The director of the Department of Taxes (DGII), Juan Hernandez highlighted yesterday, are reported in Hoy newspaper, the positive aspects for consumers of recently enacted tax reform. Hernandez pointed out that the new tax code offers breaks for the elderly and increased deductions for the salaried.
Property taxes were eliminated for housing valued at less than RD$5 million, and houses belonging to people over 65 years of age are exempted from the tax altogether. Inheritance taxes were also reduced, and tax on rentals was reduced from 20% to 10%.
He said that owners of dwellings assessed up to RD$5 million are now exempt from paying the luxury tax (IVS). Furthermore, he said that owners that are over 65 years old are exempt from the tax. He also highlighted the substantial reduction in the inheritance tax. He explained in the past, real estate inheritance transactions were taxed at 32%; this was reduced to 3%. Another significant savings will be that the real estate transfer tax is reduced to 3%, down from 4.48%. And he said rentals will now only pay 10% tax, down from 20%.
Juan Hernandez also stresses that thousands will benefit from the higher ceiling for the start of income tax payments on wages. This was raised to RD$20,000 up from RD$16,456. This level is normally adjusted for inflation in January. It is yet to be seen if year’s end inflation, which could hover around 35%, will be applied for another increase in the tax exempt level of wages at the start of next year.