Let’s talk taxes on real estate – certainly no one’s favorite topic! Fortunately, Dominican Republic taxes are very low for foreign buyers. Dominican taxes are pretty straightforward, predictable, and less than you’d expect. Let’s dive into Dominican Republic Real Estate Taxes.
Taxes when you buy: 3% transfer tax of the government assessed value of the property
Property transfer tax (Impuesto de Transferencia Inmobiliaria)
This can seem confusing, but here’s how it works:
- When you buy a condo or villa, the title must transfer from the developer/seller to your your name, the Dominican Republic charges a 3% transfer tax. This is the “closing tax” most foreign buyers hear about.
- The rate is 3% and is applied to the property’s value for transfer purposes. The value is determined by the government, and is generally less than market value, meaning the transfer tax becomes less than 3%
- DGII (the tax authority) also provides a transfer tax calculator, which tells you what they’re using for the calculation.
While this is an unpleasant hit when you purchase, it’s a one time cost. not a forever-bill. In many North American markets, buyers get hit with combinations of land transfer taxes, legal fees, title insurance, special assessments, and then heavier annual property taxes. In the DR, this 3% is the main headline item at purchase.
Taxes while you own: annual property tax
Dominican annual property tax for individuals is called IPI (Impuesto al Patrimonio Inmobiliario).
- Property tax for individuals (non corporate) is 1% of the value of the property, minus an exemption. That exemption in 2026 is RD$10,695,494 or US$171,843.21, CDN$235,217.58. Let’s say your DR home is valued at $350,000 US dollars. You will pay property tax like this: $350,000 – $171,843.21 = $178.159.79. This is the amount you pay tax on. At 1%, that amount is $1,781.59 – that’s your property tax.
- If you property is valued at less than the exemption, then your property tax is $0
- If you are 65-years old or older, your are exempt from paying property tax.
To see more in depth information on property tax, visit the Dominican Tax office website (DGII)
When it comes to Dominican Republic Real Estate Taxes, most buyers are pleasantly surprised. For many Casa Linda owners, that means ongoing property taxes are minimal — and sometimes zero.