When the CONFOTUR exemption lapses, your Dominican villa reverts to standard IPI and transfer rules. Here's how to model the step-up in carrying costs before you sell, refinance, or hold.
When the 15-year CONFOTUR exemption ends, your Dominican villa stops being tax-exempt and reverts to the standard rules: 1% annual IPI on value above the exemption threshold, and the normal 3% transfer tax applies to any future sale. The property itself doesn't change — your carrying costs do. If you plan to hold long, model that step-up now, not in year 14.
Most CONFOTUR coverage stops at the benefits. This piece starts where that one ends: the day the clock runs out.
The Short Version
- The CONFOTUR exemption runs up to 15 years from completion of the project's works — not from your purchase or delivery date.
- When it lapses, annual IPI (1% above the exemption threshold) and the standard 3% transfer tax on resale revert to normal.
- The exemption applies only to the first buyer from the developer — it never transfers to a resale buyer, so a sale already triggers normal tax regardless of timing.
- A long-hold owner should model the year-16 carrying-cost step-up well in advance, especially if a sale or refinance is on the horizon.
- CONFOTUR covers property and transfer tax; filing obligations and rental-income tax (for self-built villas) continue throughout — exemption is not the same as nothing to file.
When Does the CONFOTUR Clock Actually Start?
The 15-year window counts from completion of the project's construction and equipping works — not from the day you sign or take delivery. This matters because it fixes the expiry date for the whole project, not per-buyer.
A common misread is that each buyer gets "15 years from my purchase." That's wrong, and it changes your planning horizon. If you buy into a project partway through its sales cycle, your personal tax-free runway is the remainder of the project-wide window, not a fresh 15 years. Our hub guide, CONFOTUR explained for Dominican Republic investment, walks through how Law 158-01 structures the benefit; for the timing mechanics specifically, see when the exemption clock starts for pre-construction buyers.
For Sienna, the benefit sits under a provisional classification (Resolution 203-2024, extended by Resolución 61-2026); the definitive classification was filed in July 2026 and is pending. The benefits take effect with that definitive resolution. So the first thing to pin down before any year-16 model is the actual start date of the works, which anchors everything that follows.
What Reverts to Normal When the Exemption Lapses?
Two taxes come back: annual property tax (IPI) and the transfer tax on any sale. Here's the before-and-after.
During the exemption, a lot plus a Sienna-built villa carries 0% IPI and 0% transfer tax at closing for the first buyer. After it lapses, both revert to the Dominican standard rates administered by the tax authority, the DGII.
| Item | During CONFOTUR window | After year 15 (reverted) |
|---|---|---|
| Annual property tax (IPI) | 0% | 1% on value above the exemption threshold |
| Transfer tax (on a sale) | 0% for first buyer | 3% of assessed value, paid by buyer |
| Rental-income tax (developer-built villa) | Relief applies | Standard income tax on net rental |
| Capital gains on sale | Not exempt (never was) | Standard capital-gains treatment |
The IPI exemption threshold is set in Dominican pesos and indexed periodically by the DGII, so the exact peso figure shifts over time. The principle doesn't: once reverted, you pay 1% annually on the portion of your property's registered value above that threshold. For a villa in the Sienna price range ($200,100 to $926,550 for the build alone), that's a real line item to budget. Plan for it as a fixed annual carrying cost from year 16 on.
How Do You Model the Step-Up in Carrying Costs?
Treat year 16 as a scheduled cost event and build it into your hold model from day one. The step-up is predictable, which makes it manageable.
Build a simple three-line forecast
For a long-hold position, project three things forward to your expected exit year:
- Registered value — your purchase price, adjusted for the Las Terrenas appreciation trend (Sienna models 8% projected annually; historical Las Terrenas appreciation has run 8–12%).
- Annual IPI from year 16 — 1% of value above the exemption threshold, recalculated as the value grows.
- Transfer tax at exit — borne by your buyer, but it affects your net sale price and how you price the villa.
The honest answer is that even post-exemption, DR carrying costs stay low by Caribbean and North American standards. Florida owners pay 1–2% property tax every year from year one with no equivalent holiday. A reverted DR villa pays 1% only after up to 15 tax-free years. The step-up is real, but the baseline you return to is still competitive. To pressure-test your own numbers, the Sienna ROI tools let you run appreciation and yield assumptions across a full hold period.
