"Is your project CONFOTUR?" is the first question almost every foreign buyer asks in the Dominican Republic. It is often the wrong question. There are two distinct tax regimes, written for opposite audiences, and picking the wrong one costs more than having none at all. Here is the comparison, with 2026 figures.
The confusion comes from the fact that both regimes reduce property taxes. Their purpose, however, has nothing in common.
CONFOTUR — Law 158-01 of 9 October 2001 — is a tourism development statute. The State forgoes tax revenue to attract capital, often foreign, into areas it wants developed. The intended beneficiary is the investor.
Bajo Costo — Law 189-11 of 16 July 2011 — is a housing policy statute. The State forgoes revenue to put a first home within reach of Dominican households on modest incomes. The intended beneficiary is the family that needs housing.
Everything else follows from that difference in intent.
| Criterion | Bajo Costo (Law 189-11) | CONFOTUR (Law 158-01) |
|---|---|---|
| Purpose | Access to a first home | Tourism development |
| Target | First-time buyer household | Investor, including foreign |
| Price ceiling | RD$5,450,851.12 (2026), per unit | No price ceiling |
| 3% transfer tax | Exempt (via fideicomiso, within the ceiling) | Exempt |
| IPI (1%/yr) | Moot in practice: the home stays under the RD$10,695,494 threshold | Exempt for up to 15 years |
| ITBIS | Exempt on first-home mortgage interest + developer relief | Not addressed by this mechanism |
| Duration | Tied to the acquisition | Up to 15 years of operation |
| Key condition | First-time buyer + purchase through a trust | CONFOTUR classification resolution |
| Location | Nationwide | Recognised tourism zones |
| Authority | DGII · MIVED / MIVHED | MITUR · Consejo de Fomento Turístico |
The regime is granted at project level, not buyer level. The developer files with the Ministry of Tourism: plans, feasibility study, permits, environmental impact study. The Consejo de Fomento Turístico reviews and then issues — or withholds — a classification resolution.
Once that resolution exists, buyers in the project receive:
That is where CONFOTUR's real value sits: on a high-value asset, IPI compounds year after year, and removing it for fifteen years materially changes the net yield of a rental property.
CONFOTUR is never to be assumed. Ask for the copy of the final classification resolution issued by the Consejo de Fomento Turístico, with its number. A project "under application" or "eligible" confers no rights until the resolution is issued.
Here the regime depends on a price and a structure, not on a geographic zone.
A unit qualifies if its price does not exceed RD$5,450,851.12 in 2026 — set by DGII resolution DDG-AR1-2026-00001 and revalued each January for inflation. The ceiling is assessed unit by unit, never on average, and no floor-area limit applies.
For a first-time buyer going through a low-cost housing fideicomiso, the 3% transfer tax is exempt within that ceiling — roughly RD$162,000 saved on a unit at RD$5.4 million.
As for IPI, it has no practical impact: with a general exemption threshold of RD$10,695,494 for individuals in 2026, a home at RD$5.4 million sits well below it. This is not a special exemption — the ordinary threshold is simply enough.
The trust also provides protection CONFOTUR does not: funds paid sit in an autonomous patrimony, beyond the reach of the developer's creditors in the event of failure.
No — and not merely for legal reasons: the two regimes are economically incompatible.
CONFOTUR requires tourism classification in a recognised zone. Bajo Costo requires a price below RD$5.45 million (about US$90,000) for a first-home purchase. A classified tourism project selling every unit below US$90,000 in a tourism zone has, in practice, no viable business model.
A developer therefore chooses a positioning, and that choice determines the regime — not the other way round.
Bajo Costo, without hesitation, if the property falls under the ceiling. The saving is immediate, the trust protection is real, and Dominican banks run dedicated mortgage lines.
CONFOTUR. The fifteen-year IPI exemption compounds on a high-value asset, and the product — tourism zone, short-term rental — matches the demand. The bajo costo regime is built around residential first-time purchase and does not target this profile.
This requires a trade-off. CONFOTUR improves net yield but implies a higher entry ticket and exposure to the tourism cycle. A conventional residential asset in a dense urban area offers steadier rental demand with no tax advantage. The answer depends on holding horizon and risk tolerance.
Then the only right decision is to have the file checked before signing. Both regimes rest on specific documents: a classification resolution for CONFOTUR, project qualification and a trust contract for Bajo Costo.
Our projects illustrate both logics:
Two projects, two regimes, two buyers. Comparing them on price per square metre alone would make no sense.
The principles get clearer with orders of magnitude. The calculations below are deliberately simplified — they isolate the tax effect, excluding notary fees, condominium charges and the cost of credit.
A first-time buyer household purchases a qualifying unit through a fideicomiso.
The advantage is immediate, concentrated on the transaction, and it disappears entirely if the purchase happens outside a trust.
An investor acquires a property in a classified tourism zone.
The logic is the reverse of Case A: the benefit is modest at entry but repeats every year. This is why CONFOTUR rewards long holding, while Bajo Costo rewards acquisition.
These figures are illustrative. IPI depends on the value assessed by the DGII and on the taxpayer's entire real estate holdings, not on the acquired property alone.
A point sales pitches almost systematically omit: these exemptions are targeted, and an acquisition budget contains other items that remain payable.
This last point is the one North American buyers most often overlook: a Dominican exemption never neutralises a Canadian or US tax obligation.
The law provides for an exemption of up to 15 years. The effective duration depends on the project and its classification resolution. Verify it on the document itself, not on a sales brochure.
No nationality restriction applies to property ownership in the Dominican Republic. But bajo costo benefits attach to residential first-time purchase and household eligibility conditions: a non-resident investor generally falls outside the target.
Ordinary rules resume: 1% per year on the portion of real estate holdings above the exempt threshold, which is RD$10,695,494 for an individual in 2026.
It is decisive for Bajo Costo: without a trust, the first-home transfer exemption does not apply. For CONFOTUR, trust structuring is a common and protective market practice, but it is not what triggers the tax benefit — the classification resolution is.
Do not ask "is it CONFOTUR?". Ask first what you are buying and why. A first home to live in and a rental asset in a tourism zone do not fall under the same law, do not bear the same taxes and are not protected the same way.
The amounts cited reflect the public resolutions in force in 2026 and are provided as general information; they do not constitute individual tax advice.