CONFOTUR explained: the DR's tax incentive for buyers

CONFOTUR is the reason two apparently identical condominiums a few hundred metres apart can carry closing costs that differ by tens of thousands of dollars. It is the most valuable incentive available to a foreign buyer in the Dominican Republic, and it is also the one most often described inaccurately by the people selling it.

The two points that matter most, and that most buyer guides get wrong, are how long the exemption lasts and whether it survives a resale. Both are settled in the statute. We quote it below.

What CONFOTUR actually is

Law 158-01, passed in October 2001, created the Dominican Republic's tourism development incentive regime. Its purpose is to attract capital into designated tourism zones by removing most of the tax burden from qualifying projects and, importantly for you, from the people who buy units in them.

Applications are decided by the Consejo de Fomento Turístico, the body the acronym refers to. Under the 2014 implementing regulation it is chaired by the Minister of Tourism and includes the Ministers of Environment, Finance and Culture plus a representative of the national hotel and tourism association.

A developer applies for the project. If the council grants it, the resolution covers the development, and buyers of units inside that development receive the benefits through it. You cannot apply for CONFOTUR yourself, and no amount of negotiating gets it added to a property that does not have it.

What it exempts

Article 4 of Law 158-01 grants a 100% exemption from income tax, from national and municipal taxes on construction permits including the acts of purchasing the land, and from import duties and ITBIS on first-equipment goods for the project.

Worth noting precisely, because most summaries skip it: the statute never uses the words "IPI" or "impuesto de transferencia inmobiliaria." The two exemptions that matter most to a residential buyer, the 3% transfer tax and the 1% annual property tax, come from how DGII administers Article 4 rather than from the words of the statute. DGII's own published exemption list for Law 158-01 includes real estate transfers and IPI, so the position is clear in practice. It just is not where people usually say it is.

How long it lasts: fifteen years, not ten

The original 2001 text set the exemption period at ten years. Article 9 of Law 195-13, passed in December 2013, amended Article 7 of Law 158-01 to read fifteen years, running from the date construction and equipping of the project are completed.

That completion-date start point matters more than it sounds. On a pre-construction purchase the clock does not begin when you sign or when you pay. It begins when the project finishes, which is generally in your favour.

The resale rule almost nobody states correctly

This is the single most valuable thing on this page, and it cuts against how CONFOTUR is usually marketed.

Article 7 of Law 195-13 added a fourth paragraph to Article 4 of Law 158-01. Translated, it says the exemptions established by the law are available to natural or legal persons who make one or more investments directly with the promoters or developers, and it expressly excludes from those benefits any subsequent transfer in favour of third-party acquirers.

DGII administers it the same way. Its guidance on who is exempt from IPI limits the CONFOTUR exemption to properties acquired in Law 158-01 tourism projects belonging to first acquirers.

So the benefit does not run with the property. It belongs to the person who bought from the developer, and it ends when they sell.

What CONFOTUR does not cover

Buyers routinely over-model the benefit because the exclusions are rarely spelled out. Four matter.

Capital gains on resale

DGII's exemption list for Law 158-01 does not include capital gains on a later sale. Since Law 30-26 took effect in June 2026, gains on real estate sold by individuals are taxed at a flat 10% as a single and final payment. Property held through a company is taxed inside the 27% corporate regime. A CONFOTUR unit is not treated differently on exit.

ITBIS on short-term rental

If you let the unit to holidaymakers, that is a taxable supply at 18%. Long-term residential letting is ITBIS-exempt, but DGII treats tourist accommodation, including tourist apartments and aparthotels, as taxable. There is no registration threshold, so the obligation starts with the first booking rather than at some level of turnover.

Tax on the rental income itself

Rental income arising in the DR is Dominican-source income and is taxed regardless of the unit's CONFOTUR status. The mechanics depend on whether rent is paid to you abroad or through a local manager, and Law 30-26 changed the withholding rates from July 2026, so this is worth specific advice rather than a rule of thumb.

Everything that is not a tax

HOA and maintenance charges, utilities, insurance, management fees and furniture are unaffected. On a resort-corridor condo these routinely exceed the tax saving in year one.

What it is actually worth

Here is the arithmetic on a property assessed at RD$20,000,000, held by an individual, using the rates in force in 2026. Treat it as illustrative rather than as a quote: DGII re-indexes the IPI exemption threshold every year, and the assessed value moves too, so a real fifteen-year total will differ.

Two honest caveats. Holding the threshold flat across fifteen years understates it, because DGII raises the exempt amount annually, which reduces the tax due at the bottom end. And the whole saving is worth nothing if the project never gets built, so the CONFOTUR resolution is not a substitute for developer due diligence.

How to verify a project really has it

"CONFOTUR approved" appears in a great many listings, sometimes for projects that have applied rather than been granted. Four checks, in order of how much they tell you.

1. Ask for the resolution itself, not a marketing sheet. You want the CONFOTUR resolution number and date, issued to the named project company.
2. Check the name on the resolution matches the entity you are actually contracting with. Developers often build through a project-specific company, and the resolution belongs to that company.
3. Confirm the resolution covers your specific unit or phase. A large development can be approved in stages, and later phases are not automatically included.
4. Confirm you are buying directly from the developer rather than from a first buyer reselling, because the exemption does not survive that transfer.

If a seller cannot produce the resolution, treat the property as if it has no CONFOTUR status and budget the full 3%. Our step-by-step buying guide covers where this fits into due diligence, and the closing costs guide has the full cost picture either way.

Where CONFOTUR projects tend to be

The regime targets designated tourism zones, so approved projects cluster where tourism development is concentrated: the resort corridor around Punta Cana, Bávaro and Cap Cana, the Samaná peninsula around Las Terrenas, and the north coast at Cabarete and Sosúa. It applies overwhelmingly to new-build and pre-construction rather than resale housing stock, which follows directly from the first-acquirer rule.