On 18 June 2026, the Dominican Republic enacted Law 30-26 — the most significant overhaul of the country’s tax code in years. If you own property in the DR, are buying, or are considering it, this law affects your math in a material way.
Some of the changes are immediately favorable, particularly for sellers and for families managing intergenerational transfers. Others add cost, specifically for landlords collecting rental income. And a few things that were rumored to change did not, the 3% transfer tax and the 1% annual property tax (IPI) are untouched.
After 9 years working exclusively in the Dominican Republic real estate market, I can say with confidence: changes of this magnitude don’t happen often. The last time the tax landscape shifted this dramatically, it reshaped exit strategies, holding structures, and buyer calculus across the board. This one will too.
This article breaks down every provision that matters for real estate buyers, sellers, and investors, what changed, when it took effect, and what it means for your position.
The Short Version
Before the details: here’s what Law 30-26 actually does for real estate:
- Capital gains tax cut to a flat 10% — down from rates that reached 25% for individuals. Already in force.
- Two full capital gains exemptions created — primary residence rollover (6-month window) and over-65 exemption.
- Mortgage registration tax phasing out — 1% in 2027, gone entirely in 2028. Lowers buyer closing costs.
- Rental income withholding up from 10% to 15% — effective 1 July 2026. Landlords take note.
- Gift/family transfer tax slashed from 27% to 3% — one of the most consequential changes for estate planning.
- DGII enforcement strengthened — the tax authority has real teeth now, and there’s a tax amnesty window until 31 December 2026.
- CONFOTUR remains intact — but scrutiny of project classifications has increased.
- 3% transfer tax and 1% IPI unchanged.
Now the detail.
Capital Gains on Property Sales: The Rate That Mattered Most
In force since 18 June 2026
This is the headline change, and it’s a significant one.
Before Law 30-26, capital gains on the sale of real estate by individuals were taxed as ordinary income on the Dominican progressive scale — which topped out at 25% for individuals. For a seller who had held a property through several years of strong appreciation, the tax drag on exit was substantial, and it quietly discouraged transaction activity among owners who were otherwise inclined to sell.
Law 30-26 changes this entirely. Capital gains earned by individuals on the sale of real estate are now taxed at 10%, as a single, final payment.
The gain is still calculated the same way: sale price minus acquisition cost, with the acquisition cost adjusted for inflation. The inflation adjustment is a meaningful feature of the Dominican system, it protects sellers from being taxed on appreciation that’s simply monetary rather than real, and it survives the reform intact.
What this means in practice: If you bought a condo in Bávaro five years ago for $250,000 and it’s worth $380,000 today, your taxable gain (after inflation adjustment on the acquisition cost) might land around $100,000. Under the old regime, you could face $25,000 in tax on that gain. Under Law 30-26, the maximum exposure on that same gain is $10,000 — a 60% reduction.
For sellers who have been sitting on appreciated inventory and watching the exit tax, the math just changed materially.
One caveat on corporate structures: The 10% rate is not a general corporate benefit. For legal entities SRLs and similar structures — it applies only where the company’s sole activity is holding real estate, and where those assets are not used for commercial activity. An operating company that happens to own property does not qualify. If you hold Dominican property through a company, which many foreign buyers do, this is the single provision worth reviewing with your accountant before your next transaction.
Two Capital Gains Exemptions Worth Understanding
In force since 18 June 2026
Alongside the rate cut, Law 30-26 created two full exemptions from capital gains tax on real estate. Both are meaningful in different ways.
The Primary Residence Rollover
If you sell your primary residence and reinvest the proceeds into another primary residence, the gain is fully exempt. The reinvestment window is six months from the date the transfer deed is formalised.
The relief is proportional: reinvest the full sale proceeds and the entire gain is exempt; reinvest part of it and the relief applies in proportion to the amount reinvested. The clock runs from formalisation of the transfer deed — not from when funds clear, which is a distinction worth tracking carefully in the DR closing process.
Practical application: This exemption is most relevant to buyers who are upgrading their primary residence in the DR — selling a condo to move into a villa, for example, or moving between markets within the DR. It creates a clean rollover structure that didn’t exist before.
The Over-65 Exemption
Individuals over 65 selling their primary residence are exempt outright — no reinvestment requirement, no ceiling, no partial calculation. The gain is simply not taxed.
For retirees and near-retirees who own Dominican property as part of a retirement strategy, this changes the exit analysis entirely. Combined with the IPI exemption that already existed for single-property owners over 65, the DR tax treatment of property held by retirees is now genuinely favorable.
Mortgage Registration Tax: Lower Closing Costs on the Horizon
2% now → 1% in fiscal year 2027 → repealed in fiscal year 2028
The 2% mortgage registration tax — charged on the registration and conservation of mortgages is being phased out. It drops to 1% for fiscal year 2027 and is repealed entirely from fiscal year 2028.
For buyers financing a purchase, this is a welcome reduction in closing costs. On a $300,000 mortgage, you’re currently paying $6,000 in mortgage registration tax. In 2027, that drops to $3,000. In 2028, it’s gone.
