Dominican Republic – Property Letting

How does the property letting process work in Dominican Republic?

Law 85-25 on Real Estate Rentals and Evictions came into force on 14 August 2025, ushering in a new era after more than seven decades of outdated rental rules. Anyone planning to let property in the Dominican Republic — whether living in the country or managing things from overseas — needs to understand how this updated framework operates.

Among the most consequential changes introduced by the new legislation is the requirement that all rental arrangements be set out in a formal written agreement. In previous years, it was commonplace for landlords and tenants to rely on verbal understandings, which frequently gave rise to disagreements and legal complications. Under the current rules, landlords must provide a detailed written contract covering the length of the tenancy, the rent payable, and each party’s obligations with regard to upkeep. In contrast to some common-law jurisdictions where spoken agreements can still carry enforceability, the Dominican Republic now firmly prioritises the written form.

Landlords typically find tenants through letting agents, online property portals such as Encuentra24 or SuperCasas, personal networks, or international listing platforms. Vetting prospective tenants is handled informally — the country lacks a standardised national credit-referencing system comparable to those operating in countries such as France or Germany — so landlords generally request income documentation, employment references, and identification independently.

The law does not impose a standard lease length or restrict what duration parties may agree upon. One-year terms are the norm for residential lets, though shorter or longer arrangements can be freely negotiated. Where neither party signals an intention to end the lease when it expires, the agreement rolls over automatically on the same terms. To avoid any ambiguity, landlords are well advised to include unambiguous renewal and termination clauses in every contract.

A well-drafted Dominican tenancy agreement should address: the rent amount, payment method, and payment location; the permitted use of the premises; the allocation of responsibility between minor and major repairs; any prohibition on subletting; the grounds and conditions for deducting from the deposit; and any rent escalation provisions. Contracts may also incorporate default provisions and, where they do not touch on matters of public order, may waive certain tenant protections that the law would otherwise imply.

What types of rental arrangements are available — long-term, short-term, and holiday lets?

The Dominican Republic supports an active market for both long-term residential lettings and shorter-term or holiday rentals. Destinations such as Punta Cana and Las Terrenas draw tourists and seasonal visitors who prefer renting to purchasing property, sustaining a dynamic letting environment. It is important to identify which model suits your property, not least because the tax treatment of each differs materially.

Short-term rentals in the Airbnb style are lawful and widely practised throughout the country. The government has been moving towards more structured regulation in this space, and rules set by individual condominium buildings may also restrict or prohibit short-term letting. Unlike certain European cities that impose strict annual night limits on short-term lets, the Dominican Republic currently places no national cap on the number of days per year a property may be rented out on a short-term basis.

A range of booking platforms operates in the market — including VRBO and Booking.com — though Airbnb remains the most widely used in the Dominican Republic. Owners who list across several platforms at once must keep their availability calendars synchronised to prevent double bookings and the resulting penalties from platforms.

The tax distinction between rental types is significant. Short-term accommodation is subject to ITBIS — the Dominican equivalent of value added tax — and Dominican law does not draw a line based on the length of the stay. This means that, as a general rule, anyone providing short-term rental services must add ITBIS to their invoices. Long-term residential rentals, by contrast, fall within the categories exempt from ITBIS.

There is no turnover threshold below which short-term rental providers escape the ITBIS registration requirement. From the moment you begin offering short-term accommodation in the Dominican Republic, you are expected to register for ITBIS with the DGII. This obligation applies equally to Dominican nationals and to foreign hosts. All rental income, irrespective of the letting model used, must be declared to the DGII.

What rental income can landlords expect, and how are rates set?

Landlord and tenant are free to agree whatever rent they consider appropriate, provided that the amount, the place of payment, and the method of payment are clearly recorded in the contract. The government does not prescribe any mandatory rent level, and market forces largely dictate pricing — especially in areas dominated by international tourism, where overseas demand can push rents considerably higher than the national average.

