Closing costs and taxes when you buy in the DR

Most guides to Dominican closing costs give you a percentage and stop. The percentage is easy. What catches foreign buyers out is the three things around it: how the tax base is actually determined, what the property costs to hold every year afterwards, and what happens on the way out.

This page covers all four stages, with the figures in force in August 2026. That date matters more than usual this year, because a tax reform passed in June 2026 changed two of the numbers that most published guides still quote the old versions of.

The transfer tax, and the detail that surprises people

The largest single closing cost is the property transfer tax at 3%. The rate is not the interesting part. The base is.

DGII's own guidance states it plainly: the 3% applies to the higher of the value of the property and the value of the deed of sale. Not the contract price. Not DGII's appraisal. Whichever of the two is greater.

The tax must be settled within six months of the deed, after which late-payment surcharges and indemnity interest apply. In practice you pay it well before that, because the Registro de Títulos will not issue a new title without proof of payment.

What you pay at closing

Two worked scenarios on a property assessed at RD$20,000,000, one an ordinary resale and one a new build inside an approved CONFOTUR project bought directly from the developer. Legal fees are a negotiated market range rather than a fixed tariff, so they are shown at a mid-point of 1.25%.

Agent commission is normally paid by the seller and built into the asking price rather than added to your side of the table. If a purchase presents commission as a buyer cost, ask why.

The CONFOTUR column comes with a condition attached that we cover in full in our CONFOTUR guide: the exemption belongs to the first buyer from the developer and does not pass to a second buyer on resale. If you are buying a resale unit inside a CONFOTUR development, use the left-hand column.

The annual bill

How a property is taxed each year depends entirely on who owns it, and the three cases are genuinely different rather than variations on a theme.

Individuals

You fall under IPI, the Impuesto al Patrimonio Inmobiliario. For 2026 the exempt amount is RD$10,695,494, and 1% applies to value above it. The declaration is filed in the first sixty days of the year and the tax is paid in two instalments, on 11 March and 11 September.

Companies

A Dominican company holding real estate is not an IPI taxpayer at all. This is the most commonly misstated point in DR tax summaries, which usually say companies get no IPI exemption. They do not file IPI. They fall under the separate 1% asset tax instead, which has no equivalent exemption threshold, so the whole value is in scope.

Trusts

A fideicomiso is an IPI taxpayer but gets no exempt amount. It pays 1% on the full taxable value.

The practical consequence is that for a single home below or near the threshold, personal ownership is markedly cheaper to hold. The calculus changes with multiple properties, with higher values, and with estate-planning objectives, which is why the structure question belongs before the promise of sale rather than after.

Year one, all in

Nobody publishes this figure, and it is the one buyers actually want. Same RD$20,000,000 property, ordinary resale, held by an individual.

On a resort-corridor condominium, the non-tax line items in the bottom two rows frequently exceed the tax line items above them in the first year. A guide that gives you a closing-cost percentage and calls it the cost of buying is telling you less than half the story.

If you rent it out

Two separate taxes apply, and they work differently. Neither is affected by CONFOTUR status.

ITBIS on short-term letting

ITBIS is 18%. Long-term residential letting is an exempt service, but DGII expressly treats tourist accommodation as taxable, naming tourist apartments and aparthotels among the taxable categories. Holiday letting therefore sits on the taxable side of that line.

There is no registration threshold. The obligation begins with the first supply rather than at some level of annual turnover, and it applies to foreign owners on the same terms.

Tax on the rental income

Rental income from a Dominican property is Dominican-source income. Where rent is paid abroad, the withholding on Dominican-source income remitted to a non-resident is 27%, as a single and final payment, with a reduced treaty rate of 18% for residents of Canada.

Separately, a domestic payer withholding on rent paid to an individual applies 15% from 1 July 2026, raised from 10% by Law 30-26 and converted from a payment on account into a final tax. That withholding is an obligation of the payer, which is a detail most foreign-buyer guides miss entirely.

When you sell

This is where the June 2026 reform lands hardest, and where published guides are furthest out of date.

Law 30-26 inserted a new article into the Tax Code taxing capital gains on the disposal of real estate owned by individuals at a flat 10%, as a single and final payment. It took effect immediately on the law's promulgation in June 2026. Previously, individuals were taxed under the ordinary income tax scale.

Property held through a company remains inside the corporate income tax regime at 27%. A temporary higher rate of 30% applies to taxpayers with very large revenues for fiscal periods 2026 to 2028.

The reform also added two exemptions for individuals: a primary residence sold with the proceeds reinvested in a new primary residence within six months, applied proportionally where reinvestment is partial, and a full exemption for sellers over 65 on their primary residence. Neither is likely to apply to an investment purchase, but both are worth knowing if the property becomes your home.

The 2026 figures in one place

What changed in June 2026

Law 30-26 was promulgated on 18 June 2026 and DGII published an implementation calendar shortly afterwards. Three changes affect property buyers:

• Capital gains on real estate sold by individuals moved to a flat 10% single and final payment, effective immediately.
• Withholding on rent paid to individuals rose from 10% to 15% from 1 July 2026, and became a final tax rather than a payment on account.
• New capital gains exemptions were added for a reinvested primary residence and for sellers over 65 on their primary residence.

If you are reading a DR tax guide that quotes a progressive capital gains scale for individuals, or a 10% rental withholding, it predates this reform. That includes several pages currently ranking on these searches.

Where the numbers change by location

The tax rules are national and identical everywhere. What varies is the base: a condo in Punta Cana or Cap Cana sits well above the IPI exempt amount, while entry-level stock on the north coast around Puerto Plata or Sosúa can sit near or below it, which changes the annual holding cost materially. You can compare across markets from our Dominican Republic page.