deed of sale or the value determined by the DGII. A qualifying CONFOTUR property may be exempt.
Do foreigners pay additional property-transfer taxes?
Foreign buyers are generally subject to the same standard property-transfer tax rules as Dominican buyers. Nationality alone does not create a separate foreign-buyer transfer tax.
Do I pay IPI on the complete value of my property?
For an individual, the 1% IPI is normally applied only to the portion of the combined taxable real-estate value above the official exemption threshold. Different rules apply to trusts, companies and exempt properties.
Does every new development qualify for CONFOTUR?
No. The development must have official CONFOTUR approval, and buyers should have their attorney verify that the exemption applies to the specific property and is still valid.
Are legal fees included in the 3% transfer tax?
No. The transfer tax is paid to the government. Attorney, due-diligence, escrow and administrative expenses are separate.
Can I complete a purchase without a Dominican attorney?
Independent legal representation is strongly recommended. The attorney verifies the title, debts, survey status, contracts, tax position and legal transfer of ownership.
Plan Your Dominican Republic Property Purchase
Closing costs are manageable when they are calculated before signing the purchase agreement. Request a written estimate, use an independent real-estate attorney and verify any claimed tax exemption before transferring funds.
This article provides general information and does not constitute legal, accounting or tax advice. Dominican tax thresholds, requirements and interpretations can change. Always obtain transaction-specific advice from a qualified Dominican professional.