Where the parties have not agreed otherwise, residential rent increases are capped at 10% per year. This ceiling strikes a balance between the interests of tenants facing economic pressures and those of landlords seeking a return that keeps pace with market conditions. Law 85-25 enshrines this limit as of 2025; landlords should seek up-to-date guidance from the DGII or a local lawyer, as implementing regulations may supplement or modify the primary legislation over time.

Monthly payment is the most common arrangement, though the parties may freely agree on a different schedule. Many leases also provide for periodic rent reviews. Any escalation clause included in a contract should be anchored to the Central Bank’s inflation index to remain consistent with the law’s intent.

As of early 2026, realistic net rental yields after costs for residential properties in the Dominican Republic sit in the range of approximately 4.5% to 6.5% for long-term lets, and between roughly 4% and 7% for short-term rentals, depending on occupancy rates and the efficiency of management. Yields differ considerably by location, property type, and the quality of the management in place. Landlords should examine comparable listings on local portals and speak with a local agent to establish realistic expectations for their particular property and area before setting a rental price.

Do landlords need to provide a furnished or unfurnished property?

No legal rule in the Dominican Republic obliges landlords to furnish a property for long-term residential tenancies. The choice is driven by commercial considerations and the type of tenant the landlord is targeting. Unfurnished properties are standard in long-term residential lets aimed at local tenants, whereas fully equipped furnished accommodation is the norm in the short-term and holiday rental market.

For shorter-term and holiday rentals marketed to tourists or international guests — whether through Airbnb, VRBO, or direct booking channels — a fully furnished and well-equipped property is effectively what guests expect. This means providing furniture, household appliances, kitchen equipment, bed linen, and a reliable internet connection as a minimum. Properties that meet these expectations competitively tend to command higher nightly rates and sustain stronger occupancy levels.

The new legislation makes clear that landlords are responsible for delivering the property in a proper and liveable state, keeping it in good structural repair, and ensuring access to essential services. Landlords must also address maintenance problems without undue delay. Although furnishing standards are not separately categorised in law, the habitability obligation applies to all rented properties regardless of whether they are furnished or unfurnished.

The level of furnishing does not in itself change a property’s tax classification, but short-term furnished lets carry ITBIS obligations that long-term unfurnished residential lets do not. Any landlord considering converting a property to a furnished short-term rental should account for the additional tax compliance burden described in the tax section of this guide.

Do you need a licence or registration to let a property?

No nationwide permit or licence is currently required specifically to operate a short-term rental in the Dominican Republic. You are still required, however, to register your rental income with the DGII and to comply with any requirements imposed at the municipal level or by your building’s management. This position applies to both resident and non-resident foreign landlords.

For long-term residential lettings, there is equally no formal landlord licence at the national level. That said, all landlords — wherever they are based — must register with the DGII and obtain a taxpayer identification number (an RNC for companies, or a Cédula or passport reference for individuals) in order to declare rental income. Every taxpayer is required to register with the tax authority and obtain such a number.

Under Law 85-25, the tenancy contract and the security deposit must both be registered to ensure traceability and legal certainty. The obligation to place the security deposit at a designated bank within a prescribed period effectively constitutes a form of transaction-level registration that must be completed for every new tenancy entered into.

Where a property forms part of a condominium complex or gated development, the homeowners association may have its own rules about short-term letting, ranging from restrictions to outright prohibitions. The most common consequences of non-compliance in the Dominican Republic are not nationally imposed fines but rather difficulties arising from undeclared rental income — which attracts DGII penalties — or breaches of condominium bylaws. Always review your building’s rules before advertising a property for short-term rental.

For properties within tourism-designated developments that benefit from CONFOTUR status, specific conditions governing how the property may be operated may apply. Landlords in such developments should clarify the terms of their CONFOTUR approval directly with the relevant ministry and their legal adviser.

How do you obtain a landlord licence or register as a landlord?

