Understanding the CONFOTUR Tax Exemption at Secret Garden

Yes, Secret Garden is a CONFOTUR-qualified project, which provides significant tax benefits for eligible first-time buyers from the developer. This includes an exemption from the 3% property transfer tax at closing and a multi-year exemption from the 1% annual property tax (IPI), making ownership more cost-effective from day one.

What is CONFOTUR and how does it apply to Secret Garden?

CONFOTUR is the common name for a Dominican law, number 158-01, enacted in 2001 to promote tourism development by providing tax incentives to qualifying projects. By encouraging investment in new construction in designated tourist zones like Bávaro-Punta Cana, the law has been a cornerstone of the region's growth.

For a development to qualify, it must go through an approval process with the Dominican government's Tourism Promotion Council (CONFOTUR). We are pleased to confirm that Secret Garden has met these requirements and is officially a CONFOTUR-approved project. This status is a key advantage for our buyers, as the tax benefits are passed directly to the first purchasers of our 327 residences. It's one of the reasons that, with a delivery date of mid-2027, the project is already 89% sold.

How does the 3% property transfer tax exemption work?

When purchasing real estate in the Dominican Republic, a buyer is typically responsible for a 3% property transfer tax, based on the value of the property. This is a one-time tax paid at the time of closing to register the title in the new owner's name.

However, as a buyer at a CONFOTUR-qualified project, you are exempt from this 3% tax. This benefit applies only to the first sale from the developer (Gesproin Group) to the initial buyer. This represents a significant upfront cost saving, and the exemption is handled by your attorney as part of the closing process. This benefit is not available on resales, making the purchase of a new residence at Secret Garden particularly attractive.

What does the annual property tax (IPI) exemption mean?

The Dominican Republic levies an annual property tax known as IPI (Impuesto al Patrimonio Inmobiliario). This is a 1% tax, but it is crucial to understand that it is not charged on the entire value of the property. The IPI is only levied on the value of a property above an annually-adjusted exemption threshold set by the government. Most properties are therefore taxed on only a portion of their total worth.

CONFOTUR provides a powerful additional benefit here. The law grants a fifteen-year IPI exemption to qualifying projects like Secret Garden. It is important to note that the fifteen-year term is what the law grants to the project itself. Your attorney will advise on how this exemption applies to your specific unit and its term, and will ensure it is correctly filed and recorded on your title. That long-term reduction in holding costs lowers what the residence costs to hold each year. It is a saving on the cost of owning the asset, and it is a separate matter from how rental earnings are assessed, which the next section takes up.

How do CONFOTUR's exemptions sit alongside the taxes on rental income?

Buyers often assume that a CONFOTUR classification makes rental earnings tax-free, and it is worth taking that apart carefully, particularly if you plan to place your residence in our in-house Gesproin Rentals program. The exemptions the law is documented to grant are the 3% property transfer tax and the 1% annual property tax (IPI). Both of those are levied on the property. What the rent earns is dealt with elsewhere in the Dominican tax code, and nothing we have been able to source rules on where the two touch. So this page tells you what is on the record and stops there; the position for your own unit is one to take from your attorney.

What is charged on the rent is clear enough to plan around. For non-resident owners, rental income is generally subject to a 27% withholding tax on gross rents, with no deductions for expenses. Short-term tourist stays are separately subject to an 18% value-added tax known as ITBIS, and the owner, not the booking platform, accounts for it. Both figures belong in any financial projection you build, and you should not assume that an IPI exemption reduces either of them. Rates move, so check the current figures and go over the whole picture of what you will owe with a Dominican tax professional.

How do I ensure I receive the CONFOTUR benefits for my property?

Receiving these valuable tax exemptions is not automatic; it is a legal process that must be completed for your specific property. This is a standard procedure for new, qualifying developments and will be managed by the Dominican attorney you retain to handle your purchase.

The process ensures the exemptions are formally tied to your property's title, securing your benefits for the duration of the term. Here are the key steps your legal counsel will take:

1. Verify Eligibility
   Your attorney will first confirm Secret Garden's CONFOTUR status and your eligibility as the first purchaser of the unit from the developer, Gesproin Group.
2. File the Application
   During the closing process, your attorney will prepare and file the necessary application with the relevant government agencies to have the tax exemptions formally applied to your specific residence.
3. Register on Title
   Once approved, the exemption is officially recorded on your property's title deed. This provides legal certainty and ensures the benefits are recognized by the tax authorities (DGII).

Why is CONFOTUR status important for my long-term investment?

The direct tax savings are clear, but the CONFOTUR designation for Secret Garden offers broader investment advantages. First, it acts as a mark of quality. A project that has successfully navigated the CONFOTUR approval process is recognized as a significant contributor to the Dominican Republic's tourism economy. This official endorsement provides an extra layer of confidence in the project's standing.

Second, the reduced holding costs during the IPI exemption period lower the annual cost of owning the residence. That is a saving on the property's outgoings. It is not a change to the tax charged on what the Gesproin Rentals program earns, which sits under separate rules and should be reviewed with a Dominican tax professional. Finally, while the tax benefits themselves are not transferable to a second owner, the fact that the property benefited from them initially makes it a more attractive and well-positioned asset within the highly competitive Bávaro-Punta Cana market.

1. Before you buy Confirm the project's CONFOTUR status The benefit attaches to the project, not to the buyer, and it is not automatic — it must be filed and recorded on the title.
2. At purchase A first acquisition from the developer Law 158-01 reserves the benefit for first buyers from the developer; a resale is excluded (Art. 4, Par. IV).
3. At transfer The 3% transfer tax This is the tax the exemption is written to remove at the moment title changes hands.
4. Completion of construction The exemption term begins Article 7 starts the clock at completion of construction, not on the date you sign.
5. Fifteen years The law's exemption period Article 7 provides a fifteen-year exemption for qualifying projects; how it applies to a particular unit is a question for your attorney.

Common questions

Is the CONFOTUR exemption transferable if I sell my condo?

No, the tax benefits under Law 158-01 are exclusively for the first buyer purchasing directly from the developer. The exemptions do not transfer to subsequent owners upon resale, which is a key reason to purchase a new residence at a qualifying project like Secret Garden.

Does the exemption cover all taxes related to my property?

On the record, CONFOTUR covers the 3% property transfer tax and the 1% annual property tax (IPI). Both are levied on the property. What the rent earns, and other activity connected with the residence, fall elsewhere in the Dominican tax code, and nothing we have been able to source rules on where CONFOTUR touches them. Treat the two as separate questions and take your own position from a Dominican attorney and tax advisor.

How long does the annual property tax (IPI) exemption last?

The law provides a fifteen-year IPI exemption for qualifying tourism projects. As a buyer, the specific term and application of this benefit to your unit will be confirmed and registered on your title by your attorney during the closing process.