Is the 1% annual property tax (IPI) based on the purchase price?

The 1% IPI is calculated on the value of the property as assessed by the tax authorities, which may differ from the purchase price. More importantly, it only applies to the value *above* a significant exempt threshold that is adjusted annually for inflation. Therefore, the tax is not on the full value of the property.

Do I lose the CONFOTUR benefits if I sell my condo?

The CONFOTUR tax exemptions are granted to the first buyer of the property from the developer. The benefits do not transfer to subsequent owners upon resale. The new buyer would be subject to the standard 3% transfer tax and annual IPI.

Does CONFOTUR reduce my capital gains tax when I sell?

No, the CONFOTUR law provides exemptions for the property transfer tax (ITP) and the annual property tax (IPI). It does not cover capital gains tax, which would be assessed at the time of sale based on the profit realized. Your attorney can provide details on how capital gains are calculated.

Taxes & incentives

Understanding Property Taxes in the Dominican Republic

Published August 30, 2026 6 min read

In the Dominican Republic, property owners are subject to two primary taxes: a one-time 3% transfer tax on the purchase and a 1% annual property tax (IPI) on the value of their real estate. However, as a buyer at Moon Garden 2, your purchase qualifies for exemptions from both of these taxes under the CONFOTUR law, significantly reducing your cost of ownership.

What is the standard property tax regime for buyers?

When you buy property in the Dominican Republic, the tax framework is straightforward. There are two main taxes to be aware of. The first is a one-time tax paid at the time of purchase, and the second is an annual tax paid for as long as you own the property.

1. Property Transfer Tax (ITP): This is a 3% tax levied on the market value of the property as determined by the government appraisal. It is a one-time payment due upon the transfer of the title to the new owner. This is a standard closing cost in most real estate transactions.

2. Annual Property Tax (IPI): This is a 1% annual tax on real estate assets. Crucially, this tax is not calculated on the entire value of your property. It is only applied to the value that exceeds an annually-adjusted exempt threshold set by the Dominican tax authority (DGII). For many properties, this means the effective tax rate on the total value is significantly lower than 1%.

How does CONFOTUR benefit a buyer at Moon Garden 2?

Moon Garden 2 is a project approved under the Dominican Republic's Law 158-01, also known as CONFOTUR. This law is designed to encourage tourism development by providing significant tax incentives for qualifying projects and their first buyers.

For a buyer of one of the 108 residences at Moon Garden 2, this approval means the two main property taxes are exempted for a first buyer from the developer:

Exemption from the 3% Property Transfer Tax (ITP): You do not pay this tax at closing, which represents a direct and immediate saving.
Exemption from the 1% Annual Property Tax (IPI): The law provides a fifteen-year IPI exemption for qualifying tourism projects. How that period applies to a particular unit and owner is a question for your attorney rather than something this page can settle.

These benefits apply only to the first purchaser of a new property from the developer. The exemption is not automatic; it must be filed for and recorded on your property's title, a process typically handled by your real estate attorney during the closing process.

Daylight rendering of the Moon Garden 2 residence building behind the main pool; residences here are priced from $211,000 to $490,000.

Are there taxes on rental income from my property?

Yes. Rental income is assessed separately from property ownership, under a different part of the Dominican tax code. What is documented about CONFOTUR is narrower: its exemptions are recorded against the 3% transfer tax and the 1% annual IPI. Nothing we can cite rules on how the two meet for a particular unit and owner, so treat that as a question for your attorney rather than as settled either way. If you choose to rent out your Moon Garden 2 condo, the income generated is subject to Dominican taxes.

For short-term tourist rentals, an 18% tax known as ITBIS (the Dominican VAT) is applied. For non-resident owners, there is also a 27% withholding tax levied on the gross rental income, with no deductions permitted. This is considered a final and definitive payment. The responsibility for remitting these taxes lies with the property owner, not the booking platforms.

Because tax laws can change, and individual circumstances vary, it is essential to have your attorney or a local accountant confirm the current rates and filing requirements that apply to your situation.

What are the key property taxes at a glance?

Understanding the difference between the standard tax regime and the benefits of buying a CONFOTUR-approved property is key. This table breaks down the major property-related taxes for a buyer in the Dominican Republic.

Standard rates, and how each is treated for a first buyer at Moon Garden 2. CONFOTUR's documented exemptions are the 3% transfer tax and the 1% annual IPI.
Tax	Standard Rate	Treatment for a first buyer at Moon Garden 2
Property Transfer Tax (ITP)	3% of property value	Exempt under CONFOTUR
Annual Property Tax (IPI)	1% on value above exempt threshold	Exempt under CONFOTUR
Rental Income Tax (Non-Resident)	27% withholding on gross income	Assessed under a separate part of the tax code; confirm the position for your unit with your attorney
VAT on Short-Term Rentals (ITBIS)	18%	Assessed under a separate part of the tax code; confirm the position for your unit with your attorney

Who ensures my tax exemptions are applied correctly?

The entire purchase process, including the application for and registration of your CONFOTUR tax exemptions, is managed by a qualified Dominican real estate attorney. This is not a service the developer provides, but a standard part of the legal due diligence and closing process for any foreign buyer.

Your attorney will conduct a title search, prepare the purchase agreement, and ensure the deed is correctly registered in your name with the Land Registry. As part of this, they will file the necessary paperwork with the Dominican tax authority (DGII) to have the CONFOTUR exemptions officially applied to your title. This ensures your tax-exempt status is formally recognized and legally binding.

Common questions

Is the 1% annual property tax (IPI) based on the purchase price?: The 1% IPI is calculated on the value of the property as assessed by the tax authorities, which may differ from the purchase price. More importantly, it only applies to the value *above* a significant exempt threshold that is adjusted annually for inflation. Therefore, the tax is not on the full value of the property.
Do I lose the CONFOTUR benefits if I sell my condo?: The CONFOTUR tax exemptions are granted to the first buyer of the property from the developer. The benefits do not transfer to subsequent owners upon resale. The new buyer would be subject to the standard 3% transfer tax and annual IPI.
Does CONFOTUR reduce my capital gains tax when I sell?: No, the CONFOTUR law provides exemptions for the property transfer tax (ITP) and the annual property tax (IPI). It does not cover capital gains tax, which would be assessed at the time of sale based on the profit realized. Your attorney can provide details on how capital gains are calculated.