Dominican republic taxes
This page describes both Property Taxes and Income Taxes for Non-Residents investing in the Dominican Republic. The sections below give descriptions of each tax category and examples with practical applications of the information.
Answers to Questions
Property Taxes
1% per Year
Cadastral Value *
+ $144,681 usd **
____________
Income Taxes
27% Tax Rate
On DR Rental Income
Non-Residents
____________
Examples
Cadastral Value: $170,000 usd
Property Tax: 1%
Tax Rate: 27%
(See Examples Below)
* Property Tax is based on the “Cadastral Value” of the property as determined by the government (usually at much less than the market value).
** Property Tax is levied annually at a rate of 1% on the property´s Cadastral Value exceeding DOP6,800,000 (US$144,681).
*** Properties with values below the threshold amount (RD$6.8 Million or US$144,681) are NOT TAXED.
NOTE: The Examples below do not apply to properties with “Confotur” Approval for Tax Benefits that include NO 3% Transfer Tax; NO Annual Property Taxes; and NO Income Tax on Rental Income for 15 Years.
(See link to more information below.)
Tax Examples
(Properties Without “Confotur”Approval)
Non-Resident Income:
Monthly Rental Income
Annual Rental Income
Less Expenses
Taxable Income
Income Tax:
Flat Rate
Net Income
30%
27%
– US$ –
$1,500 *
$18,000
$5,400
$12,600
$3,402
$9,198
Property Tax:
Cadastral Value US$
Cadastral Value RD$
Threshold Amount
Taxable Amount RD$
Property Tax 1%
Convert to US$ @ 52 *
* Effective 11/01/2019
– US$ –
$170,000
$8,840,000
$6,800,000
$2,040,000
$20,400 pesos
$392 usd /yr
*The amounts shown above are for example purposes only. It’s up to each owner to decide on a long- or short-term rental strategy. Rental Income can vary by location, property type, and season of the year. This amount can also vary based on the amount of time for owner occupancy.
Homeowner Common Area Maintenance Fees
Homeowner Fees on the north coast of the Dominican Republic tend to vary between $2.00 and $3.00 (usd) per square meter (m2). This can vary between private villa communities and condominium resorts. It also varies on the quality of the common area amenities to be supported by members of the communities. Below are examples of a property consisting of 100 m2 and is calculated in US dollars. The example below is using $2.82 /m2 average cost.
Property – 100 m2:
Common Area Maintenance
Common Area Electricity
Water Consumption
Trash Removal
Garden Maintenance
Pool Maintenance
Miscellaneous
Total Monthly Fee
$177.00
$24.00
$7.97
$7.97
$7.97
$42.36
$15.00
$282.28
In this case, $282.28 x 12 equals $3,387, which is less than $5,400 in the Tax Calculations above. We did this to allow for Rental Expenses incurred.
Confotur Tax Benefits on "Approved" New Developments
The “Tourism Incentive Law No. 158-01” was created to promote tourism development in areas in the Dominican Republic that have great potential as new or existing tourist destinations. It is aimed at areas that have not yet reached their expected potential as a thriving new community of international investors. This law and its associated regulations establish incentives for investments in the designated areas and are meant to be a legitimate stimulus to reach the country’s goals and objectives for tourism development. Click on the image to the right to gain more information.
