Your Guide to Property Taxes at Riviera Bay

As an owner at Riviera Bay, you can benefit from significant tax advantages thanks to the development's CONFOTUR status, which exempts qualifying buyers from the 3% transfer tax and the 1% annual property tax (IPI). Understanding how these taxes and exemptions work is key to appreciating the full value of your investment in one of our 110 residences in Cana Bay.

What taxes are due when I buy my Riviera Bay condo?

When purchasing real estate in the Dominican Republic, the primary tax at closing is the Property Transfer Tax. This is a one-time tax of 3% levied on the value of the property being transferred. However, Riviera Bay is a government-approved project under the Tourism Incentive Law, also known as CONFOTUR (Law 158-01).

This special designation is a major benefit for our first-time buyers. For qualifying purchasers buying directly from the developer, Noval Properties, the 3% transfer tax is waived. This exemption provides a substantial, immediate saving at the start of your ownership journey. The process of applying this exemption is handled by your attorney during the closing process, ensuring it is correctly registered on your property title.

What annual property taxes will I owe as an owner?

The standard annual property tax in the Dominican Republic is the Impuesto sobre el Patrimonio Inmobiliario, or IPI. This tax is set at a rate of 1% per year. It's important to note that this tax is not calculated on the full purchase price of the property. Instead, the 1% rate is applied only to the property's value above a government-established exempt threshold, which is adjusted annually for inflation.

As a CONFOTUR-approved project, Riviera Bay offers another significant advantage here. The law provides an exemption from this annual 1% IPI for qualifying new tourism projects for a period of up to fifteen years from the project's completion. That period is the term the law sets for a qualifying project, not a term granted to an individual buyer. Your attorney will confirm the specifics of how this exemption applies to your individual residence and ensure it is properly recorded.

If I rent my condo, is that income taxed separately?

Yes, and this is a critical distinction for investment-focused owners. CONFOTUR's exemptions are recorded against property taxes — the transfer tax and the IPI — while income generated from the property is assessed under its own part of the code. No source we hold rules directly on how the two meet, so treat that as a question for your attorney rather than as settled.

If you are a non-resident owner and you rent out your Riviera Bay condo, the rental income is subject to a 27% withholding tax. This tax is calculated on the gross rental income, with no deductions, and is considered a final, definitive payment. Additionally, short-term tourist rentals are subject to an 18% Value-Added Tax (known as ITBIS), for which the property owner is the liable party. These taxes are separate from the property-related exemptions and should be factored into any rental income projections. An accountant can provide guidance on these obligations.

How do I ensure these tax benefits are applied to my property?

Securing your tax benefits is a formal legal process, not an automatic one. It is handled by your independent Dominican attorney as a key part of the purchase and closing process. The procedure generally follows these steps to ensure your exemptions are officially recognized.

1. Engage Legal Counsel
   The first step is to retain a qualified Dominican real estate attorney. They will represent your interests throughout the transaction.
2. Verify CONFOTUR Status
   Your attorney will perform due diligence, which includes verifying Riviera Bay's current and valid CONFOTUR approval from the national tourism council.
3. File for Exemptions
   During the purchase process, your attorney will prepare and file the necessary documentation with the Dominican Republic's internal revenue service (DGII) to have the exemptions applied to your specific unit.
4. Receive Registered Title
   Upon closing, you will receive your official Certificate of Title, which will have the CONFOTUR exemptions officially recorded on it, providing legal proof of your tax benefits.

How do the Standard and CONFOTUR tax regimes compare?

The advantages of purchasing a residence in a CONFOTUR-approved project like Riviera Bay become very clear when viewed side-by-side with the standard tax regime. The exemptions on the two main property taxes create a more favorable financial structure for owners. The following table breaks down the differences for key tax events.

Common questions

How does CONFOTUR relate to taxes on rental income?

What is documented is narrower than a yes or a no. The CONFOTUR exemptions are recorded against property-related taxes — the 3% transfer tax and the 1% annual IPI. Income generated from renting your property is assessed separately, and that assessment includes a 27% withholding for non-residents. Nothing we can cite rules on how the two interact for a particular unit, so ask your attorney rather than assuming an answer.

Who is responsible for filing for my tax exemptions?

Your independent Dominican attorney is responsible for this process. As part of their services during the purchase, they will handle all the necessary filings with the Dominican tax authorities (DGII) to ensure your exemptions are properly registered on your property's title.

Are these tax benefits guaranteed for 15 years?

The CONFOTUR law provides an IPI exemption for qualifying projects for a term of up to 15 years from completion. While this is the term granted to the project, how it applies to an individual owner and their specific unit should be confirmed by a legal professional. Your attorney will clarify the exact terms and duration of the exemption as it pertains to your purchase at Riviera Bay.