What Is the Property Tax (IPI) in the Dominican Republic and When Is It Paid?

If you are planning to buy property in the Dominican Republic, it is essential to understand the Property Tax, known as IPI (Impuesto al Patrimonio Inmobiliario). This tax is a key factor to consider when investing in real estate in the country.

What Is the IPI?

The Property Tax (IPI) is an annual tax applied to the total value of real estate properties owned by an individual in the Dominican Republic, when the total value exceeds the exemption threshold established by the General Directorate of Internal Taxes (DGII).

This tax is not calculated per property, but rather based on the combined value of all properties registered under the same owner.

What Is the IPI Tax Rate?

  • The IPI tax rate is 1% annually

  • It is applied only to the amount that exceeds the exemption threshold

  • The exemption amount is periodically adjusted by the DGII to reflect inflation

Example:

If the total value of your properties exceeds the exemption limit, you will only pay 1% on the amount above that limit, not on the total property value.

Who Must Pay the IPI?

The IPI applies to:

  • Individuals (Dominican or foreign nationals)

  • Property owners with one or more real estate properties in the Dominican Republic

  • Owners whose total property value exceeds the current exemption threshold

Who Is Exempt from Paying the IPI?

The following are exempt from paying the IPI:

  • Property owners whose total property value is below the exemption threshold

  • Individuals 65 years of age or older who own a single residential property

  • Low-cost housing classified under government programs

  • Companies, which do not pay IPI but are subject to the Assets Tax

When Is the IPI Paid?

The IPI is an annual tax and is typically paid in two installments, according to the schedule set by the DGII:

  • First installment: usually due in the first half of the year

  • Second installment: usually due in the second half of the year

The DGII notifies property owners of the amount due and the exact payment dates through its official platform.

What Happens If the IPI Is Not Paid?

Failure to pay the IPI may result in:

  • Late fees and interest

  • Penalties

  • Legal issues when selling or transferring the property

  • Staying current with IPI payments is essential to protect your real estate investment.

Why Is the IPI Important for Real Estate Investors?

Understanding the IPI helps investors:

  • Accurately calculate annual ownership costs

  • Properly plan real estate investments

  • Avoid legal and financial penalties

  • Make informed investment decisions

Conclusion

The IPI should not be seen as an obstacle, but rather as part of responsible real estate planning in the Dominican Republic. With proper guidance, investors can maximize their returns while remaining compliant with tax regulations.

If you are interested in investing safely and profitably in the Dominican Republic, our real estate team is ready to assist you every step of the way.