US Citizens Guide to
Real Estate in the
DOMINICAN REPUBLIC

Unlike many countries, the US and Dominican Republic do not have a comprehensive double taxation treaty. However, the US Foreign Tax Credit mechanism (IRC Section 901) allows US citizens to credit Dominican taxes paid against their US tax liability, effectively preventing double taxation. This applies to: Dominican rental income tax, transfer tax (in the year of purchase), and capital gains tax (in the year of sale). Work with a CPA experienced in cross-border taxation to maximize credits.

CONFOTUR certification creates a uniquely favorable tax position for US investors: (1) No DR transfer tax = lower acquisition cost. (2) No DR annual property tax (IPI) = higher net rental yield. (3) No DR capital gains tax = your only CG tax is the US rate (0-20%). Without CONFOTUR, you pay DR capital gains tax (27%) and then claim a Foreign Tax Credit on your US return. With CONFOTUR, you skip DR tax entirely and only pay the lower US long-term capital gains rate. This alone can save $10,000+ on a $50,000 gain.

US tax law allows you to depreciate foreign rental property over 27.5 years (residential) or 39 years (commercial). On a $200,000 property (excluding land value), this provides approximately $5,800-$7,300 per year in depreciation deductions that offset rental income and reduce your US tax bill. Depreciation is a paper loss—no cash outflow required. Note: upon sale, depreciation recapture applies at 25% federal rate. This is one of the most powerful tax benefits for US real estate investors, applicable worldwide.

If a US citizen owns Dominican Republic property and passes away, the property is subject to BOTH Dominican succession law and US estate tax. Dominican law provides for forced heirship (surviving spouse and children have mandatory inheritance rights). US estate tax applies to worldwide assets above the exemption ($13.61M in 2024). Plan with an attorney experienced in both jurisdictions. Consider: a US-based trust or LLC structure (consult Dominican attorney on local implications), life insurance to cover potential estate tax, and updating both US and Dominican wills.

US citizens need only a valid passport to enter the Dominican Republic—no visa required for stays up to 30 days. For longer stays, purchase a tourist card ($10 at the airport or included in airline ticket). For residency, see our Residency by Investment guide. Keep your passport valid with at least 6 months remaining. TSA PreCheck and Global Entry expedite return travel. Direct flights from most major US cities take 2-4 hours.

US health insurance (including Medicare) generally does NOT cover you in the Dominican Republic. Options: international health insurance (Cigna Global, Aetna International) from $150-$500/month, Dominican health insurance (ARS plans) from $50-$200/month as a resident, travel medical insurance for short visits, and paying out-of-pocket (Dominican healthcare is significantly less expensive than US). If obtaining Dominican residency, you can enroll in the national social security health system.