What is the Real Estate Wealth Tax (IPI)?

Knowing the taxes you have to pay when investing in an apartment or real estate in the Dominican Republic is essential for your financial planning.

The tax payable in the Dominican Republic on real estate is called the "real estate tax". Real Estate Wealth Tax (IPI).

In this post we will show you what IPI consists ofThe following table shows how much you have to pay and what advantages foreigners have when investing in housing in the Dominican Republic.

What is the Real Estate Wealth Tax (IPI)?

This is an annual tax, applicable to individuals and trusts, which is paid according to the total amount of real estate assets taxed.

Here it is important to understand that the encumbered assets is only that which has no exemption, as for example in the case of the Confotur Law. In addition, it is only applied to the value of the real estate when the total sum exceeds the amount of RD9,860,649The total cost of the project is approximately $179,000.

You should bear in mind that the IPI is only levied on real estate used for industrial, commercial and professional activities, dwellings and urban plots, but not on rural real estate.

When do I have to pay the Real Estate Wealth Tax?

The IPI Affidavit must be carried out within the first 60 days of the fiscal year following the year in which the events that obligate the individual or trust to pay IPI occur.

This means that if during one year you purchase an apartment worth US$500,000, for example, you will have to pay the IPI Statement in the first 60 days of the following year.

In addition, payment must be made in two installments. The first installment is due before March 11 of that year and the second installment is due by September 11.

Who is exempt from paying IPI?

There is a whole series of exemptions from which it is possible to benefit in order not to have to pay the Real Estate Wealth Tax in the Dominican Republic.

Individuals over 65 years of age

If you receive foreign income

If you are over 65 years of age and you have a home that constitutes your only real estate assets, you will not have to pay the Real Estate Wealth Tax.

In case you are an annuitant and at least 50% of your income comes from abroad, you would also be exempt from IPI.

Properties subject to the Confotur Law

Real estate of equal or lesser value of RD$ 9,860,649.00

Individuals who own real estate that may benefit from Law 158-01 (Law 158-01) (Law Confotur), they would also not have to pay Wealth Tax.

As noted above, real estate properties with a value less than this figure do not require the payment of IPI. You should keep in mind that IPI is paid on the sum of the real estate value of all your taxable real estate properties, therefore, IPI is paid on the sum of the real estate value of all your taxable real estate properties. that if you have two or more properties and all of them do not add up to this amount, you would not have to pay the tax either.

Properties intended for agricultural improvements or located in rural land

Although it is not the most common option among foreign investors, you should bear in mind that if you buy real estate for agricultural use, you will also be exempt from the tax.

How to calculate the IPI?

It is very simple, you only have to add up the total value of all your real estate properties in Dominican pesos, and then subtract the value of the RD$ 9,860,649.00 exempted.

On the resulting figure, you must apply the percentage of 1% annual IPI, and that would be the amount that you must pay in concept of the Tax on the Real Estate Patrimony in Dominican Republic, as long as you do not meet the requirements to be exempt.

What other taxes are paid on real estate investments in the Dominican Republic?

If you are interested in investing, there are other real estate taxes in Dominican Republic that you should know and be informed about.

Meeting tax payments and complying with legal requirements is the basis for a good tax return. investment strategy in the Dominican Republicand to avoid any type of legal problem.

However, keep in mind that one of the main attractions for do Real Estate in Dominican Republic is precisely the tax benefits for investors.

In this line, from Vivantia Homes we offer you the best investment proposals and real estate projects with high profitability that can help you build a patrimony that will secure your future.