Dominican property tax (IPI) explained
IPI (Impuesto al Patrimonio Inmobiliario) is the annual Dominican property tax. For individuals it applies at 1% on the value above an exempt threshold that is adjusted for inflation each year, and it is assessed on the tax authority's valuation rather than your purchase price. Below the threshold, nothing is due. It is normally paid in two instalments per year. On projects holding a valid CONFOTUR resolution, IPI can be exempt for the incentive period — a project-level benefit that must be verified for your specific unit. Always confirm the current year's threshold and rate with your lawyer or accountant.
How it works in plain English
The tax authority assigns a value to your property. If that value is below the annual exempt threshold, you owe nothing. Above it, you pay 1% on the excess, not on the whole value. The threshold is republished each year, so a property that is exempt today may not be in future years, and vice versa. Payment is typically split across two dates in the year.
- Applies to individuals; companies holding real estate are taxed under a different regime
- Assessed on the tax authority's valuation, not your contract price
- 1% on the portion above the annual exempt threshold
- Paid in two instalments per year
CONFOTUR can pause it — per project
A valid CONFOTUR resolution can exempt a certified project from IPI for the incentive period. This is granted to the project by resolution under Law 158-01, not to the zone and not to you personally. Ask for the resolution number, check the project name on it, and get written confirmation that your unit is inside the scope. When the exemption period ends, normal IPI rules resume.
Budget it as a holding cost
For a rental model, IPI belongs in the same line as HOA, insurance and management: a cost you carry whether or not the unit is booked. It is usually small next to HOA on an amenity-heavy condo, but on a higher-value villa it is a real annual number. Add it to your net yield model rather than treating it as an afterthought.
Property tax (IPI): FAQs
- How much is property tax in the Dominican Republic?
- For individuals, 1% per year on the property value above an exempt threshold that is indexed annually, assessed on the tax authority's valuation. Below the threshold there is nothing to pay. Confirm the current year's threshold with your lawyer or accountant.
- Do foreigners pay a different property tax rate?
- No. IPI applies the same way to foreign and Dominican individual owners.
- Does CONFOTUR mean I never pay property tax?
- No. A valid CONFOTUR resolution can exempt the certified project for the incentive period only, and only if your unit falls within it. After that, standard IPI rules apply. Verify the resolution in writing before assuming the exemption.
- What happens if IPI is unpaid by a previous owner?
- Unpaid tax attaches to the property, so it becomes your problem. Your lawyer should confirm the account is clear as part of closing.
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2026 orientation, not legal or tax advice. Verify every figure with an independent Dominican lawyer or accountant.