Legal and Tax Considerations for Buying in the Dominican Republic

The Dominican Republic passed a significant piece of property tax legislation in 2026, and a meaningful number of sources online have not yet caught up with it, making this one of the more important updates in this entire series to get right.

The Torrens title system

Property ownership in the Dominican Republic runs on a Torrens-style registration system under Law 108-05, administered by a specialised Real Estate Jurisdiction with exclusive authority over property matters. Once a title is properly registered, the state guarantees it, and the certificate of title is described in law as imprescriptible, meaning it cannot be lost through the passage of time or a third party's competing claim once registration is complete. Before any registered title existed, the state was the original owner of unclaimed land, and a public-order process called saneamiento first identifies, individualises and adjudicates rights over previously unregistered parcels. For a buyer, the practical takeaway is that due diligence centres on the certificate of title and a certification of legal status from the Title Registry, which reveals any recorded liens, easements or provisional annotations, and no purchase should proceed without it.

The 2026 tax changes

Law 30-26, enacted in June 2026, made two significant changes to the tax treatment of Dominican real estate. First, it cut the capital gains tax rate on real estate sales for individuals from 25% to a flat 10%, applying to both Dominican tax residents and non-residents where the gain is taxable in the country. Second, it phases out a separate 2% tax on real estate transactions under the mortgage registration law, cutting it to 1% in 2027 and eliminating it in 2028. This is distinct from the 3% real estate transfer tax, which the law leaves unchanged.

This is a major shift, and it is worth flagging that not every source online reflects it yet. At least one guide published as recently as July 2026 still quotes a capital gains rate of 27% for non-resident sellers, which appears to be based on the pre-reform position. Anyone researching Dominican property tax from multiple sources should specifically check the publication date against June 2026, since anything written before the reform, however professionally presented, is now describing a rate that no longer applies.

Standard transaction costs

Separately from the capital gains change, the standard transfer tax on a property purchase runs around 3% of the appraised value, generally lower than market value, paid once at the time of purchase. Annual property tax (IPI) applies at 1% on the assessed value above a threshold covered in more detail elsewhere in this series, in two instalments each year, typically due in March and September. Legal fees for the buyer's attorney conducting title due diligence and managing the transaction commonly run 1% to 1.5% of the purchase price.

CONFOTUR incentives, with one detail worth double-checking

Properties approved under the CONFOTUR tourism development law (Law 158-01), which covers much of the Punta Cana, Cap Cana and Bávaro area, can carry exemption from the transfer tax on initial purchase, exemption from capital gains tax on the first sale, and a multi-year exemption from the annual property tax. That property tax exemption runs for 15 years, according to Dominican legal sources, though some guides cite 20. Given that CONFOTUR benefits are granted per project through a specific government resolution rather than as a single blanket rule, the safest approach is to ask for the actual CONFOTUR approval document for any specific property being considered, rather than accept either figure as a general rule that applies uniformly across every CONFOTUR-approved development.

What this means for a buyer

The Dominican Republic's title system is one of the more secure in the Caribbean once a purchase is properly registered, and the 2026 capital gains reform makes the country meaningfully more attractive for anyone planning an eventual resale, cutting the tax bite on a future sale by more than half compared with the pre-reform rate. Given how recently that change took effect, working with a Dominican attorney and confirming any tax figure against current, post-June-2026 guidance, rather than an older guide however well-written, is the single most useful piece of due diligence available to a new buyer right now.