DOMINICAN REPUBLIC Trends and Developments Contributed by: Alexander D’Oleo Gabriel and Saymi Lahoz, DHOZ Abogados
it makes the Dominican Republic more competi - tive than other countries that restrict tax benefits to permanent residents. Instead, the Dominican Republic grants these benefits based solely on property ownership and the owner’s age. Competitive advantage in the real estate market Many Latin American and European countries offer tax incentives to foreigners but under resi - dency visa schemes. In contrast, the Dominican Republic does not require residency as a condi - tion for exemption from the Real Estate Property Tax (IPI), making it a more flexible destination for retirees looking to purchase property. Incentive for retirement property purchases With the increasing interest in retirement-friendly residences, this exemption adds attractiveness for real estate developers selling properties to retired foreign buyers. The elimination of this tax burden serves as an additional factor in the decision-making process for those considering relocating to the Dominican Republic either par - tially or permanently. Legal considerations and procedures for applying for the Real Estate Property Tax (IPI) exemption The procedure to apply for the Property Tax (IPI) exemption requires submitting the following documents to the General Directorate of Internal Revenue (DGII). • Copy of the property title, certifying that the applicant is the sole owner of the real estate. • Identification document (Dominican cedula or passport, in the case of foreigners). • Sworn declaration stating that the applicant does not own other properties in the country.
• Proof that the property is their primary resi - dence, which may include utility bills or a notarised declaration. Economic considerations of the exemption Beyond its impact on foreign investment, the Real Estate Property Tax (IPI) exemption for indi - viduals over 65 years old has broader economic implications, including the following. Development of foreign-oriented real estate projects The expansion of affordable real estate projects has led to an increase in the construction of low- maintenance residences and condominiums in tourist zones such as Punta Cana, La Romana and Las Terrenas. Increased foreign currency inflows Each foreigner who acquires a property in the Dominican Republic contributes indirect income to the country through the consumption of local goods and services. Impact on the Dominican Republic’s fiscal policy Although the government forgoes revenue from Real Estate Property Tax (IPI) exemptions, this loss may be offset by the increase in real estate transactions and the expansion of the service sector. A legal entity (company) cannot obtain this exemption. The Real Estate Property Tax (IPI) exemption applies only to individuals, meaning that foreigners who purchase property through corporations or trusts are not eligible for this tax benefit.
339 CHAMBERS.COM
Powered by FlippingBook