Since no formal national landlord licence exists in the Dominican Republic, the key steps centre on achieving tax compliance and meeting the tenancy deposit obligation introduced by Law 85-25. The following outlines the standard process for a foreign landlord letting property in the country:

1. Obtain a taxpayer identification number: Register with the DGII (Dirección General de Impuestos Internos). Non-residents typically use their passport details for this purpose. The process can be initiated through the DGII’s online virtual office at dgii.gov.do. A local accountant or property manager can guide you through this step.
2. Prepare a written lease agreement: The contract must set out the terms of the tenancy, including its duration, the rent payable, and each party’s maintenance responsibilities. Engage a Dominican lawyer to draft or review the agreement to ensure it meets the requirements of Law 85-25.
3. Collect the security deposit: For residential properties, you may request no more than two months’ rent as a security deposit. This should be collected from the tenant at the point of signing the contract.
4. Lodge the security sum at the designated bank: Landlords must deposit any sum received from tenants — whether described as a deposit, advance payment, or guarantee — into the Banco Agrícola within 15 days of signing the contract, together with a copy of the lease. The deposit may alternatively be placed with Banreservas, where it will earn interest credited to the tenant.
5. Register for ITBIS (if letting short-term): From the point at which you begin offering short-term accommodation in the Dominican Republic, you must register for ITBIS. This applies to both Dominican and foreign hosts. Registration is completed via the DGII virtual office.
6. File annual tax returns: Rental income must be declared to the DGII each year. Individual taxpayers use the IR-1 form (Declaración Jurada Anual del Impuesto Sobre la Renta de Personas Físicas). Non-residents whose tax is withheld at source by a local manager may not be required to file separately, but should seek confirmation from a local tax adviser.
7. Check municipal and HOA requirements: Contact your local municipality and, if applicable, your building’s homeowners association to confirm whether any registration or approval at the local level is required for your property and intended rental model.

The DGII does not charge a direct fee for registration, but you should set aside a budget for legal and accounting support. Procedural requirements and any applicable charges may change; verify current details directly with the DGII or a local adviser before proceeding.

What are the rules around deposits?

Law 85-25 limits the security deposit for residential properties to a maximum of two months’ rent. For commercial properties, the amount is left to negotiation between the parties. This cap represents a meaningful reform: a common practice under the previous regime saw landlords demand three security deposits from incoming tenants, with the third often treated as non-refundable.

Rather than a government-approved third-party protection scheme of the kind seen in the United Kingdom or Ireland, the Dominican Republic uses a dedicated banking mechanism. Landlords are required to place any sum received from tenants at the Banco Agrícola within 15 days of the contract being signed, accompanied by a copy of the lease. Failure to comply within this window results in a 10% penalty per month of delay, up to a ceiling of 50% of the original deposit amount, with the penalty benefiting the tenant.

Deposits held at the Banco Agrícola generate interest comparable to a savings account, and that interest belongs to the tenant. This means the deposit cannot simply sit in the landlord’s personal bank account as might be the practice in other markets.

Should a tenant fall into arrears or breach the lease, the landlord may apply to the Banco Agrícola for release of the funds. The bank will notify the tenant, who has ten days to raise a challenge before the deposit is released. When the tenancy ends, the landlord is required to return the deposit once the property has been handed back, provided the landlord has complied with the obligation to lodge the funds at the bank along with the required documentation.

In any legal proceedings relating to a rental dispute, both landlord and tenant must produce evidence that the deposit has been lodged with the Banco Agrícola. Courts will not proceed with cases where this proof is absent. Compliance is therefore not merely advisable — it is a precondition for accessing the courts at all.

Who is responsible for maintenance and repairs?

The law allocates day-to-day minor repairs to tenants and significant structural repairs to landlords, though the parties may modify this allocation by agreement in the contract. This division is broadly consistent with the approach taken in many civil-law countries in continental Europe, where landlords are expected to keep the property structurally sound while tenants handle routine upkeep.

Landlords are obliged to hand over the property in a habitable and fit-for-purpose condition, carry out any necessary structural work, and ensure that tenants can access basic services. Falling short of the habitability standard can expose a landlord to legal sanctions under Law 85-25. The requirement to provide access to water and electricity is particularly relevant in the Dominican Republic, where some properties depend on generator backup or private water supply arrangements.

