Your Guide to Property Taxes as an Andara Owner

As an owner at Andara, you benefit from significant tax advantages thanks to the Dominican Republic's CONFOTUR law, which includes an exemption from the 3% property transfer tax and the 1% annual property tax (IPI) for a set term. These incentives are designed to encourage tourism investment and directly impact the net return on your property, which starts from $280,600.

What are the main property-related taxes in the Dominican Republic?

When purchasing and owning property in the Dominican Republic, three primary taxes are relevant to an international buyer. Understanding these is the first step to appreciating the benefits of owning a CONFOTUR-approved residence at Andara.

First is the Property Transfer Tax (ITPI), a one-time tax of 3% levied on the market value of the property at the time of purchase. This is paid to register the title in the new owner's name.

Second is the Annual Property Tax (IPI), an annual tax of 1% on the value of real estate. Crucially, this tax is not applied to the entire value of the property; it is only levied on the value exceeding a significant, annually-adjusted exempt threshold. For most properties, this means the effective tax rate is much lower than 1%.

Third, for owners who rent out their properties, there are taxes on rental income. For non-resident owners, this typically involves a withholding tax on gross rental income, along with a value-added tax known as ITBIS on short-term tourist stays. These are separate from property ownership taxes.

How does Andara's CONFOTUR status affect my taxes at purchase?

Andara is a CONFOTUR-approved development, which provides a significant and immediate financial benefit at the time of purchase. The primary benefit is a full exemption from the 3% Property Transfer Tax (ITPI).

Under the standard regime, a buyer would pay this 3% tax to the government to have the property title transferred into their name. For a CONFOTUR-approved property like Andara, this tax is waived for the first buyer acquiring the property from the developer. This is a direct, upfront saving that reduces your closing costs. This benefit is one of the key pillars of Law 158-01, designed to make investing in new tourism projects more attractive. Your attorney will handle the filing to ensure this exemption is correctly applied to your purchase when the title is registered upon delivery in Q4 2028.

What annual property taxes apply to an Andara residence?

The CONFOTUR law also provides a major benefit regarding annual property taxes. Normally, property owners are subject to the 1% Annual Property Tax (IPI). As mentioned, this is calculated on the property's value *above* an inflation-adjusted exemption threshold set by the tax authority each year.

However, because Andara is a qualifying project, it benefits from the law's provision for a fifteen-year IPI exemption for the development. For a first buyer, this means an exemption from this annual tax. The law's fifteen-year term is granted to the project itself, starting from the completion of construction. Your attorney is the right person to confirm the specifics of how this exemption applies to your individual unit and its title. This exemption is not automatic; it must be filed for and recorded on the property's title, a process a Dominican real estate attorney manages as part of the closing.

Are there taxes on income if I rent out my Andara condo?

Yes, income generated from renting your property is taxable in the Dominican Republic, and these taxes are separate from the property taxes (IPI) and transfer tax (ITPI) discussed above. The CONFOTUR law's benefits do not extend to rental income tax.

For non-resident owners, rental income is subject to a 27% withholding tax. This tax is applied to the gross rental income, with no deductions for expenses, and is considered a final and definitive payment. Additionally, short-term rentals for tourism purposes are subject to an 18% value-added tax (ITBIS). Under current law, the property owner (the host) is responsible for collecting and remitting this tax, not the booking platform. An accountant can provide guidance on the most effective way to manage these obligations. It is important to factor these taxes into any rental income projections.

What do these tax benefits look like side-by-side?

The difference between purchasing a standard property and a CONFOTUR-approved residence at Andara is substantial. The table below outlines the key distinctions for a first-time buyer from the developer.

Who handles the tax filings and legal side of my purchase?

Navigating the purchase process and ensuring all tax exemptions are correctly applied is the role of a qualified Dominican real estate attorney. A buyer will retain an attorney to conduct due diligence, draft and review the purchase agreement, and manage the title transfer process.

This legal professional is responsible for filing the necessary paperwork with the Dominican tax authority (DGII) and the Title Registry Office to secure the CONFOTUR exemptions on your behalf. Their role is to verify that the title to your Andara residence is issued free and clear, with the tax benefits properly recorded, and to raise anything that is not. Choosing an experienced attorney is a critical step in any property purchase in the Dominican Republic.

Common questions

Is the 15-year IPI tax exemption guaranteed for me as a buyer?

The CONFOTUR law grants a fifteen-year IPI exemption to qualifying tourism projects like Andara. As a first buyer from the developer, you are within the class the law's exemptions are written for; the fifteen years is the term set for the qualifying project, not a term stated for an individual acquirer. Your attorney will file the necessary documents to have this exemption recorded on your property's title and can confirm the exact terms as they apply to your purchase.

Do I pay the 3% transfer tax if I sell my Andara condo later?

The CONFOTUR tax exemptions, including the 3% transfer tax waiver, apply only to the first transfer of title from the developer to the initial buyer. Any subsequent resale of the property would be subject to the standard 3% transfer tax, which is typically paid by the new buyer.

What happens if I don't rent out my condo? Do I still pay rental taxes?

No, taxes on rental income only apply if you actually generate income from renting the property. If you choose to keep your Andara residence exclusively for private use and do not rent it out, the 27% withholding tax and 18% ITBIS on tourist stays would not be applicable.