Dominican Republic buying costs and CONFOTUR tax breaks

The 3% transfer tax

The main purchase cost is the real estate transfer tax of 3%, established under Law 288-04 and calculated on the government-appraised value of the property rather than necessarily the price you paid. It is paid to the tax authority (DGII) before the sale can be registered and the new Certificate of Title issued.

The Ministry of Finance lists several categories that can apply for exemption from this tax, including buyers in approved tourism developments, qualifying pensioners and foreign-source income earners, and purchasers of officially defined low-cost housing. According to DGII Resolution DDG-AR1-2026-00001, reported by Listín Diario in January 2026, the maximum value for a property to qualify as low-cost housing is RD$5,450,851 in 2026.

Professional fees and other closing costs

Legal fees in the Dominican Republic typically run at 1–1.5% of the purchase price, plus 18% ITBIS (VAT), according to buyer guides from established Dominican brokerages; registration and administrative costs add roughly another 0.5%. Notary involvement is required for the deed of sale.

Altogether, closing costs on a standard purchase come to about 4.5–5.5% of the price. On a CONFOTUR-approved property, where the transfer tax falls away, the same guides put total closing costs at roughly 1.5–2.5%.

• Transfer tax: 3% of appraised value (Law 288-04)
• Legal fees: about 1–1.5% plus 18% ITBIS
• Registration and sundries: roughly 0.5%

The annual property tax (IPI)

Individuals pay an annual 1% Impuesto al Patrimonio Inmobiliario (IPI) on the portion of their total registered property value above an exemption threshold. DGII guidance sets that threshold at RD$10,695,494 for 2026 — up from RD$10,190,833 in 2025 — with the tax payable in two instalments, due 11 March and 11 September.

DGII lists exemptions including the primary residence of owners aged over 65 (where it is their only property), a 50% reduction for qualifying pensioners and foreign-source rentistas, rural agricultural land, and properties covered by special incentive laws such as CONFOTUR. The threshold is indexed to inflation annually, so check DGII for the current figure.

CONFOTUR: up to 15 years without transfer tax or IPI

The Tourism Incentive Law 158-01 — administered through the tourism promotion council known as CONFOTUR — grants approved tourism developments a package of tax exemptions. For individual buyers in an approved project, the headline benefits are exemption from the 3% transfer tax at purchase and from the 1% annual IPI, for up to 15 years counted from the project's approval.

Two caveats matter. First, the 15 years run from project approval, not from your purchase date — a project approved a decade ago has only a few years of benefit left, and the exemption travels with the property to future owners for the remaining term. Second, only officially approved projects qualify, so ask for the CONFOTUR approval documents (the resolution number and date) and have your lawyer verify them before you rely on the savings.

• Confirm the project's CONFOTUR resolution number and approval date
• Calculate the remaining exemption years before valuing the benefit
• Do not let a tax break outweigh fundamentals: location, build quality and developer track record

Budgeting sensibly

Tax rates, thresholds and incentive rules in the Dominican Republic change — the IPI and low-cost housing amounts are adjusted every January, and incentive regimes can be reformed — so treat the figures here as a 2026 snapshot and confirm the current position with DGII, the Ministry of Finance or a Dominican lawyer before you commit.

When comparing properties, compare like for like: a slightly dearer CONFOTUR unit can cost less overall than a cheaper resale once transfer tax and 15 years of IPI are counted. Habio's Dominican Republic listings and buyer guides can help you weigh those trade-offs area by area.