Dominican Republic Property Taxes and CONFOTUR Benefits
Property taxes in the Dominican Republic are relatively straightforward, but buyers should understand the difference between the one-time property transfer tax, the annual IPI property tax and the special exemptions available to certain approved tourism projects under CONFOTUR.
For 2026, individuals generally pay an annual IPI tax of 1% only on the portion of their combined taxable Dominican real-estate holdings that exceeds RD$10,695,494. A property inside an officially approved CONFOTUR project may qualify for valuable exemptions, but those benefits must be verified for the specific development and property.
This guide explains how IPI works, who may be exempt and what buyers should investigate before relying on a CONFOTUR tax benefit.
Dominican Republic Property Taxes at a Glance
- Property transfer tax: Normally 3% when ownership is transferred
- Annual IPI rate for individuals: 1% above the applicable exemption threshold
- 2026 IPI threshold for individuals: RD$10,695,494
- IPI calculation: Based on combined taxable real-estate holdings, not automatically on each property separately
- IPI payment: Normally divided into two annual instalments
- CONFOTUR: Qualifying properties may receive exemptions from transfer tax and IPI
- Automatic exemption for new construction: No
What Is the Annual IPI Property Tax?
The Impuesto al Patrimonio Inmobiliario (IPI) is an annual tax administered by the Dominican Internal Revenue Authority, known as the DGII.
For an individual, the standard rate is 1% on the portion of the combined taxable real-estate value that exceeds the annual exemption threshold.
For 2026, the DGII publishes an exemption threshold of:
RD$10,695,494
The threshold is expressed in Dominican pesos and can be adjusted. It is therefore better to use the official peso amount rather than a fixed US-dollar conversion that changes with the exchange rate.
Does the IPI Threshold Apply to Each Property?
No. For individuals, the threshold generally applies to the owner’s combined taxable Dominican real-estate holdings.
For example, owning two properties valued by the DGII at RD$7,000,000 each may produce a different result from looking at either property separately. The combined taxable value would be RD$14,000,000 before considering any applicable exemptions.
This is especially important for buyers purchasing a second home, rental property or building lot.
How Is IPI Calculated?
The simplified calculation for an individual is:
- Add the DGII taxable values of the owner’s applicable real-estate holdings.
- Subtract the current exemption threshold.
- Apply the 1% annual rate to the remaining taxable amount.
2026 IPI calculation example
Assume an individual owns qualifying Dominican real estate with a combined DGII value of RD$15,000,000:
- Combined taxable value: RD$15,000,000
- 2026 exemption threshold: RD$10,695,494
- Amount above the threshold: RD$4,304,506
- Annual IPI at 1%: Approximately RD$43,045.06
This is an illustrative calculation only. The actual assessment depends on the values and exemptions recognized by the DGII.
Is IPI Based on the Purchase Price?
Not necessarily. The amount paid to the seller, a bank appraisal and the value registered with the DGII are not always identical.
The DGII maintains taxable property valuations for IPI purposes. Buyers should ask their attorney to verify:
- The value currently registered with the DGII
- Whether the property has outstanding IPI obligations
- Whether the owner has other properties affecting the threshold
- Whether a legal exemption applies
- How the purchase may change the buyer’s combined taxable holdings
When Is IPI Paid?
The annual IPI is normally paid in two instalments. According to the DGII, the standard payment deadlines are:
- First instalment: March 11
- Second instalment: September 11
Owners should confirm the applicable dates and outstanding balance directly with the DGII or a qualified Dominican tax professional.
Official information is available on the DGII IPI information page.
Which Properties and Owners May Be Exempt from IPI?
Exemptions can depend on the owner, property type and applicable legislation. The DGII identifies examples including:
- Combined taxable real-estate holdings at or below the applicable threshold
- The sole real-estate property of an owner aged 65 or older, subject to the required conditions
- Certain rural land and agricultural improvements
- A 50% exemption for qualifying pensioners and rentiers receiving income from foreign sources
- Properties covered by special legislation, including qualifying projects under Law 158-01
An exemption should never be assumed. The owner or buyer should obtain confirmation that the legal requirements are satisfied.
How Does IPI Work for Trusts or Companies?
The individual exemption threshold does not necessarily apply to every ownership structure.
The DGII states that qualifying trusts are generally subject to a 1% IPI charge on the total taxable real-estate value rather than only the portion above the individual threshold.
Companies may be subject to different tax and asset-reporting rules. Purchasing through a company is therefore not automatically more tax-efficient than purchasing personally.
Before selecting an ownership structure, obtain advice about annual filings, accounting expenses, asset taxes, rental income, succession planning and the tax consequences of a future sale.
What Is CONFOTUR?
CONFOTUR is the Dominican Tourism Development Council responsible for applying incentives under Tourism Development Law 158-01 and its amendments.
The objective is to encourage qualifying tourism investment and development. Projects must go through an official approval and classification process. A project does not qualify merely because it is new, close to a beach or marketed to foreign buyers.
Buyers can review official information through the CONFOTUR website of the Dominican Ministry of Tourism.
Which Tax Benefits Can CONFOTUR Provide?
Depending on the official classification and scope of the approval, a qualifying project may benefit from exemptions that include:
- The 3% property transfer tax
- The annual IPI property tax
- Certain national and municipal taxes connected with the approved project
- Certain construction, equipment or project-development taxes
The official CONFOTUR information states that qualifying new-construction projects may receive incentives for a period of up to 15 years following completion of construction.
