DOMINICAN REPUBLIC Trends and Developments Contributed by: Alexander D’Oleo Gabriel and Saymi Lahoz, DHOZ Abogados
DHOZ Abogados Boulevard 1ro. de Noviembre GAL Business Center, Suite 32 Puntacana Village La Altagracia Dominican Republic Tel: +1 809 959 1011 Email: info@dhoz.com.do Web: dhoz.com.do
Property Tax Exemption for Individuals Over 65 Years Old in the Dominican Republic: Scope and Application to Foreigners Without Residency Introduction Among the various tax exemptions available in the Dominican Republic, there is one that grants an exemption from the payment of the Real Estate Property Tax (IPI) to individuals over 65 years old who own a single real estate property used as their primary residence. This incentive is intended to ease the tax burden on individuals who meet these criteria, thereby ensuring stabil - ity and security in homeownership. In addition to its direct positive impact on domes - tic property owners, this exemption also benefits foreigners, further establishing the Dominican Republic as an attractive destination for real estate investment and retirement. The possibil - ity of acquiring property and benefiting from this incentive without the need to obtain Dominican residency through the established immigration processes is a distinctive factor that has piqued the interest of investors and legal advisers. This aspect is particularly relevant in a global context, where many countries impose tax restrictions on non-residents, making the Dominican Republic a competitive option in the region.
However, an important yet rarely discussed aspect of this exemption is that it does not require the beneficiary, if they are a foreigner, to hold Dominican residency, whether temporary or permanent. This provision has raised ques - tions among foreign investors, attorneys and tax advisers, given that Dominican tax law generally favours tax residents. This chapter of the guide will explore the scope of this provision, its impact on the real estate sector, and the legal and tax implications for foreigners who own property in the Dominican Republic. Types of residency in the Dominican Republic In terms of residency, the Dominican Republic offers several types of permits that allow foreign - ers to live legally in the country. The following are the main types of residency, listed in an explana - tory manner. • Temporary Residency – Valid for one year. Allows individuals to work and live legally in the country, access the banking system and obtain tax benefits in certain cases. • Permanent Residency – Valid for two years (renewable for four years and later eligible for definitive residency). This permit allows individuals to live and work in the country without annual renewal, access tax and social
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