Dominican Transfer Tax in 2026: Sale Price or DGII Appraisal?

Is the Dominican Transfer Tax Based on Sale Price or Government Appraisal?

If you're buying property in the Dominican Republic in 2026, one of the first surprises at closing is the 3% transfer tax (Impuesto sobre Transferencias Inmobiliarias, or ITI). The number itself is simple. What confuses almost every foreign buyer — and even some local agents — is the base the tax is calculated on.

Is it the price you actually paid? Or is it a government valuation you've never seen?

The short, honest answer: it's whichever is higher. Below is what that really means in practice, how the DGII appraisal works, who pays, and where buyers most often get caught off guard.

The Short Answer: Higher of Contract Price or DGII Appraisal

The 3% ITI is paid by the buyer to the Dirección General de Impuestos Internos (DGII) — the Dominican tax authority — as part of registering the title transfer with the Registro de Títulos.

DGII calculates the 3% on the greater of:

1. The contract price declared in your Contrato de Venta (deed of sale), and
2. DGII's own administrative appraisal of the property (the avalúo).

This matters because it removes a common misconception. You will sometimes hear:

• "Just put a lower price on the deed and pay less tax." — This doesn't work, because DGII will compare your declared price to its own appraisal and tax the higher figure.
• "They always use the assessed value, so the contract price doesn't matter." — Also wrong. If your contract price is higher than the DGII appraisal, the contract price is the base.

In a healthy, arm's-length transaction at market value, the contract price is usually higher than the DGII appraisal, so 3% of the contract price is what you actually pay. But never assume — get the appraisal done before you budget your closing.

How the DGII Appraisal Actually Works

The DGII appraisal — sometimes called the avalúo fiscal or tasación de la DGII — is an administrative valuation that the tax authority assigns to the property for tax purposes. It is not the same as:

• A bank appraisal for a mortgage,
• A private appraiser's market valuation, or
• The valor catastral used elsewhere in Latin America.

Once your Contrato de Venta is signed and notarized, your attorney files the transfer with DGII. DGII reviews the contract, the title, and the property location, and issues its appraisal. Only after the appraisal is set and the 3% is paid (along with stamps and minor fees) does the Registro de Títulos issue the new Certificado de Título in the buyer's name.

A few practical points:

• Appraisals can be requested in advance. Your attorney can ask DGII for a pre-transaction appraisal so you know the tax base before closing. This is strongly recommended for higher-value or unusual properties.
• Appraisals can sometimes be contested. If DGII's appraisal looks unreasonably high compared to the real market, a Dominican attorney or contador can file an administrative challenge — but expect time, paperwork, and no guarantee.
• Appraisals are updated. DGII periodically refreshes its valuation tables, so two identical units in the same building sold a year apart can have meaningfully different appraisals.

Laws, fees, and DGII procedures change. Always confirm the current rate, thresholds, and process directly with DGII (dgii.gov.do) or a licensed Dominican attorney and contador before you close.

Why the "Higher Of" Rule Exists

For decades, under-declaring the deed price was a common way to avoid tax. A seller and buyer would agree on, say, US$300,000 but write US$150,000 on the deed. The buyer paid less ITI; the seller paid less capital gains.

The "higher of" rule is DGII's response. By anchoring the tax base to its own appraisal — which the parties cannot control — DGII protects revenue and, incidentally, protects buyers from a different problem:

• A low declared price hurts you when you sell. Your future capital gain is calculated against your declared acquisition cost. If you underreport today, you create a larger taxable gain tomorrow.
• A low declared price can complicate residency-by-investment. Programs that require a minimum real-estate investment look at the registered value.
• A low declared price can flag anti-money-laundering review for the wire transfer that doesn't match the deed.

In other words: declare the real price. Pay the real 3%. Sleep better.

Who Pays What at Closing

In a standard Dominican resale:

• Buyer pays: the 3% transfer tax, registry stamps and minor fees, their own attorney, and (usually) the notary.
• Seller pays: any capital gains tax owed on the sale, plus any outstanding IPI (annual property tax), condominio dues, or utilities.
• Commission: typically paid by the seller, but always confirm in writing.

Budget roughly 4–5% of the purchase price in total closing costs as a working estimate — the 3% ITI plus legal fees and registration costs — but ask your attorney for a written quote for your specific deal. Some attorneys quote a flat fee; some quote a percentage.

Special Cases Worth Knowing

CONFOTUR projects

If the property sits inside a CONFOTUR-certified tourism project (Law 158-01), the first buyer from the developer is typically exempt from the 3% transfer tax and from IPI for a defined period. This is one of the strongest incentives in Dominican real estate — but:

• The exemption attaches to the project certification and the first transaction.
• On resale, the second buyer ordinarily owes the 3% in the normal way.
• Confirm the project's CONFOTUR resolution number with your attorney and check status with the Ministry of Tourism (MITUR).

Don't take the developer's word for it; ask to see the resolution.

Pre-construction and assignments

If you're buying off-plan and assigning your purchase contract before delivery, the tax treatment can differ. Get specific advice — assignments are a known gray area where buyers have been surprised by tax bills.

Inherited and gifted property

Transfers by inheritance or donation are taxed under different rules, not the 3% ITI. Don't extrapolate.

Corporate purchases (SRL)

Buying via a Dominican SRL doesn't avoid the 3% on the property transfer itself. Later transferring the shares of the SRL is a separate transaction with its own tax analysis — and DGII has gotten more sophisticated about looking through share transfers that are really property sales in disguise.

Common Pitfalls

• Budgeting only against the contract price. If the DGII appraisal comes in higher, your 3% goes up. Request the appraisal early.
• Assuming a "friendly" lower deed price will save you money. It usually costs you more later, exposes you to AML scrutiny, and can be voided.
• Trusting the seller's or developer's lawyer. Hire your own independent licensed Dominican abogado. This is the single best money you'll spend.
• Confusing ITI with IPI. ITI is the one-time 3% transfer tax. IPI is the annual property tax — a 1% rate that only applies on the portion of an owner's aggregate property value above an inflation-indexed threshold set annually by DGII. Check the current-year threshold with DGII; don't rely on numbers in old blog posts.
• Forgetting the deadline. Transfer taxes must be paid within a defined window after the deed is signed, or surcharges apply. Your attorney should track this.

Quick FAQ

Is the 3% negotiable between buyer and seller? By custom, the buyer pays it. You can contractually shift it to the seller, but DGII still expects it on the higher of contract price or appraisal.

Can I see DGII's appraisal before I sign? Yes — your attorney can request an avalúo in advance. Do this for any non-standard property.

Does the 3% apply to land as well as built homes? Yes, transfer tax applies to real estate transfers generally. The appraisal methodology differs, so ask DGII or your attorney for land specifically.

What if the property is in a company and I buy the company? You may avoid the 3% on the property transfer, but you inherit every liability the company has. Almost always a worse deal than a clean property purchase unless structured carefully with counsel.

The Bottom Line

In 2026, the Dominican 3% transfer tax is calculated on the higher of your contract price or the DGII appraisal, paid by the buyer, and required before your new Certificado de Título is issued. Don't try to game the deed price, don't budget against the lower of the two numbers, and don't close without an independent Dominican attorney who has confirmed the appraisal and the exact figures with DGII directly.

Rates, thresholds, and procedures change — always verify current numbers with DGII or a licensed Dominican professional before you wire any money.