TAXATION IN THE DOMINICAN REPUBLIC
Territorial tax system
Dominican tax law is primarily territorial: taxes are levied on income from Dominican sources. Income from work performed abroad is generally not taxable even if received by Dominican nationals or residents. For tax purposes, anyone present in the country for 182+ days in a 12-month period is considered a tax resident. All taxpayers must register with the Internal Revenue Agency and obtain a tax number RNC.
Real Estate Taxes & Fees
- Transfer Tax (one-time): 3% of the higher of the contract price or the government appraisal (DGII) when title is transferred.
- Legal fees: typically around US$ 1,000 or ~1% depending on scope.
- Annual Property Tax (IPI): 1% for individuals, calculated on the cumulative appraised value of owned properties:
- For developed lots, the 1% applies only to the portion exceeding the indexed threshold (≈ US$ 170,000 equivalent in DOP; updated annually).
- For undeveloped land, the 1% is calculated on the full appraised value (no exemption).
- Payment schedule (IPI): annually by March 11 or in two equal instalments: 50% by March 11 and 50% by September 11.
- Exemptions: farm properties; a single home owned by a person aged 65+ who owns no other property; properties held by companies (see Corporate Assets Tax).
Registration scenarios
| Scenario | Tax due |
|---|---|
| Title transferred to an individual | 3% Transfer Tax on sale/appraised value |
| Title transferred to a company (SRL) | 3% Transfer Tax applies on transfer to the company |
| Property already held by a company; you buy the company shares |
No title transfer → no 3% transfer tax at that moment (ongoing company taxes still apply) |
Tax on Corporate Assets
- Companies pay an annual 1% tax on company assets. If a property is registered under a company, this 1% company-assets tax applies (creditable against corporate income tax liabilities).
- For companies, IPI does not apply to the property itself; instead, the corporate assets tax regime applies.
Property Tax (IPI) quick view
| Who pays | Rate | Base | When |
|---|---|---|---|
| Individuals | 1% annually | Cumulative appraised value above indexed threshold | By Mar 11 (or half Mar 11 / half Sep 11) |
| Companies | — | — | Company Assets Tax 1% applies instead |
TAXES AND BUILDING PERMITS IN THE DOMINICAN REPUBLIC
Before you build!!!
Obtain a property title certificate and a complete architectural plan set from a licensed architect. Architectural services commonly range US$ 15–30/m² depending on expertise and complexity. Initial design & filing phase ≈ ~60 days.
Main permits & typical fees
- Municipality Permit — Certificate of No Objection (land use), plan submissions, urbanization payments.
Typical items: land-use fee ≈ RD$2,000; inspection ≈ RD$1,000; urbanization/subdivision ≈ RD$30,000 (varies by city). - Water & Sewer (INAPA) — no-objection for network connection; filing and approval. Guide fee: ≈ RD$10,000.
- Electric Utility (e.g., Luz y Fuerza) — grid connection permit; plans & technical data. Guide fee: ≈ RD$3,000–6,500, capacity-dependent.
- Environmental Authorization (Medio Ambiente) — application & supporting studies; ministerial evaluation. Guide fee: ≈ RD$5,000.
- Ministry of Tourism (MITUR) — design parameters / pre-project analysis / land-use no-objection for tourism projects. Fees vary by request type.
- Final Construction License (MOPC) — Ministry of Public Works & Communications. Guide fee: ≈ RD$6,000 + assessed taxes/receipts.
Complete permitting often takes 6–12 months; total third-party costs may reach several thousand USD. Work with local licensed architects/PMs.
Law 5038 (Condominiums) — key provisions
- Allows vertical property division into condominium units.
- Defines rights/obligations of unit owners and common areas.
- Requires a condominium association for common-area management.
- Sets decision protocols, common-expense handling, and meeting rules.
- Regulates amendments, unit sales, and reconstruction procedures.
Important notes!!!
- Projects over two floors and construction area parameters require specific permissions per local regulations.
- Zoning maps define allowed uses by city; no residential construction is permitted within 60 meters of the ocean.
- The process is complex; engaging a local licensed architect/manager significantly reduces time and risk.
Building Regulations in the Dominican Republic
Compliance with national codes (MOPC), environmental norms, municipal ordinances, and—where applicable—tourism-sector and utility standards is mandatory. Plan for staged approvals and inspections at design, start, structural, and completion phases.