CONFOTUR Law: how it saves you thousands in taxes

What is the CONFOTUR Law and why is it so important

Law 158-01 for the Promotion of Tourist Development, known as the CONFOTUR Law, is probably the greatest tax advantage available to real estate investors in the Dominican Republic.

Origin and purpose

Created in 2001, the law seeks to incentivize investment in tourist zones through significant tax exemptions. It has been one of the main drivers of the real estate boom in Punta Cana.

Concrete tax benefits

1. Transfer Tax Exemption (3%)

When buying a property in a qualified project, you don't pay the 3% transfer tax.

• USD 200,000 property: you save USD 6,000
• USD 500,000 property: you save USD 15,000
• USD 1,000,000 property: you save USD 30,000

2. IPI Exemption for 15 years

The Real Estate Property Tax (1% annually on excess value) is exempt for 15 years.

Accumulated savings over 15 years for a USD 300,000 property:

• Annual IPI without CONFOTUR: ~USD 1,320
• Total savings in 15 years: ~USD 19,800

3. Construction tax exemption

Developers also benefit, which translates into more competitive prices for the end buyer.

Requirements to qualify

Not all properties qualify. The project must:

1. Be registered with CONFOTUR/Ministry of Tourism
2. Be located in a designated tourist zone (Punta Cana, Samana, Puerto Plata, etc.)
3. Be a new project (does not apply to resale of individual properties)
4. Have approval from the Tourist Development Council

How to verify if a project has CONFOTUR

1. Ask the developer: They should be able to show the approval resolution
2. Check with CONFOTUR: The organization has a list of approved projects
3. Verify with your lawyer: Part of standard due diligence
4. On Real3D: Projects on our platform indicate if they have CONFOTUR status

Total savings comparison

| Property | Without CONFOTUR | With CONFOTUR | Savings | |----------|-----------------|--------------|---------| | USD 150,000 | USD 4,500 + IPI | USD 0 | ~USD 14,000 (15 yrs) | | USD 250,000 | USD 7,500 + IPI | USD 0 | ~USD 20,000 (15 yrs) | | USD 500,000 | USD 15,000 + IPI | USD 0 | ~USD 65,000 (15 yrs) | | USD 1,000,000 | USD 30,000 + IPI | USD 0 | ~USD 155,000 (15 yrs) |

Frequently asked questions

Is the exemption automatic? No. The developer must process the exemption and benefits transfer to the buyer at the time of sale.

Can you lose the benefit? If you change the property's use from tourist to another, you could lose the exemption.

Does it apply to foreigners? Yes, without any restriction. The law does not discriminate by nationality.

Does it apply on resale? The first transfer is exempt. For subsequent resales, it depends on whether the project is still within the exemption period.

Does the law have an expiration date? The law has been renewed and expanded several times. It currently has no expiration date, but conditions may change.

Practical tips

1. Prioritize CONFOTUR projects in your search — the savings are substantial
2. Verify the validity of the specific project's CONFOTUR registration
3. Include the clause for CONFOTUR benefits in your purchase agreement
4. Don't assume all projects in tourist zones have CONFOTUR
5. Calculate total savings including the 15 years of IPI exemption

Conclusion

The CONFOTUR Law can save you tens of thousands of dollars. It's one of the fundamental reasons why investing in new tourist projects in DR is so fiscally attractive. Don't miss this advantage.