How Much Is the Property Transfer Tax in the DR? The 3% ITI Explained (2026 Guide)

How the 3% Property Transfer Tax Works in the Dominican Republic

If you're buying property in the Dominican Republic, the single largest line item on your closing statement — after the price itself — will almost always be the Impuesto sobre Transferencias Inmobiliarias (ITI), commonly called the 3% transfer tax. Understanding how it's calculated, who pays it, and when it's due will save you from budget surprises and from the (very common) mistake of assuming it applies to the contract price alone.

This guide walks you through the mechanics as they stand in 2026. Tax rules and indexed thresholds change over time, so treat anything specific here as a starting point and confirm current figures directly with the Dirección General de Impuestos Internos (DGII) or a licensed Dominican attorney (abogado) and accountant (contador) before you sign or wire funds.

What the ITI Actually Is

The ITI is a one-time tax triggered when a real estate title is transferred from one owner to another in the Dominican Republic. Practically speaking, you cannot register the new Certificado de Título in your name at the Registro de Títulos without showing proof that the ITI has been paid. No payment, no registration — and an unregistered title is not real ownership under Law 108-05 (the property registry law).

The headline rate is 3% of the taxable base. The headline rate is the easy part. The taxable base is where buyers get tripped up.

The Taxable Base: Higher of Two Numbers

This is the most misunderstood point in DR real estate, so read it twice:

The 3% ITI is calculated on the higher of (a) the price stated in the purchase contract or (b) the market value assigned by DGII in its own appraisal (avalúo).

It is not simply 3% of the sale price. It is not the cadastral or "assessed" value you might see on an old tax record. DGII conducts its own valuation of the property when the transfer file is submitted, and if their number comes in higher than your contract price, the tax is recalculated on their number.

Why does this matter?

• If you and the seller try to "lower" the declared price to reduce taxes, DGII's appraisal will likely override you anyway.
• If you're buying a property whose contract price looks low relative to comparable sales, expect the tax bill to be higher than 3% of your purchase price.
• The appraisal is not always instantaneous — it can add days or weeks to the closing timeline.

Always ask your attorney to estimate the likely DGII valuation before you finalize your closing budget, not just 3% of the contract amount.

Who Pays the ITI — Buyer or Seller?

By Dominican custom and by virtually every standard purchase contract: the buyer pays the ITI. The seller pays capital gains tax (if any) on their side; the buyer pays the transfer tax and the registration fees.

This is contractually negotiable in theory, but in practice, almost no seller will agree to absorb it. If a deal "includes all taxes" or "closing costs paid by seller," read the fine print carefully and have your abogado confirm in writing exactly which line items are covered.

When Is It Due?

The ITI must generally be paid within six months of signing the Contrato de Venta (the definitive sale contract, signed before a Dominican notary). Pay late and you'll face surcharges and interest from DGII — which can add up fast on a six- or seven-figure transaction.

In a typical clean closing, the sequence looks like this:

1. Sign the Promise of Sale (Promesa de Compraventa) and pay a deposit (often 10%) into escrow.
2. Complete due diligence — title study at Registro de Títulos, certifications, liens search.
3. Sign the definitive Contrato de Venta before a notary.
4. Wire the balance of the purchase price.
5. File the transfer package with DGII; DGII issues its valuation.
6. Pay the 3% ITI (plus stamps and minor fees).
7. Submit the paid transfer file to Registro de Títulos.
8. Receive your new Certificado de Título in your name.

Don't relax until step 8 is complete. Until the title is registered, your ownership is contractual, not real.

What Else You'll Pay at Closing

The ITI is the biggest tax, but it's not the only closing cost. Plan for a total closing budget of roughly 3.5% to 5% of the purchase price, depending on the deal. Typical line items include:

• 3% ITI to DGII.
• Registration and stamp fees at the Registro de Títulos (modest, but real).
• Notary fees — usually a small percentage of the contract value, negotiable.
• Legal fees for your independent abogado — commonly around 1% to 1.5% of the purchase price, sometimes flat-fee for smaller deals.
• Due diligence costs — title certification, certifications of no debt, surveyor fees if a deslinde is needed.

Always get a written closing-cost estimate from your attorney before you commit to a deposit.

CONFOTUR Exemptions: Real, but Often Overstated

If you're buying in a tourism project certified under Law 158-01 (CONFOTUR), the project may qualify for an ITI exemption — meaning the 3% transfer tax can be waived on qualifying units. This is one of the most attractive incentives in DR real estate.

Two important caveats:

• The exemption is administered through CONFOTUR / the Ministry of Tourism (MITUR), and the developer must hold a current, valid certification for the specific project. Ask to see the resolution.
• The transfer-tax exemption realistically applies to the first buyer from the developer. If you're buying a CONFOTUR unit on the resale market, you should generally assume you will pay the full 3% ITI — not inherit the exemption. Confirm this case-by-case with your abogado and with DGII.

Don't let a sales pitch convince you that "all CONFOTUR properties are tax-free forever." That's not how the law works in practice.

Common Pitfalls

• Budgeting 3% of the contract price and being surprised when DGII's appraisal raises the base.
• Assuming the developer's lawyer is your lawyer. They are not. Hire your own independent abogado.
• Wiring the full purchase price before due diligence is complete. Use a structured escrow.
• Missing the six-month payment window because the file got stuck somewhere — track it.
• Under-declaring the price to save tax. DGII's own appraisal will usually catch it, and a fraudulent declaration creates legal exposure for you as the buyer.
• Confusing ITI with IPI. ITI is the one-time transfer tax. IPI is the annual property tax (1% on value above an inflation-indexed threshold, on an owner's aggregate Dominican property). Different tax, different rules — confirm the current IPI threshold with DGII.

FAQ

Is the 3% rate the same for foreigners and Dominicans? Yes. Foreign buyers are taxed identically to Dominican buyers. Your right to own here flows from constitutional equal treatment, not a special foreign-investor regime.

Can I pay the ITI from abroad? Payment is made in Dominican pesos to DGII. In practice your attorney handles it on your behalf, usually from funds you wire in for closing. Keep the recibo de pago (payment receipt) — it's part of your permanent title file.

Does the ITI apply to land, condos, and houses equally? Yes — it applies to any titled real estate transfer, whether a beachfront lot, a Punta Cana condo, or a villa in Cabrera.

What about pre-construction purchases? The ITI is triggered when title transfers — typically at delivery, not at contract signing. If the project is CONFOTUR-certified and you're the first buyer, you may qualify for the exemption. Get this in writing.

What if I'm buying through a Dominican SRL (company)? The ITI still applies on the transfer of the property into the SRL. If you later sell the shares of the SRL rather than the property itself, the tax analysis is different — talk to a contador before assuming a "share sale" avoids ITI cleanly. DGII is aware of this structure.

Before You Wire a Dollar

Tax rates, indexed thresholds, and administrative procedures in the Dominican Republic do change, and DGII appraisals are case-specific. Use this guide to understand the framework — then confirm the current numbers and your specific situation with DGII, an independent licensed Dominican attorney, and a Dominican accountant before you commit. The cost of an hour of professional advice is trivial compared to the cost of a closing surprise.