If you own property in the Dominican Republic, you may have heard of IPI. But, what is IPI? IPI stands for Real Estate Asset Tax, and it is an annual tax with a rate of 1% applied to the total value of real estate properties registered by individuals.
To determine if you have to pay this tax or not, we need to look at the exempt amount. This is the amount of money that is not subject to the tax. The exempt amount is reviewed and changed each year. For the year 2022, it is RD$8,829,763.30. In other words, properties with a total value below this amount are exempt from this tax.
Types of properties exempt from IPI
Now that we know the exempt amount, we can see what types of properties are exempt from IPI. The first type of exemption is related to the use of the property. Properties used for agriculture, livestock farming, forestry, or fishing are exempt from IPI.
The second type of exemption is related to the location of the property. Properties located in urban areas with a high level of social distress are exempt from IPI. An example of this would be a property located in a marginalized neighborhood. The third and final type of exemption is related to owner-occupied residences. Owner-occupied residences are exempt from IPI as long as they are the owner’s primary residence.
IPI is an annual tax applied to real estate properties registered by individuals in the Dominican Republic. The rate of this tax is 1%, but there is an exempt amount that changes each year. For 2022, the exempt amount is RD$8,829,763.30. This means that any property valued at less than this amount is exempt from paying IPI. There are also three types of exemptions: properties used for agriculture, livestock farming, forestry, or fishing; properties located in urban areas with a high level of social distress; and owner-occupied residences (as long as they are the primary residence).
