Property Sales Taxes in the Dominican Republic

The fiscal appeal of the Dominican Republic for the European investor

The Dominican Republic is no longer just a sun-and-beach destination; it has become a tourism giant that broke records with 11.6 million visitors in 2025. For the European investor — especially one seeking that second residence under the slow living philosophy by the sea in Bávaro — this boom is an opportunity that is hard to ignore. But be careful. Before the capital gain shows up in your bank account, you need to understand the rules of the game. Gaining an in-depth knowledge of property sales taxes is the only way to ensure the transaction is transparent and to avoid leaving money on the table in the Caribbean.

Unlike other saturated markets where bureaucracy suffocates, the tax system here offers a certain clarity and real advantages for foreign capital. Even so, it is vital to know where the buyer’s obligation ends and the seller’s begins. Confusing them can bring unpleasant surprises just when you are about to close the deal in developments such as Salado Golf & Beach.

Tax on the Transfer of Real Estate (ITBI): A burden for the buyer

When breaking down property sales taxes, the same question always arises among non-resident owners: who pays what? In the Dominican Republic, the main levy is the Tax on the Transfer of Real Estate (ITBI). A general rate of 3% applies to the assessed value of the property or the transaction price, whichever is higher.

Key fact for the seller: Legally, the ITBI is the buyer’s obligation. If you are the owner selling your flat in Punta Cana, do not deduct this amount from your net profit. The cost of the deeds and this tax fall on whoever acquires the property.

This is good news for the seller. The agreed price remains intact. Let’s take a case: if you sell your exclusive beachfront apartment in Salado Golf & Beach for 300,000 dollars, that is the gross amount you will receive. You will not have to pay the 3% ITBI out of your own pocket.

Capital Gains Tax: The seller’s obligation

This is where you need to pay attention. Although the ITBI is the buyer’s affair, the sale does generate a direct tax obligation for whoever disposes of the property: the Capital Gains Tax or, as it is commonly known, the tax on the Plusvalía. Basically, it applies to the difference between what the property cost and what it sells for.

How is the taxable base calculated?

The Dirección General de Impuestos Internos (DGII) sets the rules. The taxable gain is determined by subtracting the acquisition cost (adjusted for inflation) from the sale price. And here there is an important nuance: unlike countries with fixed rates, in the Dominican Republic the variable is decisive:

Ordinary capital gains: Taxed at a rate of 27%.
Qualified capital gains: Taxed at a reduced rate of 10%.

Accessing the 10% rate

For those who invest in residential properties, most sales of second homes in tourist areas such as Bávaro may qualify for the 10% rate. What’s the trick? Certain requirements must be met, such as a specific holding period and that it is not a habitual business activity of building and selling.

Let’s look at a practical example:

Imagine you bought a new-build apartment in Salado Golf & Beach three years ago for 250,000 dollars. Today, thanks to the tourism boom and the high demand for accommodation near the White Sands Golf Course, you decide to sell it for 320,000 dollars.

Selling price: $320,000
Purchase price: $250,000
Gross profit: $70,000

If your property qualifies for the reduced rate (generally applicable to properties that do not exceed certain limits and are used as a home or rental), the tax to be paid would be:
$70,000 x 10% = $7,000 USD.

If it does not qualify, the rate rises to 27%. The tax bill then approaches $19,000 dollars. That is why getting proper advice is not optional; it is vital for applying the available exemptions and low rates.

Permitted deductions and expenses

To determine the real net profit, it is not enough to subtract the purchase price from the selling price. The law allows you to deduct certain expenses inherent to the acquisition and improvement of the property, which significantly lowers the taxable base for property sale taxes.

You can deduct:

Cost of the original purchase: Yes, including the ITBI you paid when you bought (at that time you were the buyer).
Legalisation and notarial expenses: The lawyer and notary fees from that transaction.
Capitalisable improvements: If you carried out serious renovations (installing a high-end kitchen or changing the interior layout), those costs are added to the original purchase value.

Pro Tip: Keep all the invoices, transfers and service contracts related to the improvement and maintenance of your property. In an audit, those papers are your best defence for paying less and proving the real value invested.

Exemptions and reinvestment in property

There are specific situations where the law works in the seller’s favour by exempting them from payment. One of the most interesting for those who want to scale up their portfolio is the reinvestment exemption.

If the entire proceeds from the sale are used to acquire one or more new properties within one year, no capital gains tax is paid. It is a powerful tool. If you sell your property in Punta Cana and use that capital to buy a more luxurious villa or several units in a new development, the Dominican tax authority will not tax that capital gain. It encourages capital mobility.

The payment process before the DGII

The procedure is digital and must be completed before signing the new public deed before the notary. These are the usual steps:

Valuation: Although the price is freely agreed, the DGII has a reference value. If the sale price is much lower than the reference value, the administration could make a rectification.
Sworn Declaration: The Income Tax form (IR-2 or equivalent) is submitted declaring the gain.
Payment: The calculated tax is paid.
Certificate: The “Non-Debtor” certificate or proof of payment is obtained. Without this, the notary cannot authorise the transfer of title.

Frequently asked question: Do I also have to pay taxes in Spain or Europe for selling in the DR?

Answer: It depends on the legislation of your country of tax residence. Many countries have double taxation treaties with the Dominican Republic. Generally, even if you pay in the DR, you will have to declare the sale in your country of origin, but you will often be able to deduct the tax paid in the Caribbean. Always consult an international tax adviser.

Why sell now in Bávaro?

Understanding property sales taxes is only one part of the equation. The market context is the other. With a return ranging between 8% and 12% per year on holiday rentals and sustained growth in asset values, the time to liquidate an investment or restructure your assets is now.

High-end projects such as Salado Golf & Beach offer a highly sought-after product on the international market. Located in White Sands, Bávaro, these new-build apartments with golf course views and direct beach access are a liquid and valuable asset. Demand for properties with premium amenities (spa, security, rental management) exceeds supply. That ensures competitive prices and a quick exit of capital if the investor so decides.

Conclusion

Selling a property in paradise does not have to be a headache or a financial hole if you plan ahead. The Dominican Republic offers a fiscal framework that, whilst strict in its procedures, allows the foreign investor to obtain significant benefits. Competitive capital gains rates (only 10% in many cases) and reinvestment exemptions are major advantages.

For owners at Salado Golf & Beach, Punta Cana’s tourism boom and the residential complex’s infrastructure ensure that, upon selling, the value of their asset will have grown. Keep your documentation impeccably organised and rely on the support of local professionals and the Residencial Group team to navigate the process. This way, your investment experience in the Caribbean will be as pleasant as the slow living lifestyle you enjoyed by the sea.