What are the tax advantages in the Dominican Republic?

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 French property taxes?

The Dominican IPI (Impuestos sobre la Propiedad Inmobiliaria) and the French 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).

In France, property tax (Taxe Foncière) is a local tax paid by property owners. It is calculated on the rental value of the property and varies according to the commune. There’s also the Impôt sur la Fortune Immobilière (IFI), which applies to real estate properties worth over 1.3 million euros.

So, while both are taxes on real estate, their calculations and rates are different. In short, IPI is an annual tax on the value of the property, while French property tax is a local tax on the rental value of the property.

Sylvain Maufrais, AGIREDOM

Real Estate Category

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