Property tax in the Dominican Republic is known as “Impuesto Sobre Bienes Inmuebles” (ISBI) and is based on the value of the property. The tax rate varies depending on the municipality, but the average rate is around 1% of the property value.Property tax is paid annually and the property owner is responsible for paying the tax.
Capital Gains Tax
- Capital gains tax (CGT) in the Dominican Republic is known as “Impuesto Sobre la Renta” (ISR) and is levied on the sale of real estate. The tax rate is 20%.
- CGT is calculated on the difference between the purchase price and the sale price of the property.
Inheritance Tax
- Inheritance tax in the Dominican Republic is known as “Impuesto Sobre Sucesiones y Donaciones” (ISSD) and is levied on the transfer of property from one person to another upon death.
- The tax rate varies depending on the relationship between the deceased and the inheritor, with a maximum rate of 25%.
- Spouses and children are generally taxed at a lower rate, while more distant relatives and non-relatives are taxed at a higher rate.
Gift Tax
- Gift tax in the Dominican Republic is known as “Impuesto Sobre Sucesiones y Donaciones” (ISSD) and is levied on the transfer of property from one person to another while the giver is still alive.
- The tax rate is 20%.
Tax on Property Income
- Income from renting out a property in the Dominican Republic is subject to income tax, which ranges from 20% to 27% depending on the amount earned.
- Landlords are also responsible for paying a “Impuesto Sobre la Renta” (ISR) which is an income tax for property income.
Tax Advantages
- There are no specific tax advantages for buying a house in the Dominican Republic. However, the tax-free allowance for CGT and the tax-free allowance for property income may reduce the overall tax burden for some individuals.
- It is advisable to check with a tax advisor to ensure that you are aware of all the tax implications of buying or selling a property in the Dominican Republic.
It is worth noting that the tax rates and laws are subject to change, so it is always best to check with a tax advisor or a local real estate agent for the most up-to-date information.