Taxes

Transfer Tax


In the Dominican Republic, a transfer tax of 3.1% (based on the government-assessed value of the property) is charged when buying a property. This tax serves as a way to transfer the title from the seller to the buyer. It is important to note that taxes are calculated based on the property's market value, as determined by the tax authorities, not the purchase price stated in the deed of sale. It is worth noting that tax authorities generally value properties at a lower rate than their market value.


Property Tax


Property tax in the Dominican Republic is assessed at an annual rate of 1% based on the government-assessed value of the property, which includes the cumulative value of all properties owned by an individual. The tax authorities determine the deal, and it does not consider any furniture or equipment on the property. The tax only applies to values exceeding 6,858,885.00 DOP, approximately USD 150,000. For undeveloped lots, the 1% tax is calculated on the actual appraised value without any exemptions. The real estate tax is payable annually on or before March 11, or in two equal installments, with 50% due on or before March 11 and the remaining 50% due on or before September 11.


Some exemptions to the real estate tax include farm properties, homes owned by individuals 65 years old or older and no other property in their name, and properties owned by companies that pay a separate tax on their company assets. The amount of the exemption is adjusted annually for inflation.


Foreigners face no restrictions when purchasing real estate in the Dominican Republic, and there are no restrictions on an inheriting title to real property. The inheritance tax has recently been lowered to 3% of the estate's appraised value.


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