This law passed in October 2001 is born from a search by the Dominican Government for incentivizing real estate investments and large infrastructure projects related to tourism, more specifically in the defined touristic poles of the island (red zone in the map).
The law is also known as "Ley Confotur". In-text, it seeks to populate the least served tourist areas of the Dominican Republic and to promote the protection of the environment in these areas.
In reality, the Confotur Law offers financial exemptions for developers such as large hotels, medium-big real estate developers, and investors looking to build residential and/or touristic projects.
The project must meet a strict series of criteria listed in the Law and reviewed by a specific governmental organization.
If it does meet these criteria, the developers are entitled to numerous exemptions under article 4 of the law which we will not detail here. In reality, these benefits can be translated into a more competitive offering, of better quality. And in case the developers want to reap all the financial benefits for themselves, the projects benefiting from the Confotur Law also give the end buyers access to a series of tax exemptions.
The benefits extend to individual real estate end customers. Thus, local and foreign property buyers can enjoy the benefits of that law for the approved projects. An individual buying unit in properties and developments under Confotur will be exempt from:
- The 3% Property Transfer Tax mentioned earlier, for transferring the Title of Certificate to a buyer's name at Internal Revenue (DGII).
This elimination of 3% of the value of the property purchased from the DGII by way of transfer of the property title certificate to the new name can represent important savings.
- The Annual Property Tax represents 1% of the exceeding value of RD$ 7,438,197 or about US$150,000 of the property. This means that a property worths US$200,000 will be taxed on its surplus amount of US$50,000 at 1%, so in this case, US$500 annually.
- The tax in case of a capital increase, sale (for example in case of resale of the property), and contributions in kind.- The tax on declared rental revenues, which represents 27% in the Dominican Republic.
As of 2021, the Ministry of Tourism has expanded the law to allow foreign nationals who purchase property with a Confotur certification to benefit from the tax exemptions and benefits. Plus, foreign nationals with this certification will automatically qualify for a residency visa and residency under any category.
On top of that, the Confotur certification will qualify you for the visa and residency no matter the property price.
To qualify for the investment residency program, you would have to invest a minimum of US$200,000 in real estate. In other words, you could get all the benefits of investment residency through the Confotur certification at a significantly lower cost.
Note: It is useful to know that the period of exemption is usually 15 years from the moment the project was granted Confotur, not from when it was actually completed. Also, if you purchase your unit through the creation of a company such as an S.R.L. (L.L.C.) when you will sell your company (owner of the unit), the «remaining benefits» of these exemptions will be transferred to the new buyer.
You can discover our real estate projects with Confotur for sale in Las Terrenas on our website.