Proposed tax reform could hurt new home buyers, builders say

Santo Domingo.- If passed, the government’s proposed tax reform will negatively effect new home buyers, increases the cost of construction materials, and defeat its own initial pledge to build 100,000 units over the next four years.

Of that number, the private sector already announced 8,196 affordable housing for immediate construction, ranging from RD$700,000 to RD$2.3 million, for low-income families under the Real Estate Trust and Market Promotion Law 189-11.

The legislation gives homebuyers sweeping tax breaks in projects developed within its guidelines, aimed at reducing cost.

But the new tax reform amends Law 18-88, to establish a direct annual tax on the capital and a 1% on an individual’s total personal real estate wealth.

José Rodríguez Cáceres, of the housing builders and promoters (Acoprovi), said if a person has a house worth RD$6.0 million now, they will pay 1% after 5.0 million, but if the reform is approved, a person who has 3 houses worth 3 million pays nothing.

Totaling the value of the three houses as one, the owner will pay 1% on the remaining 4 million.