Tenants are expected to look after the property during the tenancy, carry out minor repairs, respect the agreed use of the premises, refrain from making alterations without permission, and return the property in good condition at the end of the lease. Landlords should record the condition of the property thoroughly at the beginning and end of each tenancy, using a detailed inventory and time-stamped photographs, to support any claim for deposit deductions.

Expenses such as electricity, water, cable television, and telecommunications are borne exclusively by the tenant. In properties with shared areas, the costs of maintaining common parts are typically covered by tenants through a maintenance fee paid monthly to the building administrator or, where agreed, folded into the rent paid to the landlord.

Law 85-25 establishes structured mechanisms for resolving disputes, giving both parties access to mediation or arbitration as a first resort. Where those avenues fail, matters may be brought before a specialised Justice of the Peace Court established specifically for rental and eviction cases. This court handles disputes involving non-payment, contract termination, contractual breaches, and deposit-related disagreements.

How are letting agents used, and what do they charge?

Letting agents and property management firms occupy a significant place in the Dominican Republic’s rental market, and are especially valuable for foreign landlords who are not physically present in the country. A property manager typically takes responsibility for finding and screening tenants, preparing and administering contracts, collecting rent, coordinating maintenance, and — in the case of short-term rentals — handling guest communications, organising cleaning, and managing listings across booking platforms.

Law 85-25 establishes that brokerage commission is payable by whichever party engaged the agent, and that legal costs associated with the rental or lease transaction are shared equally between the owner and the tenant. This marks a departure from previous practice, in which tenants frequently bore a disproportionately large share of these fees. Unlike the United Kingdom, where legislation prohibits landlords from charging fees to tenants, the Dominican Republic permits landlords and agents to agree commercial arrangements freely — but the principle that the party who commissions the agent pays the commission now governs the market.

For long-term residential rentals, agents typically charge the landlord a finder’s fee equivalent to one month’s rent when a tenancy is successfully established. For short-term and vacation rental management, fees are charged as a proportion of gross rental income. As of 2025, management fees in popular tourist destinations such as Punta Cana generally range between 20% and 35% of gross revenue, varying with the scope of services provided. These figures are not regulated at a fixed level, and arrangements differ between companies; always request a detailed written fee schedule before entering into a management agreement.

After all operating costs are accounted for, professionally managed short-term rentals typically return net income of around 50% to 65% of gross revenue to the landlord. Seek itemised cost breakdowns and current market comparisons from prospective management companies, as charges evolve over time. The DGII plays no role in regulating agent fees, so shopping around before committing is advisable.

What taxes apply to rental income?

Dominican tax law is primarily territorial in character, meaning that it generally applies only to income that originates within the Dominican Republic. All income derived from work or business activities carried out in the country is taxable, regardless of whether the person or entity involved is Dominican, a resident, or a foreign non-resident. Rental income from a property situated in the Dominican Republic is therefore taxable for all owners, including those who live abroad.

For resident landlords (individuals): Rental payments made to individuals (as distinct from companies) are subject to a 10% withholding tax applied at source. This means that the tenant, or the entity responsible for processing the payment, deducts the tax before remitting the rent to the landlord. An individual is considered a resident for tax purposes if they have spent more than 182 days in the Dominican Republic within any continuous 12-month period.

For non-resident landlords: Rental income attributable to a non-resident owner is subject to a 27% withholding tax. Although this rate may appear substantial, the collection mechanism is designed to be straightforward: there is no requirement to file complex returns with the DGII from abroad. Instead, the local property management company handles the entire process — collecting rent from guests, deducting management fees and operating expenses, withholding the 27% tax, and paying it directly to the tax authority on the landlord’s behalf.

For corporate landlords: Rental income earned by a legal entity is subject to a flat 27% income tax rate, which applies to all business entities.

