According to official figures, from 2013 to the middle of this 2022, there have been 28,701 families benefiting from the bonuses for low cost housing provided by the Government, whose ceiling price for housing units considered in this category has increased by 87.5% when comparing the one set 10 years ago with the current one.
For 2011, the maximum selling price for low cost housing established by the regulations was 2 million pesos. With annual adjustments and modifications, in this 2022 that amount is already 4.5 million pesos.
With the aim of facilitating access to families of “decent housing”, Law 189-11 and its modifications, for the Development of Mortgage Market and the Escrow in the Dominican Republic, it establishes fiscal incentives for low-cost housing projects.
When the law was promulgated in 2011, it defined the Projects of Low Cost Housing as housing solutions, with the participation of the public and/or private sectors, whose units will have a sale price equal to or less than 2 million pesos.
Law 338-21, which modifies articles of Law 189-11, establishes that purchasers of homes through property trusts low cost housing duly accredited by the National Housing Institute (INVI), when this is their first home, they will be entitled to receive a housing bonus equivalent to the corresponding value of the calculation based on the standard cost of materials and services subject to the transfer tax of industrialized goods and services (Itbis), paid during the construction process of the property.
This value will be determined by the INVI, in coordination with the General Directorate of Internal Taxes (DGII). The acquirer must request this bond through the trustee that manages the escrow corresponding low-cost housing. This amount will serve as a supplement to your initial payment for the purchase of the home.
The DGII will finance the compensation for the Itbis, paid in the process of building the house, from the Special Fund for Tax Refunds created. To this end, the Ministry of Finance, through the General Budget Directorate, will include in the budget allocations granted for said fund, the estimated annual amount, as indicated by law.
It is also established that first home buyers through Low Cost Housing Trusts duly accredited by the INVI, will be exempt from paying the transfer tax for the transfer of real estate, at the time of completing the payment of their property.
The buyers of houses that are part of a low-cost project, when requesting their financing from financial intermediation entities, may request from the Ministry of Finance the bonus or direct subsidy equivalent to the amount of Itbis paid in the process of construction of the house. . The request for the bonus will be made by the financial intermediation entity and the bonus as subsidy will be delivered to the entity so that its value is applied to the amount of the approved loan.
According to a decree issued in 2015, housing projects will be considered as such when they include at least eight housing units.
Law 338-21 approved in 2021, modified articles of Law 189-11, establishing the current amount of the low cost housing in 4.5 million pesos, modifying the 3.8 million pesos existing at that time. The Dominican Association of Home Builders and Promoters (Acoprovi) supports the adjustment justifying it in more inclusion.
“When you have that in the last two years the cost of a square meter has skyrocketed by 30 percent – which now is probably 10 percent more – there were many people who had bought their homes as low-cost and were going to stay out of the bonus,” Jorge Montalvo, president of Acoprovi, told Diario Libre last month.
According to data supplied by the DGIIat the request of this newspaper, between 2013 and June 10, 2022, 627 projects have been approved to apply for the bonds, for an amount of 4,347.6 million pesos.
