DOMINICAN REPUBLIC Trends and Developments Contributed by: Alexander D’Oleo Gabriel and Saymi Lahoz, DHOZ Abogados
• Real Estate Property Tax (IPI) exemption for properties owned by foreign retirees. • Exemption from customs duties for importing household goods. • Exemption from income tax on foreign pas - sive income. The differences from the Real Estate Property Tax (IPI) exemption for seniors are as follows. • Law 171-07 applies exclusively to foreign retirees, while the Real Estate Property Tax (IPI) exemption benefits both locals and for - eigners. • Law 171-07 requires Dominican residency, while the Real Estate Property Tax (IPI) exemption does not. Additional example Consider a Canadian couple, Mark and Susan, who are both over 65 years old. They own a sin - gle villa in La Romana but still reside in Canada for most of the year. Despite not being Domini - can residents, they qualify for the Real Estate Property Tax (IPI) exemption. This benefit reduc - es their annual costs, making the Dominican Republic an appealing retirement destination. Conclusion The Real Estate Property Tax (IPI) exemption for individuals over 65 years old who own a single property in the Dominican Republic constitutes a highly favourable tax incentive. It not only benefits Dominican citizens but also extends its advantages to foreign nationals without requiring residency in the country.
This flexibility enhances the appeal of the Dominican real estate market, aligning it with global trends that seek to simplify tax burdens for retirees and facilitate foreign investment in real estate. Additionally, it complements other tax exemptions that have played a crucial role in the sector’s growth, such as the benefits grant - ed under Law 158-01, which promotes tourism development in underdeveloped areas and new tourism hubs in provinces with high potential, the special Free Zone regime, and Law 171-07, which provides incentives for foreign pensioners and rentiers. While each of these exemptions has its own focus, applicability and requirements, the IPI exemption for individuals aged over 65 stands out for its direct scope and immediate impact on cost reduction for individual property own - ers, without requiring a business investment or a specific immigration status. For investors and legal advisers, understanding this benefit and how to maximise its advantages within the existing legal framework is essential. With a favourable legal environment and a well- implemented strategy, this exemption repre - sents a competitive advantage for the real estate sector and a key incentive to attract stable and secure foreign investment in the Dominican Republic.
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