What CONFOTUR Means for Your Riviera Bay Purchase

The Dominican law for promoting tourism development, commonly known as CONFOTUR, provides significant tax benefits for first-time buyers at approved projects like Riviera Bay. For a qualifying purchase here, these incentives include an exemption from the 3% property transfer tax and the 1% annual property tax (IPI). This framework is designed to encourage investment in high-quality tourism developments in areas like Cana Bay.

How does CONFOTUR apply to a pre-construction property like Riviera Bay?

As a pre-construction project by Noval Properties, Riviera Bay has been designed and registered to meet the standards of the CONFOTUR law. This means the developer, Noval Properties, secures the classification for the entire 110-unit community. The tax benefits are then passed on to the first owner of each individual residence.

This is a crucial point for buyers: the benefit is tied to the initial purchase directly from the developer. When you acquire a condo at Riviera Bay, you are the first owner, making you eligible to receive the exemptions. Subsequent resales of the property do not carry the same transfer tax waiver. Your attorney will verify the project's CONFOTUR status as part of the due diligence process, ensuring the benefits are properly applied to your title upon completion.

What are the two main tax benefits at closing and during ownership?

The CONFOTUR law provides two primary financial advantages for qualifying buyers at Riviera Bay. One is a one-time saving at the time of purchase, and the other is an ongoing annual benefit. Understanding both is key to appreciating the full value of buying into a CONFOTUR-approved project.

1. At Closing 3% Transfer Tax Waived The one-time 3% tax on the property's value, normally paid to the government to transfer the title, is completely waived.
2. Annually 1% Property Tax (IPI) Exemption The annual 1% property tax, which is only levied on the value of a property above a government-set threshold, is also exempted.

How does the annual property tax (IPI) exemption work?

The annual property tax exemption is one of the most significant long-term benefits. In the Dominican Republic, this 1% tax, known as IPI, is not calculated on the full value of a property. Instead, it applies only to the value above an exemption threshold that is adjusted annually for inflation. For properties under this threshold, no IPI is due at all.

Under the CONFOTUR law, qualifying tourism projects receive an exemption from this IPI for a period of up to fifteen years. It's important to note that this fifteen-year term is specified in the law for the development project itself. The specific application of this benefit to an individual owner's title should be confirmed by your Dominican legal counsel during the purchase process. They will ensure the exemption is correctly registered for your specific unit, such as a 1-bedroom condo starting from 720 square feet.

Are taxes on rental income from my Riviera Bay condo also exempt?

This is a common and important question. What is documented is that CONFOTUR's benefits attach to property taxes—the 3% transfer tax and the 1% annual IPI—and that rental earnings are assessed under a separate part of the Dominican tax code. No source we hold addresses the interaction between the two in terms, so this page states the sourced position rather than a flat rule, and the answer for your own purchase belongs with your attorney.

Rental income is treated separately under the Dominican tax code. For non-resident owners, rental income is typically subject to a 27% withholding tax on the gross rental revenue. This is a definitive, single payment, and no deductions for expenses are permitted. Rates change, so confirm the current figure before you rely on it. For planning purposes the useful distinction is that CONFOTUR's exemptions reduce the cost of holding the property, and the rent it earns is assessed on its own footing. An owner's tax obligations should always be reviewed with a qualified tax advisor.

What is the process to ensure I receive the CONFOTUR benefits?

The CONFOTUR benefits are not automatic; they must be correctly filed and registered to your property's title. This is a standard part of the legal process when purchasing new, qualifying real estate in the Dominican Republic. An independent attorney handles these steps on your behalf.

1. Legal Due Diligence
   Before you finalize your purchase, your attorney conducts due diligence, which includes verifying Riviera Bay's official CONFOTUR registration with the Dominican Tourism Ministry (MITUR).
2. Filing with the DGII
   Your attorney submits the necessary documentation to the Dominican tax authority (DGII) to request the application of the tax exemptions to your specific unit.
3. Title Registration
   Upon completion of the property, the final step is registering the deed of sale at the Office of the Registry of Titles. Your attorney ensures the CONFOTUR exemptions are explicitly recorded on your official title document.
4. Final Confirmation
   You receive your registered title, which serves as the official proof of your ownership and the associated tax benefits.

Common questions

Do I need to be a resident to receive CONFOTUR benefits?

No, residency is not a requirement to receive CONFOTUR tax benefits. These exemptions are available to any qualifying first-time buyer of a property in an approved project like Riviera Bay, regardless of their nationality or residency status.

What happens if I sell my Riviera Bay condo?

The CONFOTUR benefits are tied to the first sale from the developer. The 3% transfer tax exemption applies only to this initial purchase. While the IPI exemption is tied to the property, its transferability to a new owner can be complex. Your attorney can provide guidance on the implications for a future sale.

Is every new development in Punta Cana CONFOTUR-approved?

No, not all new projects receive CONFOTUR status. Developers must go through a rigorous application and approval process. Riviera Bay's status as a CONFOTUR-approved project is a real advantage for a qualifying first buyer, because it is what makes the transfer-tax and IPI exemptions available on that first purchase at all.