The Complete Guide to the Real Estate Wealth Tax (IPI) in the Dominican Republic
Owning a piece of paradise comes with responsibilities. Here is everything you need to know about the annual property tax (IPI) and how to determine if you even have to pay it.
When buying a villa in Las Terrenas or a condo in Samaná, the focus is usually on the view, the beaches, and the lifestyle. But as you settle into ownership, you will encounter a tax acronym that every property owner in the Dominican Republic must know: IPI.
At Navetta Properties, we believe that a smart investor is an informed investor. Understanding your tax obligations is just as important as finding the right property. Whether you are a foreign retiree, a local investor, or a trust beneficiary, this guide breaks down exactly what the IPI is, how it is calculated for 2025, and the exemptions that might save you thousands.
What is the IPI?
The IPI (Impuesto Patrimonio Inmobiliario) is an annual tax levied on the total wealth of real estate owned by Individuals (Natural Persons) and Trusts (Fideicomisos) in the Dominican Republic.
Think of it as a "wealth tax" rather than a simple property tax. It is calculated based on the cumulative value of all the properties you own (houses, apartments, and urban lots) rather than on each property individually for individuals.
Note: Generally, companies (Personas Jurídicas) pay a different tax called the "Tax on Assets" (Impuesto a los Activos), not IPI, unless they are specific types of Trusts.
Who Has to Pay?
Not everyone pays IPI. In fact, many property owners are completely exempt based on the value of their holdings.
1. Individuals (Personas Físicas)
You only pay IPI if the combined value of all your properties exceeds the exemption threshold set by the General Directorate of Internal Revenue (DGII). This amount is adjusted annually for inflation.
The 2025 Exemption Threshold: RD$10,190,833.00 (approximately $172,000 USD, depending on the exchange rate)
If the total value of your real estate portfolio is below this amount, you pay $0 in IPI tax.
2. Trusts (Fideicomisos)
Trusts do not get the benefit of the exemption threshold. They must pay the tax on the total value of the properties they hold, starting from the first peso.
How is IPI Calculated?
The tax rate is 1% per year, but the calculation differs depending on who owns the property.
For Individuals:
You pay 1% on the surplus (the value above the exempt amount).
Example Calculation (2025): Let's say you own a villa valued at RD$12,000,000.
Total Value: RD$12,000,000
Less 2025 Exemption: RD$10,190,833
Taxable Surplus: RD$1,809,167
Tax Due (1%): RD$18,091.67 (approx $300 USD for the year)
For Trusts:
You pay 1% on the total value.
Example: A trust owns the same villa valued at RD$12,000,000.
Taxable Amount: RD$12,000,000
Tax Due (1%): RD$120,000
Insider Tip: The value used for this calculation is determined by the National Cadastre (Catastro Nacional), not necessarily the commercial purchase price. Often, the "Cadastral Value" is lower than the market value, which can be favorable for the taxpayer.
When Do You Pay?
The DGII splits the payment into two semiannual installments to make it easier for taxpayers:
1st Installment: Due by March 11.
2nd Installment: Due by September 11.
Note: You must file your IPI declaration (Declaración Jurada) within the first 60 days of the year, though for many individuals with updated records, this is automatically generated by the DGII system.
Exemptions: How to Legally Pay $0
Before you worry about the bill, check if you qualify for one of these major exemptions:
1. The Age Exemption (65+) If you are over 65 years old, you are exempt from IPI on your home, provided that:
The property serves as your dwelling.
It is the only real estate property you own.
2. Pensioners and Rentistas (Law 171 07) Foreigners who have obtained residency under the specific "Pensioner or Rentista" law are entitled to a 50% exemption on their annual IPI tax.
3. Rural and Agricultural Land Rural properties used for agriculture are generally exempt from this tax.
4. CONFOTUR Properties (The "Golden Ticket") This is the most powerful exemption for investors. Properties located within projects approved under Law 158 01 (CONFOTUR) are 100% exempt from IPI for a period of up to 15 years.
Read our full guide on CONFOTUR benefits to see how this can save you thousands.
How to Pay
The Dominican Republic has modernized its tax system significantly. You do not need to stand in line at a government office.
Online: You can file and pay via the DGII Virtual Office (Oficina Virtual).
In Person: Payments are accepted at authorized commercial banks or DGII local administration offices.
The Navetta Properties Advice
For foreign buyers, the tax system can seem intimidating, but it is actually quite favorable compared to North America or Europe. The holding costs in the Dominican Republic are incredibly low; remember, if your property is valued under 10.1 Million Pesos, your annual property tax is zero.
If you are looking for tax efficient investments, Navetta Properties specializes in pre construction developments that qualify for the 15 year CONFOTUR exemption, effectively eliminating this tax entirely for the duration of the benefit.
Have questions about a specific property? Contact our team today. We don't just help you buy; we help you navigate the entire landscape of ownership in the Dominican Republic.
Disclaimer: Navetta Properties provides this information for educational purposes. We always recommend that our clients consult with a local attorney and tax professional to understand their specific tax liabilities.