DOMINICAN REPUBLIC Trends and Developments Contributed by: Alexander D’Oleo Gabriel and Saymi Lahoz, DHOZ Abogados
benefits, and eventually apply for Dominican nationality. • Investor Residency – Valid for two years (renewable and later convertible into definitive residency). • Residency for Pensioners and Rentiers – Valid for two years (renewable and later convertible into definitive residency). Offers tax exemp - tions on remittances and some imported goods, a faster residency application process, and the possibility of obtaining Dominican nationality in a shorter timeframe. • Residency by Dominican Nationality of Origin – Grants automatic residency with the option to acquire Dominican nationality within a short period. • Definitive Residency – Indefinite duration. Does not require frequent renewals and offers the possibility of naturalisation as a Domini - can citizen. The relationship between these various resi - dency categories and access to tax exemp - tions, such as the Real Estate Property Tax (IPI) exemption, warrants a detailed analysis as it may represent a significant advantage for those seeking to establish themselves in the country without facing excessive tax burdens. The following will examine how this exemption contributes to the attractiveness of the Domini - can real estate market, its specific benefits for investors and foreign residents, as well as the potential challenges that may arise in its appli - cation. Legal framework of the Real Estate Property Tax exemption for individuals over 65 years old The Real Estate Property Tax (IPI) is an annual tax levied on real estate assets in the Domini - can Republic that exceed DOP10,190,833.00
(adjusted annually for inflation). This tax is applied at a rate of 1% on the amount exceed - ing this threshold. Law No 18-88, which amends the Dominican Tax Code, states in paragraph III of Article 2 (modi - fied by Law No 253-12, dated 9 November 2012) that individuals over 65 years old are exempt from paying this tax, provided they meet the fol - lowing conditions: • they must be the owner of a single property; and • they must not own any other registered real estate under their name within the country. Interpretation of the benefit for foreigners Unlike other tax exemptions in the Dominican Republic, such as those granted under the Tour - ism Incentive Law (Law 158-01), Law No 18-88 does not require beneficiaries to have obtained Dominican residency (either temporary or per - manent). As a result, a foreigner over 65 years old who owns a single property in the country can ben - efit from the exemption from paying Real Estate Property Tax (IPI), regardless of their immigra - tion status. This interpretation encourages for - eign investment in real estate and aligns with the Dominican Republic’s strategy to promote itself as an attractive destination for retirees and elderly individuals. Impact of the exemption on foreign investors Legal security for foreign investors The fact that the Real Estate Property Tax (IPI) exemption does not require residency provides greater certainty and predictability for foreign investors seeking to acquire property in the country without undergoing immigration or tax residency processes. This is a crucial aspect, as
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