Taxes on Real Estate in the Dominican Republic
The Dominican Republic is a popular destination for tourists and expatriates alike due to its beautiful beaches, sunny climate and friendly people. Many people also choose to buy property in the country to have a second holiday home or permanent residence. If you are considering buying property in the Dominican Republic, it is important to know what taxes you will have to pay.
In the Dominican Republic, property tax is known as Impuesto Sobre la Propiedad Inmobiliaria (IPI). The tax is levied annually on the assessed value of the property, which is typically lower than the market value. Now it is 1% of the amount in excess of RD$9,520,861.00 (all properties are summed up if the owner has several properties in his name).
IPI is paid to the local municipality where the property is located. Keep in mind that non-payment of tax may entail penalties and penalties. And as a result, it can even lead to the arrest and sale of property.
Buying a property in the Dominican Republic involves paying for a transfer tax, known as Impuesto de Transferencia de Propiedad (ITP). The rate of ITP is 3% of the assessed value of the property or the purchase price, whichever is higher. ITP payment is usually at the expense of the buyer. However, the parties can agree on the cost sharing.
In addition to property tax and transfer tax, the buyer pays notary fees. Notary fees are typically from 1% to 2% of the purchase price of the property.
So, now you understand that the taxes on Real Estate in the Dominican Republic is one of the most loyal in the world
Thus, if you are considering buying a property in the Dominican Republic, it is important to budget for all taxes related to the purchase. These include property tax, transfer tax, and notary fees. Now you know all the tax requirements and can buy property in the Dominican Republic without any problems.