Everyone Gets This WRONG About DR Taxes

Before You Buy Property Here… Read This

Welcome to the Grubernation Newsletter!

I share what I’m learning about living, investing and building a life in the Dominican Republic… and more importantly, how to not step on landmines along the way.

In this week’s edition:

• How taxes ACTUALLY work when you invest in DR as a U.S. citizen

• Why owning in your name can cost you way more than you think

• The 1% tax most people don’t even know exists

• How CONFOTUR changes the game

• How you DON’T get double taxed

• What happens when you sell… and when you die

Quick Disclaimer (Because My Attorney Would Kill Me 😅)

I am not a tax professional.
I am not your attorney.

I’m just a guy who spends a LOT of time trying to understand how this works so I don’t do something stupid.

Everything I’m sharing here is based on my current understanding and conversations with professionals…I have NO IDEA if it’s even all accurate but I know it’s ‘directionally accurate’ (term from my corporate days):

👉 but this stuff can change
👉 and your situation is not my situation

So yes…

👉 talk to a professional before you make decisions

If you need one, I’ve built a network of people here I personally use and trust:

👉 www.jamiegruber.com/referrals

Let’s Start With What Most People Get Wrong

There are two BIG misconceptions I hear all the time:

1. “I’m American… I don’t owe taxes in DR”

Not true.

👉 If your property in the Dominican Republic produces income…

👉 you legally owe Dominican income taxes on that income

It doesn’t matter if:

• You’re not a resident

• You’re not a citizen

• You live full-time in the U.S.

👉 The income is generated in DR
👉 So DR taxes it

And when you buy property…

👉 you get registered with DGII (the Dominican IRS)

So from a legal standpoint:

👉 you are on the radar

Now… can people avoid it?

Probably.

But that’s not what we’re talking about.

👉 I’m talking about what’s legally owed

2. “There’s no property tax in DR”

Also… not exactly true.

👉 If you own property personally → IPI may apply

👉 If you own through an entity → there is a 1% annual asset tax

And this one catches people off guard.

👉 It acts as a minimum tax

So even if your income tax is low…

👉 you’re still paying at least 1% of the asset value

⚠️ BUT… CONFOTUR Changes This

If your property has CONFOTUR…

👉 This is a big deal

If held personally:

👉 CONFOTUR wipes out IPI (property tax)

If held in an entity (SRL or LLC):

👉 CONFOTUR wipes out the 1% asset tax

So in that case:

👉 You only pay income tax

Even if that income tax is LESS than what the 1% would have been.

One IMPORTANT caveat:

👉 CONFOTUR does NOT transfer to a buyer when the property is held in a U.S. LLC

👉 But it can transfer if held in a Dominican SRL

So if you’re buying a CONFOTUR property…

👉 how you hold it matters even more

The Example

• 3 condos

• $150K each

• $450K total

• $3,600/month in rent

• $43,200/year

Option 1: Own It In Your Name

But here’s the catch…

👉 For the purposes of Dominican Republic income tax, you generally can’t write off expenses

So instead of being taxed on profit…

👉 You’re taxed on revenue

Example:

• Revenue: $43,200

• Taxed at ~22%
  👉 ~$9,500 in taxes

And THEN you still pay expenses.

👉 So yes… you’re paying taxes on money you never actually kept

Option 2: U.S. LLC (Registered in DR)

👉 You can write things off

• Profit: ~$13,000

Taxes (without CONFOTUR):

• Income tax: ~$3,500

• Asset tax: $4,500

👉 You pay: $4,500

Taxes (with CONFOTUR):

👉 No asset tax
👉 Only income tax (~$3,500)

Option 3: Dominican SRL

👉 Same tax treatment as LLC
👉 Annual filing and bookkeeping costs are likely $3000-$4000 per SRL (take that into consideration)

With CONFOTUR:

👉 No asset tax
👉 Only income tax applies

The Whole Game (Right Here)

👉 Own personally = taxed on revenue
👉 Own in an entity = taxed on profit

Same properties.

Completely different outcome.

👇 If You Want Help With This Stuff…

This is exactly why I built DR Inner Circle.

Because this gets confusing fast.

Inside the community:

👉 Once a month, my attorney hosts a LIVE Zoom
→ you can ask anything about taxes, structuring, legal setup

👉 My immigration attorney does the same
→ residency, citizenship, visas

👉 We also do:

• Real estate market updates

• Weekly Q&A calls with me

• Deal breakdowns

• What’s actually working (and what’s not)

If you want to go deeper than just content…

👉 that’s where we do it

⚠️ One More Thing (This One Matters)

If you already own property…

and decide later to move it into an entity:

👉 You trigger a 3% transfer tax

Always.

👉 Any time the title changes ownership
👉 You pay ~3% of the value

CONFOTUR does NOT waive this.

So:

👉 Decide your structure BEFORE you buy

“Am I Getting Taxed Twice?”

👉 No

You file in both:

• DR

• U.S.

👉 Foreign Tax Credit (FTC) prevents double taxation

What Happens When You Sell?

👉 ~25% capital gains tax in DR

FTC applies in the U.S.

What Happens When You Die?

👉 ~3% estate tax in DR

Filing U.S. Taxes from DR

👉 I use a U.S. accountant
👉 They e-file everything

Done.

My Take

Most people think this is about buying property.

It’s not.

👉 You’re choosing a tax system

And if you don’t understand it upfront…

👉 you can end up paying taxes on money you never even kept

Talk soon,
Jamie

P.S. The biggest mistake I see isn’t buying the wrong property… it’s setting it up the wrong way.