One important note: Some commentary in the sector has read the relevant article of Law 30-26 more broadly, interpreting it as applying to property transfer operations generally rather than mortgage registration alone. This interpretation would affect the 3% transfer tax, but that reading has not been confirmed by the DGII, and the 3% transfer tax remains on the books under Law 173-07. Do not plan around the 3% disappearing. If that interpretation is later confirmed by regulatory guidance, it would be a separate development worth tracking.
Rental Income Withholding: The Change That Costs Landlords
In force since 1 July 2026
This is the one provision in Law 30-26 that goes in the wrong direction for property owners.
Withholding on rental income paid to individual property owners increased from 10% to 15%. This applies to individual owners not, at least in clear terms, to legal entities, though there is interpretive uncertainty about the entity treatment that has not been fully resolved by the DGII.
What this means for the numbers: On a property generating $24,000 per year in gross rental income, the withholding obligation increases from $2,400 to $3,600 — an additional $1,200 per year that either reduces net cash flow or, if ultimately creditable against your full DR tax liability, changes your cash timing.
This change is worth factoring into any ROI analysis on new acquisitions. In our recent breakdown of what investors actually earn from Punta Cana rental properties, we discussed the gap between gross rental yield and net cash flow, the withholding increase widens that gap modestly, and any financial model should reflect the updated rate.
For buyers purchasing under a legal entity (SRL), the treatment remains unresolved. Watch for further DGII guidance.
Gift Tax on Family Transfers: From 27% to 3%
In force since 18 June 2026
This change attracted less attention than the capital gains rate but is, for many property owners, just as consequential.
The Dominican donation tax — applied to transfers of property between family members has been cut from 27% to 3% for transfers between:
- Direct-line relatives where the beneficiary is a descendant
- Spouses in the permitted cases
- Second-degree collateral relatives
For families holding Dominican real estate across generations, parents who want to transfer a vacation property to adult children, expats who own DR property and are planning their estates, the old 27% rate was a genuine barrier. It made legal gifting of property prohibitively expensive in many cases and pushed families toward informal workarounds with their own complications.
At 3%, family transfers become financially viable in a way they simply weren’t before. This is one of the most underreported provisions of Law 30-26 and, for estate planning purposes, one of the most valuable.
DGII Enforcement: The Tax Authority Has Teeth Now
Mixed effective dates
Law 30-26 wasn’t only about rate cuts — it also gave the DGII (the Dominican tax authority) substantially stronger enforcement tools. If you have any unresolved tax exposure in the Dominican Republic, this is the section to read carefully.
Statute of limitations extended. Unpaid property tax no longer ages out at three years. Failure to pay a determined debt suspends the limitations period. IPI and asset tax arrears now effectively run to approximately five years rather than three.
Late-payment surcharge increased. The late-payment surcharge is now 3% per month, capped at 100% of the tax owed. Effective 1 July 2026.
But there are prompt-payment discounts. If you voluntarily correct or settle, discounts on surcharges range from 90% (early resolution) down to 30% depending on timing. The amnesty is real and it’s generous.
Payment agreements available. Outstanding balances can be structured as installment agreements: 15% down, immediate payment of compensatory interest, a guarantee for the balance, and up to 12 monthly payments.
Tax amnesty runs until 31 December 2026. Outstanding balances, disputed assessments, and unfiled returns can be regularized with substantially reduced interest and surcharges. If you have any unresolved IPI arrears, unreported rental income, or pending assessments, the amnesty window is open for the rest of 2026. After 31 December, the standard (and now higher) surcharges apply in full.
For foreign buyers who have been less than fully compliant on IPI declarations or rental income withholding, which is more common than it should be — the amnesty is worth a conversation with a Dominican tax advisor before year-end.
CONFOTUR: Still in Place, But With More Scrutiny
In force since 18 June 2026
CONFOTUR — the tourism investment incentive framework under Law 158-01 that grants IPI exemptions, transfer tax exemptions, and other benefits to qualifying tourism developments — was not repealed by Law 30-26.
The benefits remain as they were for properties with active, granted CONFOTUR classification.
What changed is the oversight structure. The Ministry of Finance and Economy can now object to an applicant’s classification as a CONFOTUR beneficiary. Institutions administering incentive laws must submit cost-benefit analyses before new incentives are authorized.
What this means for buyers: CONFOTUR status is now more closely scrutinized at the authorization stage. For buyers purchasing in developments that are marketing CONFOTUR tax benefits, it’s more important than ever to confirm that the project’s classification is actually granted and current, not pending, not assumed, not in process. An ungranted CONFOTUR classification means you’re buying a property with anticipated tax benefits that may or may not materialize.
This isn’t a new due diligence requirement — it’s always been important, but the regulatory context makes it more pressing.
What Did Not Change
This matters as much as what did. A lot of speculation circulated before and after Law 30-26 was enacted, and some of it overstated the scope of the changes.
The 3% property transfer tax (ITI) is unchanged. The ITI under Law 173-07 remains at 3% of the higher of the sales price or the cadastral value. Buyers still pay this at closing.
