Tourism-related real estate investment has been one of the main drivers of economic growth in the Dominican Republic. The development of hotels, villas, tourist apartments, condo-hotels, and mixed-use projects has benefited from the incentive framework established by Law No. 158-01 on the Promotion of Tourism Development, commonly known as the CONFOTUR Law, which has played a decisive role in attracting capital and promoting new destinations.

However, the entry into force of Law No. 30-26 on Pro-Growth Economic Measures, Tax Simplification, and Mitigation of the International Crisis introduces new variables that must be considered when structuring, financing, developing, and marketing tourism-related real estate projects.

Although Law No. 30-26 neither repeals nor expressly modifies the benefits established by Law No. 158-01, it introduces a cross-cutting rule that prevents taxpayers from simultaneously benefiting from more than one incentive regime in connection with the same economic activity, investment, or transaction. This provision presents interpretive challenges and requires developers and investors to examine the legal and tax architecture of their projects in greater detail. The practical scope of this provision remains to be clarified through administrative criteria and, potentially, case law, particularly with respect to tourism-related real estate projects that interact with other special regimes.

What benefits does the CONFOTUR regime offer?

Law No. 158-01, primarily amended by Law No. 195-13, establishes a special incentive regime for tourism projects classified by the Tourism Development Council (Consejo de Fomento Turístico or CONFOTUR).

Eligible projects include hotels, resorts, tourism complexes, real estate developments intended for tourism, golf courses, theme parks, port infrastructure, and other ventures connected with tourism offerings.

Depending on the nature of the project and the terms of its classification, the incentives may include exemptions from:

• Income Tax generated by the promoted activities.
• National and municipal taxes associated with the incorporation of companies and increases in their capital.
• Real estate transfer tax applicable to the acquisition of land designated for the project.
• Real Estate Property Tax (Impuesto sobre la Propiedad Inmobiliaria or IPI).
• Tax on the Transfer of Industrialized Goods and Services (Impuesto sobre Transferencias de Bienes Industrializados y Servicios or ITBIS) and customs duties applicable to certain equipment, materials, and goods required for the construction, commissioning, or renovation of the project.
• Taxes related to the first transfer of real estate units forming part of the classified project.

Law No. 195-13 expanded the regime’s territorial scope to the entire country and extended the exemption period to fifteen years, calculated from the date on which the project’s construction and outfitting works are completed.

Nevertheless, obtaining a classification should not be understood as an open-ended tax authorization. The incentives are linked to the specifically approved project, activities, investments, and assets. Their application therefore requires documentary traceability and ongoing compliance with the conditions established by CONFOTUR and the tax authorities.

The new rule on the accumulation of incentives

Article 1 of Law No. 30-26 adds paragraph 2-1 to the Dominican Tax Code and provides that taxpayers may elect the tax regime they consider most advantageous, but may not simultaneously benefit from more than one incentive regime with respect to the same economic activity, investment, or transaction.

This provision does not expressly mention CONFOTUR or eliminate any of the benefits provided under Law No. 158-01. Its general wording, however, could be relevant to projects that, in addition to CONFOTUR, seek to benefit from other special incentive regimes with respect to the same economic activity, investment, or transaction.

It is important to note that the rule does not generally prohibit the same taxpayer from benefiting from different tax incentives. The restriction is limited to cases in which those incentives apply to the same economic activity, investment, or transaction—terms that Law No. 30-26 itself does not define and whose scope will need to be determined by the Tax Administration and the courts of the Dominican Republic.

Precisely because of the breadth of the terms used by the legislature, application of the new rule may raise questions in mixed-use projects where several business lines coexist. The legal issue will be whether those activities in fact constitute the same economic activity, investment, or transaction, or whether they represent distinct businesses eligible for different tax treatment.

If the Tax Administration were to conclude that two incentives apply to the same economic activity, investment, or transaction, it may become necessary to determine which regime applies. As noted above, however, the law currently establishes neither the mechanism for making that choice nor the specific consequences of such an incompatibility.

Classified projects and projects under review

The new rule also creates distinctions between projects that already hold a final classification and those still undergoing evaluation.

Law No. 158-01 provides that, during the tax-exemption period, no new tax burdens may be imposed that affect classified projects. This provision could serve as a basis for protecting previously recognized benefits against subsequent measures that, in practice, reduce their scope.

However, the application of this protection in relation to the prohibition introduced by Law No. 30-26 must be assessed on a case-by-case basis. The position may also be less clear for projects that hold only a provisional classification, have applied for admission to the regime, or remain in the structuring phase.

Developers should therefore review the classification resolutions they have obtained, the authorized activities, the validity period of the benefits, and any conditions incorporated during the approval process.

