Amnesty Law...Until Mid-January

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william webster

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Jan 16, 2009
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So, I have been thinking about this and decided to get advice today (Guzman, Ariza)

Here's an eye opener -

The new computer skills we have seen in Multa tracking and Migracion are at work in property law
For several years , they have been compiling a bank of Google Earth data.

For instance, if you bought land and then built...
The property purchase is recorded.... no record of your build
BUT
When/if they Google your property and see a house on it...... Ooopsy !!

Hence, let's get current here

By coming up to date, you save any future capital gains (27%) and pay 2% for that privilege ...
Naturally, your annual tax bill will reflect the new value.
So, just do the math -
New Tax bill (1%/yr) vs 27% of cap gains tax.....

I think that's how it works - that's how I interpreted it today
I am going forward
 
M

matt77y

Member
Jan 4, 2003
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I own a piece of land in LT (with no construction yet) and I am thinking of doing this myself. At first glance it looks like a really good deal.

The problem I see is that (from my understanding, please correct me if I'm wrong) the value of the land is defined in Peso, not USD. So with a further devaluation of the Peso relative to USD/Euro this option becomes less favorable over time (since I bought the property about 20 years ago the Peso has lost about 75% of its value against the USD).

Now the covid situation has led to a collapse in hard currency inflow through tourism. However, large parts of the public debts are denominated in USD. This is a classic case of a possible rise in inflation, maybe even hyperinflation (see Venezuela among other examples) and a corresponding devaluation of the currency.

So I don't really know what to do here. Maybe we can get a discussion going here to help with the decision.
 
J

johne

Silver
Jun 28, 2003
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william webster said:
So, I have been thinking about this and decided to get advice today (Guzman, Ariza)

Here's an eye opener -

The new computer skills we have seen in Multa tracking and Migracion are at work in property law
For several years , they have been compiling a bank of Google Earth data.

For instance, if you bought land and then built...
The property purchase is recorded.... no record of your build
BUT
When/if they Google your property and see a house on it...... Ooopsy !!

Hence, let's get current here

By coming up to date, you save any future capital gains (27%) and pay 2% for that privilege ...
Naturally, your annual tax bill will reflect the new value.
So, just do the math -
New Tax bill (1%/yr) vs 27% of cap gains tax.....

I think that's how it works - that's how I interpreted it today
I am going forward
Click to expand...
WW
Like the adage"Of all good things come to an end"? The fact that properties had houses built on them and weren't reassessed for higher tax basis was a fault of the government because they did not have the means to do a reassessment. Now, since a 12 year old kid can fly a drone over the property and say "whoops there is a house on the property" homeowners face the treat of much higher valuations down the road.
This is a no brainer. I don't own property in the DR so, no skin in the game here. If one is thinking of gifting or selling in the future I think ...take the deal. If one pays no mind to the future and likes to play odds...don't take the deal.
 
W

william webster

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Jan 16, 2009
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Or - just do the math johne

Savings on sale (27% cap gains) vs annual tax payment

That will give you a break even point.... when to go , when to no go

But respect that 12 yr old kid.....
he's the one who revamped the multa system ans now has everybody dancing to his tune
Same for Migracion tracking.....
Computer literate these days in our little 2.5 world country it seems

The DOP/US$ question is a good one
 
N

Neargale

Active member
Jul 4, 2013
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I bought a house in 2014 for about 90K US$ which was about 3M DOP at the time. Just through devaluation of the pesos it would be worth about 5M DOP if I sell it at same price I bought it.
1. I would have to pay 27% capital gains on the difference? 2M pesos in this case? In other words paying tax on the peso devaluation?..
2. how do I get current evaluation?
 
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Neargale

Active member
Jul 4, 2013
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Hypothetically speaking: If I bought a house in 2014 for about 90K US$ which was about 3M DOP at the time But the contract says 1.8M. Just through devaluation of the pesos it would be worth about 5M DOP if I sell it at same price I bought it.
1. I would have to pay 27% capital gains on the difference? 3.2M pesos in this case? In other words paying tax on the peso devaluation as well as the paper capital gain?..
2. how do I get current evaluation? Who does that?
3. the person buying may buy it on paper for 4 M say, and I would still have to pay tax on 2.2M?
Hypothetically speaking: If I bought a house in 2014 for about 90K US$ which was about 3M DOP at the time But the contract says 1.8M. Just through devaluation of the pesos it would be worth about 5M DOP if I sell it at same price I bought it.
1. I would have to pay 27% capital gains on the difference? 3.2M pesos in this case? In other words paying tax on the peso devaluation as well as the paper capital gain?..
2. how do I get current evaluation? Who does that?
3. the person buying may buy it on paper for 4 M say, and I would still have to pay tax on 2.2M?
 
W

william webster

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Jan 16, 2009
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The currency question is a good one - let me ask

and Yes - the stated tax value and the actual paid value are different in many cases
Perhaps that's the way around being taxed on the currency changes
 
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malko

malko

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Jan 12, 2013
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I believe/hope they will go after people who built on land that is not theirs, first.

Once they have sorted that out, in 112 years per my calculations, they will move on to the folks who built on their own land w/o permission.
 
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william webster

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Malko --- it's not a 'permission ' thing

The land records see only the sale of the land
If you build on that land.... the tax value remains the - no land 'improvements'

When you sell.... since the value is still just land
you'll be taxed 27% on your profit - which includes the land

It behooves the owner to reassess - to restate - the improved value... and avoid 27% capital gains tax
 
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johne

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It seems to me avoiding this deal to some people means:
1. I will get away with this and won't take the deal.
2. I will let those that inherit the property deal with it
3. I can't afford to pay any tax now.
4. Leave me alone, I'm enjoying a cold one.

I'm certain in the land of AI there is something for everyone in the above menu.
 
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william webster

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The fact that they are 'Googling' the country in search of land value variations/increases should come as no surprise-

they are improving their data base in every other area
 
CDNBear

CDNBear

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Tax collector's, never been something to be taken lightly
Silver7-2-fig01.jpg
 
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william webster

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johne, johne, johne.....

you can try that..... and good luck to you

Surveyors use drones now.... GPS coordinates the works.... they're a survey tool, not just a photo camera
 
chico bill

chico bill

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william webster said:
Malko --- it's not a 'permission ' thing

The land records see only the sale of the land
If you build on that land.... the tax value remains the - no land 'improvements'

When you sell.... since the value is still just land
you'll be taxed 27% on your profit - which includes the land

It behooves the owner to reassess - to restate - the improved value... and avoid 27% capital gains tax
Click to expand...
Clarify how paying property taxes avoids a capital gain tax?
What happens to your children's tax burden if they inherit it - you don't sell?
 
W

william webster

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The amnesty is until mid-January.
You may 'revalue' your property for a 2% one time fee.....
The newer, more accurate valuation will allow you to avoid paying capital gains on the old value - the lower value
Cap gains is 27%

Can't answer the inheritance question...... but a 'fresher' value should- should- reduce the burden
 
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cavok

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I don't think this will just apply to land that was purchased and a house was built on it(?). Those who purchased houses and condos, especially prior to about 2005, have seen significant increases in value and will be subject to a big capital gains tax on the sale of their property, too.
 
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william webster

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Certainly, applies to all properties..... a chance to apply the current value
An appraiser does the work ..........
 
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