However, the exact benefits available to an individual property buyer depend on the approved project, the property, the purchaser’s position and the remaining exemption period.
Does Every New Development Qualify for CONFOTUR?
No. New construction and CONFOTUR approval are not the same thing.
Before relying on an advertised exemption, buyers should request:
- The official name of the approved project
- The CONFOTUR resolution or classification documentation
- Confirmation that the particular phase or unit is included
- The official start and expiration dates of the exemption
- Confirmation that the buyer qualifies for the applicable benefit
- Written verification from the buyer’s independent attorney
A sales brochure or verbal statement should not be treated as sufficient proof of a tax exemption.
Does a Resale Property Receive a New 15-Year Exemption?
Not automatically. A CONFOTUR exemption is connected to the project’s official approval and applicable period. Purchasing a resale property does not normally restart a completely new 15-year term.
A resale buyer may receive only the remaining portion of an existing benefit, if it is transferable and all applicable conditions are satisfied.
The attorney should confirm the remaining term and whether the benefits continue after the resale.
Does CONFOTUR Automatically Exempt Rental Income?
Buyers should not assume that purchasing a CONFOTUR property automatically makes all personal rental income tax-free.
The incentives granted to the approved development, promoter or qualifying investor may not be identical to the tax treatment of an individual owner’s rental activity. Rental income, short-term accommodation and business activities can create separate tax and reporting obligations.
Ask a Dominican accountant or tax attorney to review the intended rental structure before advertising or operating the property as a rental.
How Much Can CONFOTUR Save a Buyer?
The most immediate saving can be the exemption from the standard 3% property transfer tax.
Illustrative transfer-tax saving
If the applicable taxable value of a qualifying property is US$300,000, the standard 3% transfer tax would be approximately US$9,000. A valid CONFOTUR transfer-tax exemption could therefore create a substantial upfront saving.
Further savings may arise from an IPI exemption during the remaining approved period. The actual amount depends on the DGII valuation, ownership structure, other properties owned and the precise terms of the exemption.
Property Transfer Tax Versus Annual IPI
These are two separate taxes:
- Property transfer tax: A one-time tax normally associated with registering the purchase in the buyer’s name.
- IPI: A recurring annual tax that may apply to qualifying real-estate holdings.
This page focuses primarily on ongoing property taxation and CONFOTUR. For purchase-related expenses, read our complete guide to closing costs and transfer taxes in the Dominican Republic.
Questions to Ask Before Buying a CONFOTUR Property
- Is the project officially approved, or has an application only been submitted?
- Does the approval cover this exact building, phase or unit?
- Which taxes are specifically exempt?
- When did the exemption period begin?
- How many years remain?
- Does the exemption apply to the first buyer only or also to a resale buyer?
- Has the exemption already been registered or recognized by the DGII?
- Are there conditions the buyer must satisfy?
- Are rental earnings treated separately?
Property Taxes for Foreign Owners
Foreign property owners do not normally pay a higher IPI rate solely because they are foreign. The applicable treatment depends more on the taxable value, ownership structure, other real-estate holdings and available exemptions.
Foreign owners should keep their Dominican contact, tax and ownership information current. Those planning to rent, sell or transfer the property should obtain advice about the additional reporting and tax consequences.
Our guide explaining property ownership for foreigners in the Dominican Republic covers residency, documentation, title registration and due diligence.
Frequently Asked Questions
What is the IPI property-tax rate in the Dominican Republic?
For individuals, the annual IPI rate is generally 1% on the portion of combined taxable real-estate holdings above the applicable exemption threshold.
What is the IPI exemption threshold for 2026?
The DGII publishes a 2026 threshold of RD$10,695,494 for individuals. The threshold applies to combined qualifying real-estate holdings and may be adjusted in future years.
Is IPI calculated separately for each property?
Not normally for an individual. The DGII generally considers the combined taxable value of the owner’s applicable Dominican real-estate holdings before applying the individual threshold.
What taxes can CONFOTUR exempt?
Depending on the official project approval, qualifying properties may receive exemptions from the 3% property transfer tax, annual IPI and certain other taxes covered by the project’s classification.
Does every new development have CONFOTUR?
No. The project must receive official approval. Buyers should verify the resolution, included phase or unit, applicable benefits and remaining exemption period with an independent attorney.
Does a CONFOTUR exemption last 15 years from my purchase date?
Not necessarily. The period is connected to the project’s official approval and completion, not automatically to each buyer’s purchase date. A resale buyer may receive only the remaining term.
Does CONFOTUR make all rental income tax-free?
No. Buyers should not assume that project-level incentives automatically exempt an individual owner’s rental income. Rental activities can have separate tax and reporting obligations.
Do foreigners pay higher annual property taxes?
Foreign owners do not normally pay a higher IPI rate solely because of nationality. The assessment depends on taxable value, ownership structure and applicable exemptions.
Verify Taxes Before Purchasing
Dominican property taxes can be favorable, particularly when a legitimate CONFOTUR exemption applies. The important point is to verify the tax position before relying on projected savings.
Buyers should request a written closing-cost calculation, confirm the DGII valuation, investigate outstanding taxes and have an independent attorney verify any claimed CONFOTUR benefit.
For the complete purchasing process, visit our Dominican Republic Property Buying Guide 2026.
This article provides general information and does not constitute legal, tax or accounting advice. Tax thresholds, exemptions and administrative interpretations can change. Always obtain transaction-specific advice from a qualified Dominican professional.