Across a 15-year hold, the exemption is designed to save a first buyer $50,000+ in property and transfer tax on a lot plus Sienna-built villa. The planning task for year 16 isn't to recover that — it's to make sure the reverted 1% doesn't surprise you.
Does the Exemption Matter If I Sell Before Year 15?
No — and this is the point most investors miss. The CONFOTUR benefit belongs to the first buyer from the developer and does not transfer on resale.
The moment you sell, your buyer pays the normal 3% transfer tax, regardless of how many years are left on the project window. Capital gains were never exempt either. So if your strategy is a mid-hold flip, CONFOTUR shapes your carrying economics while you own, not your exit economics when you sell. For the full mechanics of what a resale buyer does and doesn't inherit, see CONFOTUR at resale.
This cuts against the idea that approaching year 15 is a "sell before it expires" deadline. There's no cliff for you as the seller — your buyer always pays standard transfer tax. The real decision is whether you keep holding into the reverted-cost period or exit while you're still inside the exempt window and carrying costs are zero.
What About Refinancing Near the End of the Window?
Refinancing doesn't restart the CONFOTUR clock, and it doesn't trigger the transfer tax — that applies to ownership changes, not re-mortgaging. But it does interact with your post-exemption cost base.
If you refinance to pull equity in year 13 or 14, you're adding debt service on top of an about-to-arrive 1% IPI. Model both together. A villa that cash-flows comfortably on rental yields of 6–9% annually during the exempt period needs re-checking once IPI and any new debt service both land. The question to answer before signing anything: does your net rental still clear your full carrying stack — HOA, management (20% of rental income), IPI from year 16, and financing — with margin? If the answer is thin, the exempt years are the time to pay down, not lever up. Weigh the trade-offs in financing a villa versus paying cash.
Frequently Asked Questions
Does CONFOTUR last 15 years from when I buy?
No. The exemption runs up to 15 years from completion of the project's construction and equipping works, not from your purchase or delivery. If you buy later in the sales cycle, your personal tax-free period is the remaining portion of the project-wide window.
What is the IPI rate after the exemption ends?
The standard Dominican property tax (IPI) is 1% annually on the portion of registered value above the exemption threshold, which the DGII sets in pesos and adjusts periodically. Below the threshold, no IPI is due.
Do CONFOTUR benefits transfer to a buyer if I sell?
No. The exemption applies only to the first buyer from the developer. A resale buyer pays the normal 3% transfer tax, and capital gains are not exempt. The benefit does not follow the villa.
Does the exemption cover rental income?
Rental-income tax relief applies to developer-built villas during the window. A buyer who builds their own villa outside the developer's construction contract is exempt on the land value only and stays taxable on rental income throughout. Filing obligations continue in both cases.
Is a DR villa still a good hold after CONFOTUR expires?
Often, yes. Even reverted to 1% IPI, DR carrying costs stay below the 1–2% annual property tax Florida owners pay from year one. The step-up is predictable and modelable, not a reason to force an exit.
The Bottom Line
CONFOTUR gives a first buyer up to 15 tax-free years from completion of the works, then the villa reverts to standard 1% IPI and normal 3% transfer tax on any future sale. Because the benefit never transfers on resale, your real year-16 decision is whether to keep holding into reverted costs or exit while you're still exempt. Run your own numbers in a no-pressure consultation with the Sienna team before you commit to a hold horizon.
This article provides general information about property in the Dominican Republic and is not personal financial, legal, or tax advice. Figures such as CONFOTUR benefits, taxes, and returns depend on your circumstances and can change — confirm specifics with a licensed Dominican attorney, tax advisor, or the relevant authority before making a decision.
Have questions about this?
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Written by
Sienna Terrenas Editorial Team
The Sienna Terrenas editorial team covers buying, owning, and living in Las Terrenas, Dominican Republic — from the purchase process and CONFOTUR tax strategy to villa construction and Caribbean community life, drawing on the team's on-the-ground experience in the area. Meet the Sienna Terrenas team.
