Invest in Spain or in the Dominican Republic? A comparison worth your attention

In recent years, many investors with real estate assets in Spain have begun to question whether their capital is really working at the pace it deserves. The maturity of the Spanish market, growing regulatory pressure, and returns that no longer surprise have awakened the need to look beyond. In this article I share a direct and clear comparison between the real estate environment in Spain and the opportunities currently offered by the Dominican Republic — with concrete data and a realistic perspective.

Profitability: where does your investment yield more?

In Spain, gross rental yields average around 5–6%, with peaks of 8–10% in very specific high-turnover areas. But even in these cases, tax burdens, rental control regulations, and maintenance costs can significantly reduce that margin.

By contrast, in the Dominican Republic — and especially in areas with high tourist demand like Punta Cana — gross yields range between 8% and 12%, with a much more competitive acquisition cost and tax exemptions applicable in certain qualifying tourism developments like Larimar City. Property appreciation is also significantly more dynamic in the Caribbean country, driven by tourism growth, the arrival of foreign capital, and continuous infrastructure development.

Legal stability: certainty versus uncertainty

Spain has a solid legal framework, but in the real estate sector we have seen a growing trend toward regulating the rental market restrictively: limitations on rent increases, threats of price control, or rising taxes on second homes and tourism rentals. This generates a sense of legal uncertainty that can be discouraging for the investor.

In the Dominican Republic, the legal framework that protects private property is clear, stable, and favorable to the foreign investor. There is no discrimination between nationals and foreigners when acquiring properties. In addition, the country's foreign investment law and tax code offer very attractive incentives for qualifying tourism projects: exemption from the real estate property tax (IPI), from income tax on rentals, and from real estate transfer tax for designated periods of up to 15 years.

Taxation: the silent impact on your return

One of the great enemies of net yield in Spain is the tax burden. Property taxes, rental income taxes, and capital gains taxes — plus local and regional levies — significantly reduce investor margins.

In the Dominican Republic, thanks to the tax exemptions available for qualifying projects under the country's incentive regimes, an investor can enjoy a much lighter tax horizon. This translates into more net profitability from day one.

Economic context: two speeds, two realities

The Spanish economy advances at a contained pace, with GDP growth projections around 1.5–2% annually, and a real estate market showing signs of certain deceleration in some markets.

By contrast, the Dominican economy grew 5% in 2024, with stable projections for the coming years. It's one of the most dynamic economies in Latin America, with strong backing from tourism, foreign investment, and an expanding middle class. In this context, housing demand (both tourism and residential) not only holds — it grows strongly.

Geographic diversification: insurance against uncertainty

Investing in a single country, no matter how safe it seems, means assuming a concentration risk. If Spain introduces new tax or regulatory measures that penalize real estate ownership, or if the market stagnates, all capital will be exposed.

Diversifying geographically — for example, by combining assets in Spain with investment in the Dominican Republic — reduces that risk and offers strategic coverage. In a globalized world, having part of your wealth outside the local environment isn't an extravagance — it's an intelligent decision.

Conclusion: time to look at the Caribbean with different eyes

The question is no longer whether the Dominican Republic is a viable option for the Spanish investor — it's whether they can afford not to seriously consider it. With superior yields, a friendlier legal and tax environment, and an expanding economy, the Caribbean country offers conditions that are hard to find in Europe today.

Within that context, Larimar City & Resort represents a unique opportunity: a top-tier urban development, promoted by a listed Spanish company, with every guarantee of transparency, quality, and future ambition.

If you're considering new options to protect and grow your investment, the best step is to schedule a meeting with our advisors by writing to info@larimarcity.com. We're here to help you make informed decisions, with vision and without pressure.

By Macarena Perona

Deputy Director

CLERHP