A Crystal Garden Buyer's Guide to Dominican Property Taxes

When buying property in the Dominican Republic, owners face a 3% transfer tax and a 1% annual property tax (IPI), but purchasing a residence at Crystal Garden provides significant exemptions under the CONFOTUR law. As a CONFOTUR-approved project it exempts first buyers from the transfer tax, and carries the law's IPI exemption for qualifying projects.

What taxes are due when I purchase my Crystal Garden residence?

The primary tax due at the time of purchase is the Property Transfer Tax, a one-time payment equivalent to 3% of the property's value as assessed by the government. This is a standard part of closing costs for any real estate transaction in the Dominican Republic.

However, because Crystal Garden is approved under the tourism incentive Law 158-01, also known as CONFOTUR, first-time buyers purchasing directly from the developer are exempt from this 3% tax. This represents a direct and substantial reduction in your closing costs. The filing that applies it is made by your attorney at closing rather than granted by default. Residences here start from $475,000.

What annual property taxes will I owe as an owner?

The Dominican Republic levies an Annual Property Tax, known as IPI (Impuesto al Patrimonio Inmobiliario). The rate is 1% of the property's value. However, this tax is not calculated on the full purchase price. It is only applied to the value of the property that exceeds an annually adjusted exemption threshold. So the headline rate and the amount actually assessed are different things, and the gap depends on where the threshold sits in the year you are billed.

On top of that, the CONFOTUR law provides a fifteen-year exemption from the 1% IPI for qualifying tourism projects, running from the project's completion. Read that term as the law's provision to the project: how it lands on an individual unit and owner is not something the statute spells out, and it is worth asking your attorney rather than assuming. The benefit has in any case to be formally registered on the title before it does anything.

If I rent my condo out, is that income taxed?

Yes. Rental income is assessed under its own rules, quite apart from property taxes such as IPI. What CONFOTUR is documented to exempt are the transfer tax and the IPI — taxes on the asset. Whether the exemption reaches rental income is not addressed in terms by any source we checked, in either direction, so the safe way to model a return is to assume it does not.

For non-resident owners, two main taxes apply to short-term rental income:

• ITBIS (VAT): A value-added tax of 18% is levied on income from tourist accommodations. As the property owner, you are responsible for ensuring this tax is paid.
• Withholding Tax: A 27% withholding tax is applied to the gross rental income earned by non-residents. This is considered a final and definitive payment, meaning no deductions for expenses are permitted against it.

These tax obligations are an important factor in calculating the net return on your investment. An accountant can provide guidance on the proper way to declare and remit these taxes.

What are the tax implications when I eventually sell my property?

When you decide to sell your Crystal Garden residence, the transaction may be subject to capital gains tax. The specific rate and how it is calculated should be confirmed with a Dominican tax advisor, as tax laws can change.

It is also important to understand that the CONFOTUR tax benefits are granted to the first buyer who purchases from the developer. According to the law, these exemptions do not automatically transfer to a subsequent owner upon resale. A subsequent buyer would therefore face the 3% transfer tax, and the property would fall under the ordinary IPI rules — which, as above, reach only the value over the threshold. What that does to resale price is not something we can quantify, and this page will not guess at it.

How are my CONFOTUR tax exemptions secured?

The tax benefits under CONFOTUR are not automatic; they have to be attached to your specific title by a formal process, normally handled by a Dominican real-estate attorney on your behalf. In outline:

1. Confirm the project's registration. During due diligence your attorney verifies that the development actually holds CONFOTUR approval — this is a property of the project, not a claim to take from marketing material.
2. File the application. The exemption is claimed for your unit as part of the closing, not granted by default.
3. Have it recorded on the title. The benefit lives on the certificate of title; until it is recorded there, it is not doing anything for you.
4. Keep the recorded title. That document is what evidences the exemption later, including to a tax authority.

We are not putting timings on those stages, because we have no sourced figure for how long any of them takes. Ask the attorney handling your closing for their own estimate.

1. Verification of Status
   Your attorney first confirms that Crystal Garden holds its final CONFOTUR resolution from the Dominican government's Council for Tourism Promotion (CONFOTUR).
2. Application Filing
   Once you have signed the Promise of Sale, your attorney submits an application to have the exemptions individually applied to the specific residence you are purchasing.
3. Title Registration
   Upon completion of the purchase and issuance of the final deed, the exemption is formally recorded on your Certificate of Title by the national Title Registry Office. This makes the benefit official.

How do the standard and CONFOTUR tax regimes compare?

Set side by side, for a first buyer purchasing directly from the developer, the difference the status makes is confined to two taxes — which is exactly why it is worth being precise about it:

• Transfer tax at purchase. Standard: 3% of the assessed value. CONFOTUR: exempt for the first buyer.
• Annual IPI. Standard: 1%, on value above the annually adjusted threshold. CONFOTUR: the law provides a fifteen-year exemption for qualifying projects, from completion.
• Rental income. Unchanged either way — the 18% ITBIS and the 27% non-resident withholding apply regardless of CONFOTUR status.
• On resale. Unchanged either way — the exemptions are granted to the first buyer and do not carry to the next.
• Effort required. Standard: none, the taxes simply fall due. CONFOTUR: an application that has to be filed and recorded, or the benefit does not exist in practice.

Common questions

Do I have to be a Dominican resident to receive CONFOTUR tax benefits?

Nothing we could source imposes a residency requirement, and the law's stated purpose is to draw investment into tourism development. We will not state the statute's eligibility test from memory, though — the exemption has to be applied for and recorded in any case, so the attorney lodging that application is who confirms it reaches you.

Are the CONFOTUR benefits automatically applied to my purchase?

No, they are not automatic. Your attorney must file a specific application to have the exemptions recorded on your property's official title. This is a critical step in the closing process.

Does the CONFOTUR exemption mean I pay no taxes at all on my property?

No — and the gap between the two is where buyers most often get the maths wrong. What the exemption is documented to cover is the 3% transfer tax and the 1% annual IPI. Rental income, any gain on sale, and other charges are governed by their own rules, and nothing we checked extends CONFOTUR to them. It is a relief on taxes that attach to the asset, not a general waiver.