ITBIS (VAT) on short-term lets: ITBIS at a rate of 18% applies to short-term rentals, though enforcement across the market varies in practice. Long-term residential rentals are exempt from ITBIS. Landlords operating in the short-term rental space must register for ITBIS with the DGII and submit monthly ITBIS returns.

Annual property tax (IPI): An annual real estate tax of 1% is levied on properties held by individuals and trusts, calculated on the aggregate value of all properties owned by a given individual as assessed by the tax authorities. For 2024, an exemption applies to the first RD$9,860,649 (approximately US$177,000) of assessed value, with the 1% charge applying only to the value above that threshold. This exemption is available only where the property is held in an individual’s name. If ownership is through a company, the 1% IPI is charged on the full value without any exemption.

Tax rates and thresholds are subject to revision. Always consult the DGII and a qualified local tax adviser for up-to-date obligations, particularly given the additional complexities that arise for non-resident property owners.

What are the rules around ending a tenancy or evicting a tenant?

A tenancy may be brought to an end when it expires, when the property is being used in an unauthorised way, when the property has been destroyed, or when one party has committed a serious breach of the contract. Where neither party communicates an intention to end the lease as it approaches its expiry date, the tenancy automatically continues on the same terms. Landlords who wish to recover possession when a fixed term ends should therefore serve written notice of non-renewal before the expiry date.

A landlord may terminate a residential tenancy and require the tenant to vacate in any of the following circumstances: the tenant has failed to pay rent when due; the property is being used for a purpose other than that agreed; the tenant has sublet the whole or part of the premises in contravention of the agreement; the tenant has made alterations to the property without permission; the property requires significant repair, renovation, or new construction works; or the landlord, their spouse, or a close relative intends to occupy the property.

A landlord cannot carry out an eviction without going through the judicial process, regardless of what the contract may say. Taking matters into one’s own hands — by changing locks, removing the tenant’s belongings, or disconnecting utilities without a court order — is not permissible under Dominican law. The eviction procedure established by Law 85-25 begins with a compulsory conciliation stage before a judicial officer. If the parties cannot reach agreement, the matter proceeds before the specialised Justice of the Peace Court created for rental and eviction disputes.

Tenants retain the right to challenge any eviction attempt in court, giving them a formal avenue to contest actions they consider unjustified. The overall framework offers meaningful tenant protections, but Law 85-25 was designed with the express aim of making the process faster than under the previous legislation: part of the impetus for reform was the recognition that prolonged judicial delays in resolving tenancy disputes were discouraging landlords from investing in the rental market.

No single statutory notice period applies across all situations; the appropriate period depends on the terms of the lease and the grounds relied upon for termination. Landlords should incorporate clear, enforceable notice provisions in their contracts and should always seek legal advice before commencing eviction proceedings.

What should expat landlords know about managing property remotely?

Running a Dominican Republic rental from overseas is a common situation, given the strength of the tourism-driven short-term letting market and the large number of foreign investors in areas such as Punta Cana and Las Terrenas. With the right structures in place, it is entirely workable — but it demands careful legal and financial preparation from the outset.

Power of attorney: Foreign landlords who cannot attend in person for contract signings, deposit registrations at the Banco Agrícola, or any court proceedings should designate a trusted local representative through a notarised power of attorney (poder notarial). This document authorises the representative to execute lease agreements, lodge deposits at the bank, and handle DGII filings on the landlord’s behalf. A Dominican notary or lawyer can prepare the instrument.

Property management: A local property management company typically takes care of collecting rental payments from guests, deducting its fees and other operating costs, withholding the applicable tax, and remitting it directly to the tax authority — ensuring that the landlord remains fully compliant without having to manage the administrative burden from abroad. It is important to select a management company with verifiable experience and a transparent, itemised fee structure.

Tax withholding obligations: As a non-resident, your rental income is subject to a 27% withholding tax under the short-term rental regulations. A 10% withholding is treated as an advance payment that is credited against your overall income tax liability. Confirm your exact obligations with a DGII-registered accountant, since the interaction between withholding rates and final tax liability can be nuanced.

