This annual tax is applied to the total amount of the real estate value registered by natural persons or trusts. It is locally known as “IPI”.
As mentioned earlier all the properties (all homes and urban lots) owned by individuals which values are registered below US$150,000 (approximately), are exempted from annual property taxes.
Individuals: a rate of 1% is applied on the surplus value of RD$7,438,197 (or US$147,387 as of June 2019) of the property. Meaning that a property worth US$200,000 will be taxed on 52,613 at 1%, so US$526 annually.
Trusts: 1% on the value of the real estate property. There are no exceptions.
PS: This tax is paid in two half-yearly installments, with the deadline for payment of the first installment on March 11 and the second on September 11 of each year. You should also know that the number of tax assets that are paid by the company can apply as a credit to its revenues.
They are exempt from the payment of this tax:
- The building (and the land on which it is built) belongs to people over 65 years of age, provided that this is the only property of its owner in the Dominican Republic.
- Pensioners and rentiers from a foreign source (50%).
- Rural land.
- Properties of agricultural use are located on rural land.
- All properties that can fall under the IPI tax, which total value is equal to or less than (RD$7,438,197 / US$147,387).
Properties held in the name of an individual are subject to an annual property tax ("IPI") of 1% of government-appraised value in excess of RD$7,138,000 pesos (142,000 US) except for unbuilt lots or farms outside city limits and properties whose owner is 65 years old or older, who has registered it in his or her name for more than 15 years and has no other property.
If the property is held by a corporation, no property tax is due. Instead, the corporation must pay a 1% tax on corporate assets. However, any income tax paid by the corporation will constitute a credit toward the tax on assets, so that if corporate income taxes paid are equal to or higher than the taxes on assets due, the corporation will have no obligation to pay taxes on its assets