IPI — Annual Property Tax
The Impuesto a la Propiedad Inmobiliaria (IPI) is the Dominican Republic's annual property tax. Here's what foreign buyers owe, when they owe it, and how to legally eliminate it.
What is IPI?
IPI is a 1% annual tax levied on the assessed value of residential real property in the Dominican Republic above an exemption threshold (approximately RD$10 million, or roughly $170,000 USD at current rates). The threshold is adjusted periodically by the DGII. Properties assessed below the threshold owe no IPI.
How is assessed value determined?
The DGII assigns an assessed value (valor catastral) to each property. This value is typically below market value — often 40–70% of what the property would sell for. The tax is applied to the assessed value, not the purchase price. For a $500,000 market-value property assessed at $280,000, the annual IPI would be approximately $2,800 (after the exemption threshold).
Who pays IPI?
- Individual non-resident foreign buyers — IPI applies the same as for DR citizens
- Corporations (SRL/SA) that own property — corporate-held properties do not qualify for the exemption threshold; they pay 1% on the full assessed value
- Properties held in trusts (fideicomiso) — taxed at the corporate rate unless structured correctly
- CONFOTUR-exempt properties — IPI is fully waived for the duration of the exemption period
When is IPI due?
IPI is payable in two installments: March 11 and September 11 of each year. Payments are made directly to the DGII. Late payments accrue interest and penalties. Our legal team can set up automatic payment reminders and handle filings on your behalf.
How to eliminate IPI with CONFOTUR
Properties that qualify under Law 158-01 (CONFOTUR) receive a full exemption from IPI for 15–20 years. This is the most effective legal tool for foreign buyers to eliminate property tax entirely. The exemption transfers with the property on resale, for the remaining term. See our CONFOTUR guide for full eligibility details.
Corporate ownership and IPI
Many buyers purchase DR property through a Dominican SRL or SA (similar to an LLC or corporation) for estate planning or liability protection purposes. Be aware: corporate-owned properties do not qualify for the individual exemption threshold. The 1% is applied to the full assessed value from the first peso. For most residential buyers, individual ownership is more tax-efficient unless the property value is very high or there are specific estate planning needs.
Questions about your specific property?
Our attorneys can calculate your estimated IPI, confirm whether your property qualifies for CONFOTUR exemption, and advise on the most tax-efficient ownership structure.