Repatriating rental income: The Dominican Republic does not maintain general capital controls that would prevent landlords from transferring rental income abroad. However, international transfers may be subject to scrutiny by local banks, and non-resident landlords should keep thorough records of all rental income received and taxes paid in order to facilitate smooth bank transfers and demonstrate compliance to financial institutions.

Additional compliance considerations: Non-resident landlords must make certain that their property manager understands and complies with all ITBIS filing requirements for short-term lets, the bank deposit obligation for security deposits, and any restrictions on letting imposed by the relevant homeowners association. Engaging both a local lawyer and a local accountant is strongly recommended for non-residents to avoid inadvertent compliance failures.

Frequently asked questions: letting property in Dominican Republic

Can a non-resident own and let property in Dominican Republic?

Yes. Foreign nationals and non-residents hold the same property ownership rights as Dominican citizens and may let their properties freely. Dominican tax law applies to all income from Dominican sources, irrespective of whether the owner lives in the country or abroad. Non-residents must register with the DGII and are subject to a 27% withholding tax on rental income (as of 2025).

Do I need a local agent or property manager to let my property in Dominican Republic?

There is no legal obligation to use a local agent or property manager for long-term residential lets. However, for non-residents and for short-term holiday lets in particular, engaging a local manager is strongly recommended. A local property management company collects rental payments, deducts its fees and other costs, and withholds and remits the applicable tax to the government on your behalf, greatly simplifying tax compliance for landlords who are based overseas.

What is the maximum security deposit a landlord can charge in Dominican Republic?

For residential properties, Law 85-25 caps the security deposit at two months’ rent. This limit has been in place since August 2025. The deposit must be held at the Banco Agrícola or Banreservas rather than in the landlord’s own account. Check the DGII and the official Gazette for any changes to the implementing regulations.

Is rental income from my Dominican Republic property taxed if I live abroad?

Yes. Rental income earned by a non-resident owner is subject to a 27% withholding tax (as of 2025). This withholding is generally treated as a final tax, meaning non-resident individuals are not ordinarily required to file an additional income tax return. Bear in mind that you may also face tax obligations in your country of residence — seek advice from a tax professional in both jurisdictions.

Are there rent controls or limits on rent increases in Dominican Republic?

Under Law 85-25, where the contract does not provide otherwise, annual rent increases for residential properties are limited to 10% (as of 2025). No government-prescribed rent level applies at the start of a tenancy — the initial rent is freely agreed — but increases during the tenancy are capped. Consult a local lawyer regarding current implementing regulations, as the law was recently enacted and further guidance may follow.

Do I need to pay VAT (ITBIS) on my Dominican Republic rental income?

Long-term residential rentals are exempt from ITBIS. Short-term accommodation, however, is subject to ITBIS, and Dominican law makes no distinction based on the length of the stay. The ITBIS rate stands at 18% (as of 2025). Landlords providing short-term lets must register for ITBIS with the DGII from the outset, as there is no turnover threshold below which registration can be deferred.

How long does it take to evict a non-paying tenant in Dominican Republic?

Law 85-25 requires a mandatory conciliation stage before a judicial officer before eviction proceedings can advance. If conciliation fails, the matter is heard by the specialised Justice of the Peace Court for rental and eviction disputes. The reform was partly intended to reduce the lengthy delays that characterised proceedings under the previous legislation. In practice, a straightforward non-payment eviction may now be concluded within a matter of months, though outcomes vary case by case. Speak to a local lawyer for realistic current timeframes.

What is the CONFOTUR tax benefit and does it affect how I let my property?

The CONFOTUR law is an important financial incentive for real estate investors in the Dominican Republic. Purchasing within a certified tourism development entitles the buyer to a 15-year exemption from the 3% property transfer tax and the 1% annual IPI, which can materially improve net rental returns. Properties benefiting from CONFOTUR status are generally intended for tourism-related use, so short-term letting is typically compatible with the scheme. Always verify the specific terms of your property’s CONFOTUR approval with the Ministry of Tourism and your legal adviser before making any letting decisions.