The CONFOTUR Law (No. 158-01) exempts qualifying Dominican properties from both the 3% transfer tax and 1% annual property tax (IPI) for 15 years. For a $500,000 villa, this saves over $65,000 in taxes, fundamentally improving your return on investment.
What Is CONFOTUR?
CONFOTUR is a Dominican government incentive program that promotes real estate development in tourism zones. The law exempts approved properties from two major tax burdens that normally apply to all property owners.
This means if you buy a CONFOTUR-approved property, you skip the 3% tax when you purchase and avoid the annual 1% property tax for 15 years. After year 15, you pay taxes like a regular property owner.
The Two Tax Exemptions Explained
1. The 3% Transfer Tax (Avoided at Purchase)
When you buy a Dominican property normally, you pay 3% of the purchase price (or the government’s appraised value, whichever is higher) to the tax authority (DGII).
Example: A $250,000 property = $7,500 tax bill at closing.
With CONFOTUR: You pay $0.
2. The 1% Annual IPI Tax (Waived for 15 Years)
After ownership, all Dominican property owners pay an annual Impuesto al Patrimonio Inmobiliario (IPI) of 1% on property value. This applies unless you stay below the exemption threshold of approximately $166,000 USD.
Example: A $300,000 property = $3,000 per year in IPI taxes ($45,000 over 15 years).
With CONFOTUR: You pay $0 for the first 15 years.
Real Dollar Comparison: CONFOTUR vs. Standard Purchase
| Property Price | Transfer Tax (3%) | Annual IPI (15 years) | Total Savings with CONFOTUR |
|---|---|---|---|
| $150,000 | $4,500 | $0 (Below threshold) | $4,500 |
| $250,000 | $7,500 | $12,600 (15 yrs) | $20,100 |
| $500,000 | $15,000 | $50,100 (15 yrs) | $65,100 |
| $750,000 | $22,500 | $75,150 (15 yrs) | $97,650 |
Which Projects Qualify for CONFOTUR?
Not all Dominican properties qualify. The project must be government-approved as a tourism development. Approved projects are located in designated tourism zones and must meet specific infrastructure and quality standards.
Key CONFOTUR Projects in 2026
- Noval Properties developments (Bavaro, Cabarete)
- Palmeras Cabarete
- Larimar City (Miches)
- PROMICHES (Puerto Plata area)
- Cap Cana projects (select properties)
- Atlantic Luxury Towers (Puerto Plata)
Older, resale properties from non-approved projects do not qualify. You must buy directly from the developer or within a few years of initial sale while the project still holds CONFOTUR status.
How CONFOTUR Improves Your ROI
For Rental Investors (“Superhosts”)
Rental investors care about cash flow and long-term appreciation. The tax savings dramatically improve your net income.
Example: $400,000 Airbnb villa
- Monthly rental income: $2,500 (60% occupancy at $150/night)
- Annual gross: $30,000
- Without CONFOTUR: Year 1 costs include $12,000 transfer tax + $4,000 annual IPI = $16,000 gone
- With CONFOTUR: Year 1 costs are $0 for these taxes
- Over 15 years, you keep an extra $60,000+ that would have gone to taxes
For Resale Investors
If you buy a CONFOTUR property and sell it within the 15-year window, the buyer assumes the remaining exemption. This makes your property more attractive to future buyers because they also benefit from tax savings.
For Retirees
Retirees buying a single home for personal use benefit less from CONFOTUR than investors. This is because most retirees stay below the $166,000 IPI threshold anyway. However, if you own multiple properties or buy a luxury villa, the savings become significant.
How to Verify CONFOTUR Status
- Ask the developer for the official MITUR (Ministry of Tourism) approval document.
- Request the CONFOTUR resolution number and approval date.
- Confirm the specific duration (typically 15 years from project launch).
- Have your attorney verify the status independently before signing any contract.
- Have independent legal counsel confirm: approval resolution, project scope, remaining duration, transferability conditions, applicability to your specific unit.
- Request written confirmation from the developer that future transfers maintain the exemption.
Important: When CONFOTUR Ends
After the 15-year exemption expires, you become a regular property owner. You will owe the full 1% annual IPI on your property value (unless you fall below the exemption threshold).
