Property Tax in Real Estate

PROPERTY TAX

In this article we are going to talk about an extremely important topic, we are talking about the Real Estate Property Tax. The IPI is the annual tax that is applied to the sum of the registered real estate assets. What does this mean? This means that the value of all your registered properties is added annually, and thatbased on this sum the amount of money you must pay annually is obtained.

How much does the real estate tax correspond? The IPI corresponds to 1% of the surplus value of RD $ 7,138,384.80 of the real estate assets, that is, if the sum of my real estate assets exceeds seven million one hundred and thirty-eight thousand, three hundred and thirty-four with eighty pesos, you will pay 1% of that surplus.

If the value of my real estate assets is less than RD $ 7,138,384.80, do I have to pay this tax? The answer is no, this tax only applies to the excess of the current tax exemption for that year. You can consult the General Directorate of Internal Taxes to know the amount since it can vary based on inflation.
On the other hand, if you own 1 or more properties and the sum of the values ​​of each one exceeds the amount of RD $ 7,138,384.80, you will pay 1% of the difference. For example, suppose you have a property that costs RD $ 4,540,000 and another for RD$5,470,000, your real estate assets would be RD$10,010,000. You would have to pay 1% of the surplus, that is, 1% of RD $ 2,871,615.2, which gives an amount of (RD $ 28,716,152).

When should I pay this tax? The state gives you the possibility to pay this tax in 2 installments, the first on March 11 and the second on September 11. It is very important that you pay this tax within this period of time since making the payment after the stipulated deadline, applies a 10% late payment surcharge on the value to be paid, for the first month.

What if the first month goes by? A progressive and indefinite 4% is added for each month or subsequent fraction, together with a cumulative 1.10% of compensatory interest. Following the previous example, if you already had to pay the amount of RD $ 28,716,152 of IPI, I do not think you want to add more money to that amount just for not paying the tax within the stipulated periods. It is important to add that in order to have a potable property to be sold in the future, it must have the IPI paid, since otherwise you will not be able to transfer that property in the name of the
buyer. Having said this, we advise you to request the IPI certification from your real estate agent before buying the property, since with this you will know whether or not you have debts and, if you do, you will know how much money the property owner owes.

Remember to check the current tax exemption at the General Directorate of Internal Taxes, in this way you will know if your property is exempt from paying the IPI or not, so if you are not, you will be able to know how much you should pay.