When investing in real estate in the Dominican Republic, one important incentive that homebuyers and developers should be aware of is the Confortur law. This tax exemption program offers significant benefits for properties that qualify. In this article, we’ll break down what Confortur is, how it works, and how buyers and developers can take advantage of its benefits.

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Many potential buyers and investors have questions about the Confotur law and whether they can apply for it on their property. Confotur is a tax exemption program designed to incentivize real estate development by offering tax breaks to homebuyers purchasing eligible properties.

However, not every property qualifies for Confotur.

One of the most common misconceptions is that buyers can apply for Confotur on their own after purchasing a property. This is not the case. The Confotur designation is obtained by the developer during the project’s approval process.

Therefore, if you are interested in purchasing a property with these benefits, you must confirm its eligibility before making the purchase. Contact OCC Lawyers to see if the property you are looking to purchase qualifies.

Confotur is specifically designed to provide tax relief to homebuyers purchasing properties that have already been approved under the program. This means that individual property owners cannot submit their homes for Confotur status after purchase. Instead, the approval process is carried out by the developer at the project level.

If you are considering purchasing a property and want to take advantage of Confotur’s benefits, you should consult with your real estate attorney to verify the project’s approval status. Some developers may claim that a property is eligible when, in reality, it is still in the application process.

To avoid any misunderstandings, a lawyer should confirm that the property has already received Confotur approval.

Since Confotur benefits must be established at the project level, not all properties qualify. Buyers must ensure that the real estate development they are considering has been approved for Confotur before making a purchase.

This due diligence process is essential, as buyers cannot apply for the benefits after acquiring a property.

To confirm whether a property qualifies for Confotur, you should:

• Consult with a real estate lawyer to verify its status.
• Ask the developer or real estate agent for documentation proving Confotur approval.
• Conduct due diligence to ensure that the approval is finalized and not just in progress.

One common question is whether purchasing a Confotur-approved property grants residency in the Dominican Republic. The answer is no. Confotur is strictly a tax incentive program and does not provide residency or legal status benefits.

The benefits of Confotur vary depending on whether you are a homebuyer or a developer.

Benefits for Homebuyers

If you are purchasing a property that qualifies for Confotur, you can enjoy two major tax benefits:

1. Exemption from Property Transfer Taxes – Buyers will not have to pay the property transfer tax when acquiring a Confotur-approved property.
2. Exemption from Annual Property Taxes – The property will be exempt from property taxes for up to 15 years.

These exemptions apply regardless of how many Confotur-approved properties you own, making it an excellent incentive for investors looking to purchase multiple units.

Benefits for Developers

Developers who secure Confotur approval for their projects can benefit from various tax exemptions, making it easier to build and sell properties. If you are a developer interested in these benefits, it is recommended to consult with a real estate lawyer to understand the full scope of tax advantages.

There is no limit to the number of properties a buyer can purchase under Confotur. As long as each property has been pre-approved for the program, the buyer will receive the tax exemptions on all of them. This makes Confotur particularly attractive for real estate investors.

One of the most significant advantages of Confotur is the exemption from property transfer taxes and annual property taxes. However, these benefits are only valid for a limited time. The property tax exemption is valid for up to 15 years from the date of approval.

It is crucial to verify the approval date to determine how much time remains on the exemption.

Another frequently asked question is whether a buyer must purchase the property under their personal name or if they can buy it through a corporation, such as an LLC or a Dominican SRL. Since the tax exemption applies to the property itself, not the owner, buyers can benefit from Confotur regardless of whether they purchase under a personal name or a company.

Confotur benefits are not transferable to subsequent buyers. The tax exemptions only apply to the first buyer purchasing the property directly from the developer. If the property is resold, the new owner will not inherit the Confotur benefits.

This is an important consideration for investors planning to resell their property. Since the Confotur benefits are lost upon resale, buyers should plan their investment strategy accordingly. Consulting a real estate attorney can help investors make informed decisions about leveraging these benefits effectively.

Whether to purchase a Confotur-approved property under a corporation or a personal name depends on your long-term goals. If you plan to hold the property as a personal residence, purchasing under your name may be sufficient. However, if you are investing in multiple properties or planning to rent them out, a corporate structure may offer advantages in terms of liability protection and financial planning.

Each case is different, and the best option depends on factors such as investment strategy, taxation, and legal considerations. Seeking professional advice is highly recommended.

The Confotur law offers significant tax incentives for homebuyers and developers in the Dominican Republic. However, it is essential to conduct thorough due diligence before purchasing a property to ensure that it qualifies for these benefits. Working with a knowledgeable real estate attorney can help you navigate the process and maximize your investment.

If you have any questions about Confotur or need assistance with your real estate investment, contact us, the professionals at OCC Lawyers.