The 1% annual IPI is unchanged. The IPI on combined real estate holdings above RD$10,695,494 (2026 threshold) continues at 1%. The filing structure, due dates (declaration in the first 60 days of the year; installments due 11 March and 11 September), and existing exemptions — for CONFOTUR properties, for single-property owners over 65, and the 50% reduction for qualifying foreign-source pensioners and rentistas — are all intact.
Foreign ownership rules are unchanged. There are no nationality restrictions on owning Dominican real estate. Foreign buyers have the same ownership rights as Dominican nationals. Law 30-26 did not alter this.
The inflation adjustment on capital gains calculation is unchanged. The mechanism for adjusting acquisition cost for inflation — one of the more taxpayer-friendly features of the Dominican capital gains system remains in place.
The Full Implementation Timeline
For reference, here’s exactly when each provision takes effect:
| Measure | Change | Effective |
|---|---|---|
| Capital gains tax, individuals | Flat 10% | 18 June 2026 |
| Primary residence rollover exemption | Full exemption | 18 June 2026 |
| Over-65 exemption | Full exemption | 18 June 2026 |
| Family donation/gift tax | 27% → 3% | 18 June 2026 |
| CONFOTUR oversight | Enhanced scrutiny | 18 June 2026 |
| Tax amnesty | Reduced surcharges | Until 31 Dec 2026 |
| Rental income withholding | 10% → 15% | 1 July 2026 |
| Late-payment surcharge | 3%/month (cap 100%) | 1 July 2026 |
| Mortgage registration tax | 2% → 1% | Fiscal year 2027 |
| Mortgage registration tax | Repealed | Fiscal year 2028 |
What This Means for Different Buyer Profiles
If you’re a seller with appreciated property
The capital gains change is directly in your favor. Run the numbers on what exit now looks like versus what it looked like in May 2026. For properties held through meaningful appreciation, the difference is substantial. If the over-65 exemption applies to you, your exit is now tax-free on capital gains. If you’re reinvesting in another primary residence, you have a clean rollover structure.
If you’re a buyer closing this year or next
The mortgage registration tax reduction doesn’t fully kick in until 2027, but it’s a relevant factor for transactions being structured now with future financing in mind. The 3% transfer tax and IPI remain unchanged — build them into your closing cost assumptions as before.
If you’re an investor with rental income
The 15% withholding rate is in effect now. If you have a management company or property manager remitting rent on your behalf, confirm they’ve updated their withholding calculation as of 1 July 2026. If you’re modeling a new acquisition, update your net cash flow assumptions accordingly.
If you own DR property through a company (SRL)
The 10% capital gains rate may not apply to your structure unless your company’s sole activity is holding that real estate for non-commercial purposes. This is worth a specific review with a Dominican tax advisor before your next transaction.
If you own property you plan to pass to family members
The gift tax reduction from 27% to 3% transforms what family transfers cost. If intergenerational transfer of Dominican property is part of your planning, the window to act under the new rate is now open.
If you have any outstanding tax exposure
The amnesty window closes 31 December 2026. If there are unresolved IPI arrears, unreported rental income, or pending assessments, now is the time to regularize. The DGII’s new enforcement tools — extended limitations periods, higher late-payment surcharges — make the cost of inaction higher after year-end.
The Bottom Line
Law 30-26 is net-positive for the Dominican Republic real estate market. The capital gains cut removes a long-standing drag on transaction velocity, sellers who were sitting on appreciated properties because the exit tax made selling unattractive now face materially different math. The family transfer reduction makes estate planning with DR property viable in a way it wasn’t before.
The rental income withholding increase is a real cost for landlords, but it’s a modest offset against a capital gains improvement that’s significantly larger in dollar terms for most investors.
For anyone active in the DR market — as a current owner, a seller in process, or a buyer evaluating their first acquisition, understanding Law 30-26 is table stakes right now. The tax landscape changed on 18 June 2026, and any analysis based on pre-reform numbers needs to be updated.
This is also a market where getting the structure right matters. The provisions around corporate structures, CONFOTUR verification, and the amnesty window all require specific advice tailored to your position — not just a general understanding of the headline changes.
Ready to Run the Numbers Under the New Tax Rules?
Law 30-26 doesn’t change the fundamentals of why Punta Cana is one of the strongest foreign buyer markets in the Caribbean — but it does change the exit math, the closing cost structure, and the estate planning picture.
If you want to understand how the new rules apply to a specific property or investment scenario, reach out directly — that’s exactly the kind of conversation worth having before you close.
For a complete walkthrough of the DR acquisition process — legal structure, due diligence, closing costs, and investment framework — our Punta Cana Real Estate Buyer’s Guide covers everything from first inquiry to signed title deed.
And when you’re ready to look at specific properties, browse current listings — we’ll help you identify which acquisitions make the best sense under the updated tax framework.
Alex Bucher is a licensed real estate broker with Coldwell Banker Prime Realty, based in Punta Cana. He has spent 9 years working exclusively in the Dominican Republic market, specializing in foreign buyer transactions across Cap Cana, Bávaro, and the eastern Dominican coast. This article is for informational purposes and does not constitute tax or legal advice. Consult a qualified Dominican tax advisor for guidance specific to your situation.
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