How is my property value determined for taxes?

As a property owner in the Dominican Republic, you are subject to property taxes or Impuesto Patrimonio Inmobiliario (IPI) if the property is valued at or more than RD$9,860,649—around US$166,000 at today’s exchange rate.

The current tax rate is 1% of the property’s value exceeding US$166,000. So, if you have a property valued at US$236,000, your annual property tax would be US$700 (which is 1% of US$70,000, the amount by which the property’s value exceeds the threshold).

Please note that property taxes are based on the total value of all real estate properties owned by an individual, not per property. In other words, if the combined value of all your properties exceeds the US$166,000 threshold, the 1% tax will be applied to the excess value.

If the property is owned through a business entity, you’d have to pay 1% of the total value of the property. In this case, the annual property tax on the property valued at US$236,000 would be US$2,360 if held or owned by an entity.

In the Dominican Republic, you must visit the La Dirección General de Impuestos Internos (DGII) website, the country’s tax authority, like the IRS in the USA, to determine what annual property taxes you owe. Property owners will not receive any invoices, statements, or notices for the property taxes owed. And you’re able to pay your taxes online using the website’s virtual office.

The tax is paid in two installments, with the deadline for the first payment being March 11 and the second due by September each year.

How is the value of your property determined?

Every time a property is bought or sold, the transaction, including the amount the property is sold for, is registered with DGII. Registration of a property transaction with the tax office is one requirement before the title can be transferred to the new owner. Therefore, the last sales price on file determines the property’s value.

If you purchased a property for US$170,000, the property value is US$170,000. And, if you were to resell the property in, say, five years for $200K, the new owner’s tax basis would be US$200,000.

For your reference, here is a link to the property tax information from the DGII website here.

Also, here is the virtual office page on the DGII site where you can pay your property taxes online.

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Maria Abreu is the CEO and Managing Attorney of Abreu & Associates, a law firm practicing exclusively in Dominican Republic Immigration and Nationality law. She is also the founder of Retire and Invest DR. This organization hosts conference events for foreigners interested in living, retiring, and investing in the DR. You can contact Maria at: mabreu@abreuimmigration.com.