How smart investors are saving tens of thousands of dollars on Caribbean real estate and why buying “new” is the only way to get them.

When you dream of buying property in the Dominican Republic, you are likely picturing turquoise waters, swaying palms in Las Terrenas and a relaxed pace of life, often while exploring new developments and properties for sale in Las Terrenas. You probably aren’t dreaming about tax codes, government acronyms, or closing costs.

However, if you are serious about maximizing your return on investment (ROI), there is one word you need to memorize before you sign a single contract: CONFOTUR.

At Navetta Properties, we believe that a great investment isn’t just about finding the perfect villa; it’s about structuring the purchase to protect your wealth through proper ownership planning and professional property management. The Dominican Republic offers one of the most competitive tax incentive programs in the Caribbean, established under Law 158-01 (CONFOTUR). For qualified properties, it can dramatically reduce, or eliminate, the taxes a buyer would otherwise carry for years.

In this guide, we will break down exactly what CONFOTUR is, calculate your real-world savings and explain why being the first buyer is critical to unlocking these benefits.

What is CONFOTUR?

CONFOTUR stands for the Consejo de Fomento Turístico (Tourism Promotion Council). It is the regulatory body responsible for applying Law 158-01, enacted to stimulate tourism development in the Dominican Republic.

The government recognized that to compete with other global destinations, it needed to attract high-quality construction and foreign capital. To do this, it created a suite of tax incentives designed to encourage developers to build hotels, resorts and residential tourist communities in specific areas (like Samaná, Punta Cana, Puerto Plata and Las Terrenas) that have high ecological and touristic value.

While the law was originally written to help developers build, the benefits “flow down” to the first buyer of a qualifying condo or villa within an approved development.

The Three Core Benefits

If you buy a property that is not under the CONFOTUR umbrella, you are subject to standard Dominican property taxes. If you buy a new property with CONFOTUR certification, you are exempt from three significant taxes for a period of up to 15 years from project completion (Law 158-01, as amended by Law 195-13).

1. The Transfer Tax Exemption (Immediate Savings)

In a standard transaction, the buyer must pay a 3% Transfer Tax (Impuesto de Transferencia) based on the appraised value of the property to transfer the Title Certificate into their name.

Without CONFOTUR: On a $350,000 USD condo, you would write a check to the government for $10,500 USD at closing.
With CONFOTUR: You pay $0.

This is immediate liquidity that stays in your pocket: money you can put toward furnishing the unit or covering other closing costs.

2. The IPI Property Tax Exemption (Long-Term Wealth)

This is where the savings truly compound. The IPI (Impuesto al Patrimonio Inmobiliario) is the annual 1% Real Estate Property Tax, charged on property value above an exemption threshold that is adjusted annually for inflation. For 2026 the individual threshold is RD$10,695,494 (approximately $175,000 USD at current exchange rates).

Without CONFOTUR: You are required to file and pay this 1% tax every year on the value above the threshold.
With CONFOTUR: You are 100% exempt from IPI for the duration of the project’s classification period.

3. The Income Tax Exemption (Including Rental Income)

Under Article 4 of Law 158-01, the 100% exemption also covers income tax (Impuesto sobre la Renta), and Article 7 sets a single exemption period for that entire regime. In practice, this means rental income generated by a qualifying property can be exempt from Dominican income tax for the same period, subject to the conditions of the project’s certification. For an investor renting on the short-term market, that is a meaningful addition to net yield. (Always confirm the specifics with a Dominican tax advisor for your residency status and structure.)

The “10 vs. 15 Years” Question

You will often see both numbers used online, so let’s clarify.

The original text of Law 158-01 (2001) set the exemption period at 10 years from project completion. An amendment, Law 195-13 (2013), revised Article 7 and extended the period to 15 years to keep the country competitive.

Today, 15 years is the current statutory term. Articles still citing “10 years” are quoting the superseded pre-2013 text. That said, the exact duration and scope attach to the specific resolution granted to each project, so it is always worth verifying the resolution for the development you are buying into. Two further points matter:

The 15 years runs from the completion of the project’s construction, not from your purchase date. A buyer receives the remaining years on the project’s clock.
The benefit applies to those who acquire directly within the approved development. Under Article 4 of the law, it does not extend to subsequent third-party (resale) buyers. More on that below.

The Math: A Real-World Scenario

Let’s look at the numbers. Assume you are purchasing a 2-bedroom apartment in a new development in Las Terrenas priced at $350,000 USD.

Scenario A: Buying a Standard Resale (Non-CONFOTUR)

Purchase Price: $350,000
Transfer Tax (3%): $10,500 (paid at closing)
Annual IPI Tax (~1% on the ~$180,000 surplus above the threshold): ~$1,800 per year
15-Year Tax Cost: $27,000 (IPI) + $10,500 (Transfer) = **$37,500** total tax liability

Scenario B: Buying a CONFOTUR Project with Navetta Properties

Purchase Price: $350,000
Transfer Tax: $0
Annual IPI Tax: $0
15-Year Tax Cost: $0

The Result: By choosing a CONFOTUR-certified property, you save roughly $37,500 over the life of the exemption, before counting the potential income-tax savings on rental earnings.