This means if you own a CONFOTUR property long-term, you should plan for this tax liability starting in year 16. Some investors sell before the exemption ends to capture appreciation and avoid the future tax burden.
Key Entities Explained
MITUR (Ministry of Tourism)
The Dominican government agency that approves CONFOTUR projects. Always verify approval directly through MITUR.
DGII (General Directorate of Internal Revenue)
The tax authority that normally collects the 3% transfer tax and 1% annual IPI. CONFOTUR properties are exempt from DGII taxes during the exemption period.
Law 158-01
The official Dominican law establishing the CONFOTUR incentive. This is the legal foundation of the exemption.
What This Means for US and Canadian Buyers
As a foreign buyer, CONFOTUR saves you money just like it does for Dominican citizens. There is no discrimination based on nationality. The 15-year tax exemption applies equally to Americans, Canadians, and residents of any country.
For US buyers, these Dominican tax savings are separate from your US tax obligations. You may still owe US tax on Dominican rental income, so consult a tax professional. However, the local Dominican taxes are genuinely eliminated during the exemption period.
Canadian buyers should verify with a cross-border tax advisor, as Canada taxes worldwide income. The CONFOTUR benefit is real, but your Canadian tax liability is a separate matter.
CONFOTUR vs. Non-CONFOTUR Properties
Many high-quality properties in the Dominican Republic are not CONFOTUR-approved. Resale villas, older developments, and properties outside tourism zones do not qualify. These are perfectly good investments, but they lack the tax advantage.
When comparing prices, always factor in the tax difference. A CONFOTUR property (depending on projected holding period, tax exposure, rental performance, financing structure, and appreciation assumptions) at $350,000 might beat a non-CONFOTUR property at $300,000 because the taxes are eliminated.
Common Questions About CONFOTUR
No. The seller sets the price. However, the tax savings make a CONFOTUR property more valuable to buyers. In competitive markets, CONFOTUR status should influence your offer.
Yes. If you sell your property to another buyer before year 15 ends, the exemption transfers. The new owner receives the remaining exemption years (if you own for 5 years, the buyer gets 10 years remaining).
The exemption applies to the property, not the income. You still pay Dominican rental income tax (which is minimal for short-term rentals). However, you avoid the property taxes that burden regular owners.
No. CONFOTUR is a tax incentive, not a rental guarantee. Your actual rental performance depends on property quality, location, management, and market demand.
Your property becomes a normal Dominican property. You pay the full 1% annual IPI unless you fall below the exemption threshold. The property itself is unaffected; only the tax status changes.
Yes. Law 158-01 is a formal statute. The incentive is not a promotional offer that can be revoked. However, always have your attorney confirm the status before purchasing.
Best Choice Based on Your Situation
Choose CONFOTUR If You Are:
- A rental investor seeking maximum cash flow
- Buying a property over $250,000
- Planning to hold the property for 10+ years
- Looking for an approved, developer-backed project
- Willing to buy new or near-new construction
CONFOTUR May Not Matter If You Are:
- Buying a property under $150,000 (below IPI threshold)
- Purchasing a resale villa from an older development
- Planning a short-term 5-year hold
- Prioritizing location over tax incentives
RealtorDR’s Expertise on CONFOTUR
RealtorDR specializes in matching North American investors with CONFOTUR-approved projects that align with their financial goals. Our team verifies CONFOTUR status independently and ensures all legal documentation is complete before you sign anything.
We have closed over 600+ property transactions and understand exactly how tax incentives impact your net return. If you are evaluating CONFOTUR projects, our analysis includes ROI modeling that accounts for the full 15-year tax picture.
Key Takeaways
- CONFOTUR eliminates the 3% transfer tax and 1% annual property tax for 15 years, saving $20,000–$100,000+ depending on property price.
- Only government-approved tourism projects qualify. Always verify CONFOTUR status with an independent attorney before purchasing.
- Tax savings transfer to new owners if you sell before year 15 ends, making your property more attractive to buyers.
- For rental investors on properties over $250,000, CONFOTUR dramatically improves cash flow and net ROI over the exemption period.
- After year 15, properties become subject to standard Dominican taxes. Plan ahead if holding long-term.
- Foreign buyers receive the same CONFOTUR benefits as Dominican citizens. Confirm with your tax advisor on home-country tax obligations.