Property taxes

Do you pay property taxes on bare land? My husband has a plot and said he doesn't pay anything. We are looking at buying another and was wondering how that works?

My understanding is that you pay tax on each property owned. If you own them in your name and not a corporation then the the first $150,000 (USD) of assesed value is not taxed or is exempt from property tax. All value above that amount is taxed. If the property is owned by a corporation then then taxes are owed on the entire assesed value. Remember assesed value is usually much less then market value and is determined by the government land office.

Bob K

Bob K said:

My understanding is that you pay tax on each property owned. If you own them in your name and not a corporation then the the first $150,000 (USD) of assesed value is not taxed or is exempt from property tax. All value above that amount is taxed. If the property is owned by a corporation then then taxes are owed on the entire assesed value. Remember assesed value is usually much less then market value and is determined by the government land office.

Bob K

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This is my understanding as well. For those that don't pay their annual property taxes, does the govt catch up to them at the time of sale or does this liability get transferred to the new owners upon sale?

Thanks for the info!! The land he had bought wasn't very expensive only a few thousand dollars so maybe this is why he doesn't pay tax?? Would that be correct?

Taken from the sticky: "Overview of Dominican Real Estate Law", prepared by Fabio J. Guzman-Ariza, moderator of DR1's legal forum.

"Properties held in the name of an individual are subject to an annual property tax ("IPI") of 1% of government-appraised value in excess of RD$5,000,000 pesos except for unbuilt lots or farms outside city limits and properties whose owner is 65 years old or older, who has registered it in his or her name for more than 15 years and has no other property.

If the property is held by a corporation, no property tax is due. Instead, the corporation must pay a 1% tax on corporate assets. However, any income tax paid by the corporation will constitute a credit toward the tax on assets, so that if corporate income taxes paid are equal to or higher than the taxes on assets due, the corporation will have no obligation to pay taxes on its assets."

Regards,

Alfredo A. Guzm?n

Very few people in the country pay property taxes. Beware of shady "inspectors" who look too collect them.

twhitehead said:

This is my understanding as well. For those that don't pay their annual property taxes, does the govt catch up to them at the time of sale or does this liability get transferred to the new owners upon sale?

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The DGII doesn't have to wait until point of sale. They can visit you & present a demand I understand. We pay our IVSS so this hasn't happened to us. But if taxes are owing you wouldn't be able to sell until they're cleared - buyer's lawyer would (or should) be checking this when they check any outstanding liens or dues on the property.

Lambada is on the right track...you'll also be risking to be charged for late payment penalties.

The other problem with unpaid taxes I understand is that it can have a knock on effect on other matters now that Governmental departments are communicating more with each other via computer systems. So it could effect those who have businesses, those applying to the Land Tribunal for a search on a property & I'm sure other areas which I haven't even thought of.