Why buy a home in a development that “has Confotur”?
Simple — you can save thousands of dollars.
Why? Because Confotur means you don’t have to pay certain taxes!
A few key specifics:
Confotur is the name of the Dominican law that grants tax exemptions to owners of specific properties.
Only some properties are covered by Confotur. A builder or developer needs to apply to the government to be granted Confotur.
Which taxes are you exempt from paying?
- Transfer tax:Â 3% of the value of the property, due when transferring ownership.
- IPI Tax: Short for Impuesto Patrimonio Inmobiliari, IPP is the annual tax everyone must pay who owns a property with a value of at least US$150,000 (approximately).
Purchase a property with Confotur and you’re exempt from both of these!
And if you buy or build a resort, hotel or hotel complex, you get an exemption from:
- Import taxes: On machinery, materials and equipment to improve these types of projects, as long as they have a minimum of 5 years (verifiable) since construction.
What if I buy or own more than one property?
If a project is covered by the Confotur law, it’s excluded when calculating the value of all real estate assets owned. If you own other projects and their combined value exceeds the threshold amount (approximately US$150,000), you pay 1% of the amount above this threshold.
What property developments will have Confotur?
The Dominican government created the Confotur law to boost development in existing tourist areas and areas with potential to become tourist hotspots.
Essentially, the law incentivizes activities that contribute to the tourism industry and encourage real estate development in underdeveloped areas.
It’s important to note that not all development in these regions automatically has Confotur. As mentioned earlier, owners, builders and developers have to apply and be granted Confotur.
How long is the tax exemption for the Confotur law?
The Confotur tax exemption lasts for 15 years from the date of completion of construction work and/or the completion of equipment installation in the property.