Closing Costs &
Taxes for Property in the
DOMINICAN REPUBLIC

The single most impactful cost decision is whether your property has CONFOTUR (Consejo de Fomento Turistico) certification under Law 158-01. CONFOTUR-certified properties are exempt from the 3% transfer tax on the first sale, saving $3,000 per $100,000 of property value. They are also exempt from annual property tax (IPI) and capital gains tax for 15 years. Always verify CONFOTUR status before purchasing. Most new developments in tourism zones (Punta Cana, Cap Cana, Samana, Las Terrenas) carry CONFOTUR certification.

While the buyer traditionally pays the transfer tax (3%), legal fees, notary fees, and registration costs, these are negotiable. In a buyer's market or for high-value transactions, sellers may agree to split or absorb certain costs. Developer pre-construction purchases often include closing cost assistance or absorb the transfer tax within the listed price. Always clarify in writing during contract negotiation which party is responsible for each cost. The only non-negotiable element is that the DGII requires the tax to be paid before processing the title transfer, regardless of which party pays it.

The DGII calculates transfer tax based on the higher of the declared sale price or their internal assessed value. If the DGII's assessed value exceeds your purchase price, the tax will be calculated on their higher figure. This is particularly relevant for properties purchased below market value, foreclosure sales, or family transfers. Your attorney should check the DGII's current assessed value during due diligence to avoid surprises at closing. If you disagree with the DGII assessment, a formal appeal process exists but can delay closing by several weeks.

Beyond the one-time closing costs, property owners in the Dominican Republic face ongoing annual costs. The Impuesto a la Propiedad Inmobiliaria (IPI) is a 1% annual tax on the combined value of all properties owned by an individual exceeding approximately RD$9.86 million (about $170,000 USD). Properties owned through a corporation (SRL/SAS) pay 1% on total value with no exemption threshold. CONFOTUR-certified properties are exempt from IPI for 15 years. IPI is paid annually to the DGII in two installments (March and September).

When you eventually sell your Dominican Republic property, capital gains tax applies at 27% on the net gain (sale price minus acquisition cost and documented improvements). The acquisition cost is adjusted for inflation using official DGII indices. If the property has CONFOTUR certification and the 15-year exemption period has not expired, capital gains tax is completely exempt. The buyer withholds and remits the tax to the DGII at closing. For properties held longer than the CONFOTUR period, strategic planning around the sale timing relative to the exemption expiry date can result in significant tax savings.

If you are financing your Dominican Republic property purchase through a local bank mortgage, additional closing costs apply. Mortgage registration fee at the Registro de Titulos is approximately 2% of the loan amount. Bank origination fees range from 1-2% of the loan amount. Property appraisal required by the bank costs $300-1,000 USD. Mortgage insurance may be required. These costs are in addition to the standard purchase closing costs. Factor them into your total budget when comparing cash purchase versus financed acquisition.