Property taxes

@Titus Krause thanks, can u be more specific. I don't know what these initials stand for.

@Titus Krause thanks much for the explanation

@Titus Krause Do you know the process when building a home? We purchased the undeveloped land in early 2020 and then started building our home in 2021. It's still not quite finished, but I'm assuming at some point we need to report to DGII had we now have a home on the previously empty lot? Or will they know that because of the permits obtained prior to construction?

@lennoxnev What is the property tax?

It is an annual tax that is applied to the total sum of the encumbered real estate assets registered by individuals and Trusts.

Who is subject to the payment of this tax?


     Individuals and Trusts


Fees to pay


     Individuals: a rate of 1% is applied on the excess value of (RD$8,829,763.30) of the encumbered assets.
     Trusts: 1% of the total value of the taxed estate.

This tax is paid in two (2) semi-annual installments, with the deadline for the payment of the first installment being March 11 and the second on September 11 of each year.

​

What is an encumbered estate?

     Properties that do not enjoy any exemption and at the same time have a joint value greater than (RD$8,829,763.30).
     For trusts, any property that does not enjoy an exemption regardless of its value.


Filing and Payment Date

The Real Estate Tax Affidavit (IPI) must be submitted during the first sixty (60) days of the year.

Payment must be made in two installments (Or paid all together):

     The first installment must be paid on March 11.
     The second installment must be paid on September 11.


What properties can be reached by this tax?

     All homes.
     Urban lots.
     Properties intended for commercial, industrial and professional activities.


Exemptions

They are exempt from paying this tax:

     People over 65 years of age with a single real estate property intended for housing are exempt from paying the Property Tax (IPI).      Legal basis: Law 18-88, Arts.  2 and 6;  Law 171-07, Article 2.
     Pensioners and rentiers from foreign sources by 50%.
     Rural land.
     Improvements for agricultural use located on rural land.
     Properties exempted by special laws (eg Law 158-01).
     All properties reached, whose joint value is equal to or less than RD$8,829,763.30​.​

@Titus Krause hello.  I'm hoping based on your previous posts you can help me understand the tax implications here.  I have just closed on a property in Casa Linda and already had my pensioner residency.  Does this mean I don't pay land transfer tax? Or must I pay it and then request a refund?  If refunded, is it a credit against future tax payments or an actual refund?  I will turn 65 in May. 

I appreciate your help and thank you for any clarity you can offer

@thezuber good day, hope you're well.

You'll still have to pay the land transfer tax, (3%) of the value.

Now, in regards to anual property taxes. People over 65 years of age with a single real estate property intended for housing are exempt from paying the anual Real Estate Property Tax (IPI).

This of course, like everything else in the DR, you need to apply for this. It doesn't go into effect automatically.

If you're interested in more information, I'm more than happy to assist you.

How does one apply for this?

"Now, in regards to anual property taxes. People over 65 years of age with a single real estate property intended for housing are exempt from paying the anual Real Estate Property Tax (IPI)."

if you don't receive notice/bill from the government then I still do not understand how, when and where you find out the amount of annual property taxes due or how/where you pay them.

Best course of action is hiring an attorney or accountant to solicit you IPI status.

And, most people find out that they owe taxes when they are selling their property and are surprised with a big bill from the DGII (since late fees and interests are acrued).

Be advised late fees and interest compound very quickly!

Be advised late fees and interest compound very quickly!
-@planner

Very true, and ends up being expensive resolving the issue at that point.

I believe the interest is 3% per month and it's compounded!

Based on Mark's email it seems that his property was below $150,000 and still he owed taxes. how is it possible?

My questions here would be:

1. who determines the price of property
2. do you have to file even if the property is below RD$8,829,763.30​ to show the goverment that it is below the threshold and receive the exemption?

thank you