Important: Does CONFOTUR Apply to Resales?

No. This is the most common and costly misconception.

The CONFOTUR benefits are explicitly designed to incentivize the development of new tourism projects. Therefore, the exemptions are granted only to the first acquirer who purchases directly from the developer. Law 158-01 (Art. 4) expressly excludes any subsequent transfer to third-party buyers.

If you sell your CONFOTUR unit: the new buyer (second acquirer) will not inherit your exemptions. They will pay the 3% Transfer Tax on purchase and become liable for the annual IPI going forward.

The Strategic Takeaway: This rule makes new-construction and pre-construction properties significantly more valuable than resales for tax-focused investors. This is why investors focused on tax efficiency prioritize buying new construction properties in Las Terrenas rather than resales. When you buy new with Navetta Properties, you are securing a tax-advantaged asset that a resale buyer simply cannot access. (For more on the process, see our Buyer’s Guide and our guide to escrow in the DR.)

Is Every Property in Las Terrenas Exempt?

No. Just because a condo is in Las Terrenas (a designated tourism zone) does not mean it automatically gets the tax break.

The developer must go through a formal application and obtain a definitive classification resolution from CONFOTUR, the council chaired by the Minister of Tourism (MITUR), with the Ministry of Finance among its members. Only projects holding that resolution carry the exemptions.

Verification is Key: At Navetta Properties, we perform due diligence on every pre-construction development we represent, confirming the CONFOTUR classification before you commit, supported by ongoing property management and ownership oversight, so you can sign your contract with confidence. (See also our guide to the Certificate of Legal Status.)

A Note for Foreign Investors

One of the best aspects of the CONFOTUR law is that it does not discriminate based on nationality.

No Restrictions: You do not need to be a Dominican citizen or resident to claim these benefits.
Legal Certainty: Foreign buyers hold freehold title with the same rights as Dominican citizens under Law 108-05, within a stable, registered framework.

Keep in mind that a Dominican exemption does not erase your obligations at home. Many countries (including the United States) tax worldwide income. Our guide for foreign buyers covers banking and residency considerations.

Frequently Asked Questions

1. Can I transfer the CONFOTUR benefits if I sell the property? No. The benefits are exclusively for the first purchaser who buys directly within an approved development. A resale buyer is subject to standard Dominican property taxes.

2. How long does the exemption last? Up to 15 years from the date the project completes construction and receives its final documentation, under Law 158-01 as amended by Law 195-13. The exact term is set by each project’s CONFOTUR resolution.

3. Does the exemption include rental income? Law 158-01 (Art. 4) extends the exemption to income tax, which can include rental income for the project’s exemption period, subject to certification conditions. Confirm your specific situation with a qualified Dominican tax advisor.

4. Can I use the property as a full-time residence? Yes. While the law is designed to promote tourism, there are generally no restrictions preventing owners from using a qualifying property as a full-time residence or vacation home.

The Navetta Approach: Maximizing Your Investment

Navigating the tax laws of a foreign country can be intimidating, but it is often the difference between a good investment and a great one. At Navetta Properties, we specialize in identifying high-yield real estate opportunities in Las Terrenas and the Samaná Peninsula that offer these specific tax advantages. We don’t just sell you a view; we help you find a sound financial asset.

Ready to explore tax-advantaged ownership in the Caribbean? Browse our portfolio of CONFOTUR-approved developments today, or contact us to discuss which projects offer the best combination of ROI and tax efficiency. For the full market picture, see our Las Terrenas investment analysis.

Sources & References

Law No. 158-01 on the Promotion of Tourism Development (9 October 2001), Articles 4 and 7, official text published by the Dirección General de Impuestos Internos (DGII): Ley 158-01 (PDF)
Amendments: Law No. 184-02 (2002), Law No. 318-04 (2004), and Law No. 195-13 (2013). This last one amended Article 7, extending the exemption period from 10 to 15 years.
Application Regulation: Decree No. 372-14, which consolidates the law and its amendments.
CONFOTUR (Consejo de Fomento Turístico), Ministry of Tourism (MITUR): confotur.mitur.gob.do
Property and income tax administration: Dirección General de Impuestos Internos (DGII): dgii.gov.do

Disclaimer: Navetta Properties provides this information for educational purposes only. It does not constitute legal or tax advice. Tax outcomes depend on your residency status, ownership structure, and each project’s specific CONFOTUR resolution. We always recommend consulting a licensed Dominican attorney and a qualified tax advisor before transacting.

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