The CONFOTUR Law (158-01), or Tourism incentive law of the Dominican Republic, is designed to promote the development of the country’s tourism industry by providing tax incentives to developers and buyers of properties in regions with high potential or natural beauty for tourism.
As a real estate investor, if you come across a new development that is advertised as being under the CONFOTUR Law, it is a plus for your investment as it may make you eligible for certain tax exemptions. As a buyer, you could be exempt from paying certain property taxes such as the 3% property tax transfer fee, which is paid when transferring the title of the property and the annual 1% Real Estate Property Tax (IPI) for a period of 10-15 years.
For developers, businesses, and companies that qualify for the incentives and benefits outlined in the law, they may be eligible for a 100% exemption from certain taxes, including income tax, construction permit and import duties. These exemptions are typically available for a period of 10 years from the completion of the project. However, it’s important to note that these exemptions are subject to change and can be revised periodically by the Government.
It’s also important to note that not all properties or projects fall under the CONFOTUR Law and it’s important to check with a local attorney or professional if a specific property is eligible for the incentives before making a purchase.
In summary, the CONFOTUR Law can be a major advantage for real estate investors looking to purchase property in regions with high potential for tourism development in the Dominican Republic. As it offers potential tax exemptions for buyers and developers that can result in significant savings over time. Therefore it’s recommended to check if a specific property is eligible for these incentives before making a purchase.