What are the tax advantages in the Dominican Republic?

DGII

Real estate investments in the tourism sector in the Dominican Republic benefit from a number of tax advantages.

Here are some of the main tax advantages offered, on certain real estate projects, under the CONFOTUR law (Concesiones Fiscales y Otras Facilitaciones para el Desarrollo de Proyectos Turísticos), which aims to stimulate the development of tourism infrastructure in the country:

Exemption from transaction taxes

Foreign investors are exempt from paying the 3% real estate transaction tax when purchasing tourism properties.

Exemption from property tax (IPI)

Tourist properties are exempt from the annual property tax of 1% on the value of the property for up to 15 years.

Income tax exemption

Investors benefit from a tax exemption on income generated by the rental of their tourism properties for a period of 15 years.

Import of building materials

Investors are exempt from import duties and taxes on building materials and equipment required for the construction of their tourism projects.

Capital transfer

Foreign investors can freely transfer invested capital and dividends out of the country without restriction.

Tax exemption on services

Investors benefit from a 100% tax exemption on services related to the operation of their tourism projects.

What are the differences between Dominican and US property taxes?

The Dominican IPI (Impuesto sobre la Propiedad Inmobiliaria) and the US property tax are taxes on real estate, but they are not exactly equivalent.

The IPI is an annual tax paid by property owners in the Dominican Republic. It is calculated on the value of the property and the rate is 1% for values over RD$9,520,861.00 (approx. US$161,507.00).

However, if you’re a non-resident, you might need to pay a bit more. There’s also a tax exemption for those over 65 years old, so if you’re a senior citizen, you can keep more of your hard-earned pesos.

On the other hand, in the US, property taxes can vary as much as the weather in New England. Each state has its own tax rate and rules, so it’s like trying to find a needle in a haystack. In some states, like Texas and Nevada, property taxes are higher than a kite, while in others, like Hawaii and Alabama, they’re as low as a limbo stick.

Sylvain Maufrais, AGIREDOM

Versión Español – Version Française

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