A decision-stage FAQ on how CONFOTUR works for a rented Sienna villa: the 3% transfer tax, the 1% annual IPI, what provisional status covers, and what rental income tax it doesn't.
If you buy a villa that Sienna builds and delivers, the CONFOTUR exemption removes the 3% transfer tax at closing and the 1% annual property tax (IPI) for 15 years — on the lot and the villa together. What it does not touch is the income tax you owe on the rent that villa earns. Those are two different taxes, and keeping them straight is the whole game when you model yield.
The Short Version
- CONFOTUR exempts the 3% transfer tax and 15 years of 1% IPI on a lot + Sienna-built villa — worth $50,000+ over the period.
- The exemption applies to the asset whether you live in it or rent it out. Renting does not disqualify you.
- Rental income is still taxable. CONFOTUR is a property-tax and transfer-tax benefit, not an income-tax holiday.
- Sienna holds provisional active status under Resolution 203-2024 — not final approval. Verify status before you sign.
- A self-built villa (outside Sienna's construction contract) is exempt on the land value only.
Does CONFOTUR still apply if I rent the villa instead of living in it?
Yes. The exemption attaches to the qualifying property, not to how you use it. Whether the villa sits empty, hosts your family, or runs on the rental program all year, the 3% transfer tax stays waived at closing and the 1% annual IPI stays at zero for 15 years.
This matters because CONFOTUR — Law 158-01 — exists precisely to pull foreign capital into tourism-generating real estate. A villa earning nightly rentals is exactly the kind of asset the law was written to reward. Renting it out is not a loophole you're exploiting; it's the intended use. For the full mechanics of how the program works across the Dominican Republic, our CONFOTUR explained guide for Dominican Republic investment walks through the law end to end.
The practical effect on your model: the 1% IPI you'd otherwise pay annually on a villa comfortably into six figures becomes a line that reads zero for a decade and a half.
Which taxes does CONFOTUR actually waive on a rented villa?
Two, and only two: the transfer tax at purchase and the annual property tax. Here's how each behaves on a Sienna-built villa you intend to rent.
The 3% transfer tax at closing
Normally, transferring Dominican title costs 3% of the property's assessed value, paid to the tax authority, DGII, before your deed registers. On a CONFOTUR property that Sienna builds and delivers, that line is zero. On a villa in Sienna's range — villas run $200,100 to $926,550 before the lot — that single waiver can save tens of thousands at the table.
The 1% annual property tax (IPI)
IPI is the Dominican equivalent of an annual property tax, assessed at 1% on value above the exemption threshold. Across a 15-year hold, that's the bulk of your CONFOTUR savings — the compounding yearly cost that simply never appears. Combined with the transfer waiver, this is where the $50,000+ figure comes from.
| Tax | Standard rate | On a CONFOTUR Sienna-built villa |
|---|---|---|
| Transfer tax (at closing) | 3% of value | 0% |
| Annual property tax (IPI) | 1% above threshold | 0% for 15 years |
| Rental income tax | Applies | Still applies |
Is my rental income tax-free under CONFOTUR?
No — and this is the single most common misread. CONFOTUR covers property taxes, not income taxes. The rent your villa earns is taxable in the Dominican Republic regardless of the exemption on the building itself.
Dominican rental income is taxed on net profit after allowable deductions — management fees, maintenance, depreciation, and other operating costs come off the top before tax applies. You report through DGII, and a foreign owner typically operates through a structure the legal team sets up at purchase. For a full breakdown of what's deductible and how foreign owners file, see our Dominican Republic rental income tax guide.
CONFOTUR is a property-tax and transfer-tax benefit. It is not an income-tax holiday. Model your rental yield assuming income tax applies, and treat the IPI and transfer savings as separate line items.
What this means for your projection: when you run a 6-9% rental yield at Sienna, that yield is calculated on income you'll still owe tax on — but your carrying cost is lighter because the 1% IPI is gone. The two effects stack, but they're not the same lever.
How much does the exemption add to my return?
On a lot + Sienna-built villa, CONFOTUR adds an estimated 2-3% to your effective annual return — not through higher rent, but through lower cost. Zero IPI and zero transfer tax mean more of your gross yield survives to the bottom line.
Layer that onto the fundamentals: 6-9% rental yields, roughly 8% projected annual appreciation, and the 20% below-market pre-construction pricing that defines Sienna's entry point. The Sienna ROI projections show a 3BR villa modeling up to 16.1% total annual return when yield, appreciation, and the CONFOTUR effect combine. For a long-hold view of how the numbers behave year by year, our 10-year CONFOTUR villa cash-flow model runs the full timeline.
The honest framing: CONFOTUR doesn't make a weak asset strong. It makes a strong asset — ocean-view, in an established rental market, 10 minutes from Las Terrenas' beaches — hold on to more of what it earns.
What's the catch with "provisional" status?
The catch is a word, and it matters. Sienna holds provisional active status under Resolution 203-2024 — not final, definitive approval. Provisional status is the formal government recognition that a project qualifies and is in the pipeline; definitive approval follows through the standard ratification process.
For a buyer, this is normal for pre-construction. But you should verify it rather than take it on faith. Before signing, confirm the resolution number, check the project's standing, and have your legal counsel walk you through where the file sits. The exemptions themselves are defined in Law 158-01's beneficios under MITUR's CONFOTUR office. Our guide on verifying CONFOTUR status before you sign explains exactly what provisional versus definitive means and what questions to ask.
One more boundary worth stating plainly: if you buy a lot and build your own villa outside Sienna's construction contract, you're exempt on the land value only — the 3% transfer and 1% IPI on the land. The self-built villa and its rental income are not covered.
Frequently Asked Questions
Does renting my villa jeopardize the CONFOTUR exemption?
No. The exemption attaches to the qualifying property, not to your personal use of it. A villa on the rental program keeps its 0% transfer tax and 15 years of 0% IPI exactly as a personal residence would.
Do I still need to file taxes if I owe no property tax?
Yes. CONFOTUR waives property tax and transfer tax, but you still report and pay income tax on rental earnings through DGII. Keeping clean books — ideally through Sienna's property management, which handles rental accounting — keeps that filing straightforward.
Does the 15-year clock start at purchase or at completion?
Under Law 158-01 as amended by Law 195-13, the exemption runs 15 years from the completion of the project's construction, not from your purchase date. Because timing affects how many rental years fall inside the window, our CONFOTUR timing guide for pre-construction buyers covers when the clock starts for an off-plan purchase.
Can a future buyer inherit my remaining exemption when I sell?
Not as a rule. Law 195-13 limits the exemptions to buyers who invest directly with the developer and excludes later transfers to third parties, so plan your resale assuming the buyer pays standard taxes. Our guide to what a buyer inherits at a CONFOTUR resale explains the details.
Is Starlink or local wireless enough to run a rental here?
Yes. Sienna's lots are served by high-speed satellite (Starlink) or a local wireless provider, which is what guests and remote-working renters rely on — there is no fibre run to the hillside lots, though fibre exists in Las Terrenas town.
The Bottom Line
CONFOTUR removes the 3% transfer tax and 15 years of 1% IPI on a Sienna-built villa whether you live in it or rent it — but your rental income stays taxable, so model those separately. On a sustainable, ocean-view villa with 6-9% yields, that cost relief adds a real 2-3% to effective return. To see how the exemption works against a specific lot and floor plan, book a Discovery Tour in Las Terrenas and run the numbers with our team on the ground.
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.
Stay in the loop
Have questions about this?
Talk to our sales team directly — we'll answer on WhatsApp or by phone.
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.
