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

One of the issues of concern when it comes to invest in Dominican Republic real estate are taxes.

One of the attractions of buy apartments in Dominican Republic is precisely its low tax system for foreign or local investors.

Let's take a look at some of the things you should know about taxes in the Dominican Republic.

What taxes do you have to pay if you invest in real estate in the Dominican Republic?

As in any other country, the purchase of properties The payment of certain taxes is included.

However, you will soon realize two fundamental points:

1) In the Dominican Republic taxes for buying real estate are low.

2) There are some exemptions that may benefit you.

Let's take a look at the different taxes and costs associated with the purchase of real estate that you should take into account if you are going to invest in Dominican Republic.

Real Estate Transfer Tax (ITI)

When you buy a property in the Dominican Republic, the property must be transferred from the seller to the new owner.

This process is known as transfer of the property, and is associated with a cost of 3% of the price of the home or property.

This tax on the value of the property must be paid within 6 months of the acquisition of the property.

Real Estate Patrimony Tax (IPI)

Another tax that you may have to pay is the Real Estate Wealth Taxmore commonly known as the IPI.

This is an annual levy that is collected from owners of taxable real estate that has been registered in the name of an individual or a trust.

● IndividualsIf the property or properties are registered in the name of individuals, they will pay 1% of the excellent value on the figure of RD $ 8,829,763.30. This is a little more than 143,000 euros.

● TrustsIn this case, they must pay 1% on the total value of the real estate in question that is taxed.

This is a tax that paid in two installmentsThe first installment must be paid before March 11 of the following year, and another one on September 11 of the same year. The filing of the Wealth tax return must be made before February 28th of each year.

What type of real estate do you have to declare in this Statement of net worth how to calculate the IPI? All your properties, both residential and commercial, industrial or professional buildings, or urban land.

Who is exempt from paying IPI in the Dominican Republic?

Perhaps, if you are a foreign investor and you were thinking about buy a property in Dominican Republicyou thought that you had to pay the IPI, yes or yes.

But the truth is that there are exemptions that you must take into account, which means that investing in a home in the Dominican Republic is very attractive.

● If you are a pensioner or annuitant and receive at least a 50% of your income from foreign sources, you would not have to pay Real Estate Tax.

● As we have seen before, any individual who owns a property whose value is less than RD$ 8,829,763.30 will also be exempt. In other words, if you purchase a property in the Dominican Republic that costs less than approximately 144,000 euros, it will be exempt from IPI.

● You will also not have to pay IPI for homes or land where there are homes owned by people over 65 years of age, as long as it is their only home or real estate assets, which you will have to declare by oath.

● Land in rural areas will also be exempt.

● Special properties that are subject to Executive Law 158-01 will also not be taxed by IPI.

Other benefits of living in the Dominican Republic

You should bear in mind that we are only talking about taxes related to buy real estate in Dominican Republic.

Obviously, the purchase of a property entails other expenses, such as notary and title deeds, but these costs tend to be minor compared to taxes.

In any case, there are other tax benefits which, although not linked in themselves to the purchase of a home in the Dominican Republic, are related to certain types of investments.

We are talking about if you do investments in properties that have been declared to be of tourist interest in the Dominican Republic in accordance with the Confotur Lawyou may be exempt from paying income taxes for a period of 15 years.

This adds an even greater attraction, to which it must be assumed that this type of investment is also exempt from Property Transfer Tax at the time of purchase.

At Vivantia Homes we want to advise you to buy property in Dominican Republic.

If you would like more information about the taxes for buying a property in the Dominican Republic or would like to learn about investment opportunities in this beautiful Caribbean country, we invite you to contact us now.