DR property tax is gentler than most places

The Impuesto al Patrimonio Inmobiliario (IPI) is the Dominican equivalent of property tax. It's a flat 1% on the value above a threshold, not on the full value like in most U.S. states. For most foreign buyers, this means thousands of dollars less per year than they're used to.

The threshold (2026)

RD$10,000,000 (roughly USD $170,000 at current exchange rate).

If your property is valued at or below this, you pay zero IPI. If it's worth more, you pay 1% on the amount over the threshold.

A worked example

Property worth USD $400,000 (about RD$23,600,000):

• Threshold: RD$10,000,000
• Taxable portion: RD$13,600,000
• IPI: 1% = RD$136,000 per year (about $2,300 USD)

Who pays IPI

• Individuals owning property above the threshold
• Companies owning real estate (no threshold for companies; pay on full value)
• Both residents and non-residents

Who doesn't

• Buyers of CONFOTUR-certified properties during the 15-year exemption
• Owners over 65 years old whose property is their sole asset (some restrictions)
• Properties used exclusively for agricultural production
• Properties owned by tax-exempt non-profits

When and how to pay

• Filing window: March 1 to March 11 annually
• Pay in full or split into two installments (March 11 and September 11)
• File online at dgii.gov.do or in person at any DGII office
• Late penalty: 10% + interest

The valuation: where most foreign buyers overpay

DGII calculates IPI based on the cadastral value (valor catastral), not the market value. Cadastral values are updated periodically and often lag market values by 20-40%. Two reasons foreigners overpay:

1. They use the purchase price as the basis. DGII uses the cadastral value, which is usually lower.
2. They miss the appeal window. If you think your cadastral is too high, you can appeal within 30 days of receiving the assessment.

The appeal process

• Hire a DR property tax specialist (different from a real estate attorney)
• File the appeal with supporting comps
• DGII reviews in 60-90 days
• If granted, your assessment is reduced for that year and going forward

Cost of professional appeal: $200-$500. Average reduction: 15-25% for over-assessed properties.

What we tell clients

Pay your IPI on time. The 10% late penalty hurts more than the legitimate IPI ever will. And once every 3-5 years, review your cadastral assessment with a specialist. If the property's market value moved more than the cadastral did, no action needed. If the cadastral seems high relative to recent comps, file an appeal.