CONFOTUR Law: How New Construction Buyers Get Long Tax Exemptions

CONFOTUR Law: How New Construction Buyers Get Long Tax Exemptions

If you're thinking about buying a new construction property in the Dominican Republic, there's a law that could save you thousands of dollars in taxes — but most foreign buyers don't even know it exists.

It's called the CONFOTUR Law (Reliable Tourism). And if you buy in the right project, you can get a tax exemption that lasts up to 15 years.

Here I explain exactly what it is, how it works, and what you need to verify before signing.

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What Is the CONFOTUR Law

Law 158-01, known as CONFOTUR, is a tourism incentive law from the Dominican government. Its goal is to boost investment in tourism projects — hotels, tourism residential complexes, vacation resorts — by granting significant tax exemptions to those who invest in approved projects.

What you get as a buyer:

• Exemption from the Real Estate Transfer Tax (ITBI) on the first purchase
• Exemption from Income Tax (ISR) on project income during the exemption period
• Exemption from import taxes on construction materials (benefit for developer, which translates to lower cost)
• Exemption from Real Estate Property Tax (IPI) for the first years

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How Long the Exemption Lasts

It depends on the type of project:

Important: The exemption runs from the date the project is approved by CONFOTUR, not from when you buy. If you buy a project with 8 years of exemption remaining, those 8 years are yours — they don't restart.

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What Projects Qualify

Not every new construction project qualifies. It must meet specific criteria:

1. Tourism destination: Must be located in a tourism area designated by the government (Punta Cana, Bávaro, Bayahibe, Las Terrenas, among others)
2. Tourism use: The project must be tourism-oriented — not traditional residential
3. Formal approval: The developer must have obtained CONFOTUR approval before starting construction
4. Compliance with standards: Must meet infrastructure and services requirements

Red flag: If an agent tells you "this project has CONFOTUR" but can't show you the approval certificate, be suspicious. Approval is public and must be verifiable.

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What You Must Verify Before Buying

1. Request the CONFOTUR Approval Certificate

The developer must have a certificate issued by the Directorate General for Investment Promotion (DGFI) or the Export and Investment Center of the Dominican Republic (CEI-RD). Ask for a copy and verify:

• That the project name matches exactly
• That the approval date is current
• That the benefits listed include tax exemption for buyers

2. Confirm That the Exemption Is Transferable

In some cases, the exemption applies only to the first buyer. If you plan to resell the property, confirm whether the tax benefit transfers to the next owner or is lost with the sale.

3. Calculate the Real Savings

The ITBI exemption saves approximately 3% of the property value. The ISR exemption saves 27% of your gross income during the period. For a USD $200,000 property with 8% annual income, this could represent thousands of dollars saved.

4. Review Your Purchase Contract

The contract must explicitly reference CONFOTUR approval and the applicable tax benefits. If it's not mentioned, demand that it be included as a clause.

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Common Mistakes Foreign Buyers Make

Mistake #1: Assuming "new construction" = CONFOTUR Not all new projects have CONFOTUR approval. Only those that meet tourism criteria and were formally approved.

Mistake #2: Buying After the Exemption Expires If you buy a project with only 2 years of exemption remaining, the tax benefit is minimal. Ask how many years are left.

Mistake #3: Not Verifying Approval Directly Never take the seller's word as a guarantee. Request the official certificate and, if you have doubts, contact CEI-RD directly.

Mistake #4: Ignoring Post-Exemption Obligations When the exemption period ends, the property returns to normal tax treatment. Make sure you understand what taxes you'll pay afterward and how much they'll cost.

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Can Toca Timbre Help You Find CONFOTUR Projects?

Toca Timbre isn't a tax advisor, but we do facilitate something critical: access to verified agents who work with formal developers.

Agents on our platform have active licenses and access to approved projects. When you search for a new construction property on Toca Timbre, you know that:

• The agent really exists
• They have a professional license
• They can guide you on legal documentation, including CONFOTUR certifications

What we don't do: provide tax advice, guarantee exemptions, or replace your lawyer. What we do do: connect you with real professionals who can guide you.

Explore new construction properties on Toca Timbre

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Summary: CONFOTUR Law Checklist

The CONFOTUR Law is a real opportunity. But it only benefits those who do their homework before buying.

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Want to know more about real estate taxes in the DR? Read our article on the real costs of being a property owner.