16% itbis on real estate???

hombrecaribe · #1 08-31-2009, 04:51 PM

Homes of the poor won't pay taxes
Homes that have a value of RD$1.5 million or less will not have to pay the 16% ITBIS tax, according to a new decree issued by President Leonel Fernandez. Decree 611-09 creates a RD$200 million fund so that these homes can be purchased without paying the ITBIS tax. The decision seeks to stimulate the construction of more low cost housing. The ITBIS program will be valid through 31 December 2010.

This is from dr1.com a couple weeks ago. Does this mean houses over RD$1.5 million have to pay this tax, this must be a misprint or I am just not understanding it correctly.

Black Dog · #2 08-31-2009, 05:05 PM

You don't pay ITBIS when you purchase a home. When a real estate agent sells one his/her commission is subject to ITBIS but not all are registered and pay it!

hombrecaribe · #3 08-31-2009, 05:32 PM

Must be misprint is what you are saying?? It clearly states that homes with less value won't need to pay ITBIS. Also not sure how this helps the poor if it is as you say only for agents paying on their commisions. Maybe Mr. Guzman would like to explain this if indeed it isn't a misprint.

Fabio J. Guzman · #4 09-04-2009, 07:38 PM

ITBIS is a value-added tax (VAT) not applicable to real estate transactions.

I believe you refer to the IPI (Impuesto sobre la propiedad inmobiliaria") which is an annual property tax.

MikeFisher · #5 09-04-2009, 09:17 PM

what ITBIS on property???
looks i missed something important which changed or you don't know what you are talking about, Hombrecaribe??
the tax to be paid on properties is a property tax, not a Vat.
low value property under a million and a half are excepted from paying that tax to help the poor to be able to purchase property.
what should be wrong on that?
wanna except the rich to pay the property taxes for their luxury beachfront lots?
you can't get a getaway condo or villa for softer conditions in the caribbean in a valuable destin than here in DR.
the property taxes are peanuts compared to what ya purchase and what you would have to pay in taxes somewhere else.
Mike

drcaycu · #6 09-04-2009, 09:26 PM

But there is 16% ITBIS on commisions unless it is empreses especiales properties in Zona Francas. A lot of agents dont charge it and dont report it. Very frustrating if you belong to one of the brokers who do.

MikeFisher · #7 09-04-2009, 09:40 PM

that's a Vat,
a tax, named ITBIS paid by 16% on the winning money you make out of a deal, like on the comission for a sales, any sales, including property sales.
i understand fully why you name it frustrating to work for brokers which report their sales by the rule of the law,
on the other side you should know that the ones whio do not report their sales are working illegally.
it just depends on what side/way of life you wanna work and live.
everybody's choice.
Mike

MikeFisher · #8 09-04-2009, 09:42 PM

Quote:

Originally Posted by drcaycu

But there is 16% ITBIS on commisions unless it is empreses especiales properties in Zona Francas. A lot of agents dont charge it and dont report it. Very frustrating if you belong to one of the brokers who do.

you have also always the choice to report the ones withing your kinda business who do not run by the rules/laws, kick 'em out or don't complain.
like in all branches of businesses.
if a competitor offers the better deals b/c he/she is saving money by selling black deals,
knock him/her down and all will be just fine.
Mike

drcaycu · #9 09-06-2009, 05:35 PM

Quote:

Originally Posted by MikeFisher

that's a Vat,
a tax, named ITBIS paid by 16% on the winning money you make out of a deal, like on the comission for a sales, any sales, including property sales.
i understand fully why you name it frustrating to work for brokers which report their sales by the rule of the law,
on the other side you should know that the ones whio do not report their sales are working illegally.
it just depends on what side/way of life you wanna work and live.
everybody's choice.
Mike

Yes I have decided to live on the legal side by collecting all comisions with a NFC comprobante fiscal. I am just saying there are not many who do it. And in this case the foriegners seem to be the worst. It is easier in Santo Domingo to work the legal way and make money.

MikeFisher · #10 09-07-2009, 12:12 PM

right,
it is very often foreigner's business who take it that way:
'hey, i m on the banana republic island, i am smarter than the rest, i do it in any way i want to'.
at some businesses this is still working, right,
but i saw in case of my own competition many boats stoppped/gone the last years, and most of them been american and puerto rican boats.
they 'think' they are superior and can do business the way they want to, some of 'em been teached the hard way that if they want to do so it will be better they try so at their homeports and not nearby here.
you have just to stick with the ones who do it right and always blame the bad apples publically, inckuding in front of their clientel audience.
Mike