The principle of lex specialis

The interaction between Law No. 30-26 and Law No. 158-01 must also be analyzed in light of the principle of lex specialis, which is widely recognized as a criterion for resolving apparent conflicts between legal rules. Under this principle, a special rule prevails over a general rule when both govern the same matter, unless the legislature has clearly and unequivocally expressed its intention to amend or repeal the special regime.

From this perspective, the CONFOTUR Law constitutes a special regime specifically designed to promote tourism investment through a set of tax incentives applicable to projects classified by CONFOTUR. Law No. 30-26, by contrast, introduces a general rule prohibiting the accumulation of incentives in connection with the same economic activity, investment, or transaction, without expressly amending Law No. 158-01 or referring specifically to that regime.

In that context, an interpretation consistent with the principle of lex specialis would lead to the conclusion that Law No. 30-26 does not, in and of itself, restrict the benefits provided under Law No. 158-01. Nevertheless, the breadth of the prohibition introduced by Law No. 30-26 creates interpretive uncertainty, particularly regarding the scope to be attributed to the expression ‘same economic activity, investment, or transaction,’ an issue that will need to be clarified by the administrative authorities and, ultimately, the courts.

Other aspects of Law No. 30-26 relevant to the real estate sector

In addition to limiting the accumulation of incentives, Law No. 30-26 introduces amendments that may affect the structuring and marketing of real estate assets.

One of the most significant changes introduced by Law No. 30-26 is the establishment of a 10% rate as a single and final payment on capital gains earned by individuals from the sale of real estate. The law also provides certain exemptions related to the sale of, and reinvestment in, a primary residence, as well as for persons over 65 years of age who transfer their primary residence.

This regime is particularly relevant to individual property owners and investors in transactions that are not covered by an exemption under the CONFOTUR Law or after the incentive period has expired.

Law No. 30-26 also provides for a gradual reduction of the ad valorem tax applicable to certain transactions related to the registration and maintenance of mortgages: the rate is reduced to 1% during 2027 and eliminated beginning in 2028. This reduction has the potential to gradually lower the costs associated with creating and registering mortgage security interests, thereby facilitating the financing of real estate projects.

In addition, Law No. 30-26 did not amend the 3% real estate transfer tax provided under current legislation. Accordingly, unless a valid exemption applies under CONFOTUR or another special regime, this tax remains a significant cost in real estate transfer transactions.

How should developers and investors prepare?

In this new environment, tax planning should not take place after a project has been designed or marketed. It should be incorporated from the initial structuring phase.

Recommended measures include:

• Review the corporate and operating structure. Identify which company constructs, markets, manages, and operates each component of the project, as well as the incentives used by each entity.
• Define the activities covered by the incentives. Compare the classification resolution with the economic activity actually carried out, the contracts executed, and the revenue generated.
• Appropriately separate operations. In mixed-use projects, it may be advisable to maintain separate contracts, accounts, accounting records, personnel, and cost centers. The separation must have economic substance and should not be limited to the formal creation of multiple companies.
• Recalculate financial models. Projections should contemplate scenarios in which the Tax Administration determines that two incentives cannot be applied simultaneously.
• Review promises of sale and marketing materials. Tax benefits advertised to purchasers must correspond to the classification in force and the conditions applicable to each unit. Not all projects or transfers automatically receive the same treatment.
• Maintain a compliance file. Invoices, import records, construction contracts, authorizations, permits, certifications, and accounting records should demonstrate that exempt goods and services were used in the authorized project.
• Monitor implementing regulations. Criteria issued by the Executive Branch, the Dominican Tax Authority (Dirección General de Impuestos Internos or DGII), and the Ministry of Tourism will be decisive in defining the practical scope of the prohibition on accumulating incentives.

Preventive planning to protect the investment

CONFOTUR remains a fundamental tool for promoting tourism and real estate investment in the Dominican Republic. Law No. 30-26 does not eliminate this regime, but it changes the context in which its benefits must be interpreted and administered.

For developers, investment funds, financial institutions, and purchasers, the challenge is to determine from the outset which activities are effectively covered, which other incentives interact with the project, and whether that combination may be considered incompatible under the new rules.

In this environment, preventive legal and tax structuring helps reduce contingencies, preserve the project’s bankability, and provide greater certainty to investors and purchasers. Specialized counsel is particularly important for mixed-use projects or projects with several business lines, where the distinction between activities may determine the applicable tax treatment and, consequently, the investment’s ultimate profitability.

Ultimately, Law No. 30-26 should not be interpreted in isolation. It must be applied in harmony with the special regimes currently in force, including Law No. 158-01, and in light of interpretive principles such as lex specialis, legal certainty, and legitimate expectations. Only through such an analysis can it be determined, in each specific case, whether a genuine incompatibility exists between the two regimes or whether they may coexist.