The short version: Yes, short-term rentals are legal in the Dominican Republic, and Cabarete is one of the most Airbnb-friendly towns on the North Coast. But whether your unit can be rented short-term is decided by your building’s bylaws, not by the government. That is the detail that catches buyers out.
The legal picture in plain English
There is no national law banning short-term rentals in the DR, and no Cabarete municipal permit system like you would find in Barcelona or New York. Tourism is the engine of this economy and the government treats it that way. What regulates your rental in practice is:
- Your building’s reglamento (bylaws). Some condos welcome short-term guests. Some require minimum stays of a week or a month. A few ban rentals outright. This is binding and enforceable.
- Taxes. Rental income earned in the DR is taxable in the DR, and platforms are increasingly reporting host income. A good local accountant is cheap insurance.
- Tourism incentives (Confotur). Some newer projects are approved under the Confotur law, which was designed to encourage exactly this kind of tourism investment, and these are generally rental-friendly by design.
How the neighborhoods compare for rentals
| Area | Short-term rental reality |
|---|---|
| Kite Beach | The strongest Airbnb market in town. Most condo buildings are rental-friendly and many were built for it. High demand December through April and June through August. |
| Cabarete Bay / Centro | Strong demand from tourists who want to walk to restaurants and nightlife. Check bylaws building by building. |
| Encuentro Beach | Surf-driven demand, longer average stays, quieter buildings. Some communities prefer monthly rentals. |
| Perla Marina | Gated residential community. Villas generally rent fine; some sections and condos have stricter rules. Verify before you buy. |
| Sosúa | Large established rental market with a wide range of buildings and rules. |
What realistic numbers look like
A well-run one or two bedroom condo near Kite Beach typically achieves occupancy in the 50 to 70 percent range across the year, with nightly rates roughly US$60 to US$150 depending on size, finish, and distance to the beach. Gross yields of 6 to 10 percent are achievable on well-bought units. They are not automatic. Anyone promising you 15 percent guaranteed is selling bulto.
The costs people forget: management (typically 15 to 25 percent of revenue), electricity for guests who run the AC all day, HOA fees, and the slow months of September to November.
If the seller’s rental projection were real, they would not be selling.
Airbnb questions I get all the time
Is Airbnb legal in Cabarete?
Yes. There is no law against short-term rentals in the Dominican Republic and no municipal licensing scheme in Cabarete. The binding restriction is your own building’s bylaws, which can limit or prohibit short-term rentals, so always check the reglamento before buying.
Do I pay tax on Airbnb income in the Dominican Republic?
Yes. Rental income generated in the DR is taxable in the DR regardless of where you are resident. Many owners run it through a simple local structure with an accountant. Budget for it from day one rather than treating it as a surprise.
Can foreigners own and rent out property in the DR?
Yes. Foreigners have the same property ownership rights as Dominicans, with no restrictions on renting your property out. You do not need residency to own or to rent out a property.
What occupancy can I expect in Cabarete?
Well-managed condos near the beach typically run 50 to 70 percent annual occupancy. High season is December to April, with a second bump in June to August driven by wind season and summer travel. September to November is slow.
What is Confotur and why do buyers talk about it?
Confotur is a Dominican tourism-incentive law. Properties in approved projects can benefit from significant tax advantages, including exemption from the 3 percent transfer tax and from annual property tax for a set period. Confotur projects are also generally built for rental use. Always confirm a project’s Confotur status in writing.
Should I self-manage or hire a property manager?
If you do not live here, hire a manager. Guests need check-ins, cleaners need supervising, and power or water hiccups need someone local within the hour. Good managers in Cabarete charge roughly 15 to 25 percent of revenue and earn it.
Thinking about a rental property? Tell me your budget and I will tell you honestly which buildings rent well and which ones only look like they do. Write me or check the current listings.
Don’t take my word for it
Real talk means you can check this yourself. The official Dominican sources:
- Ministerio de Turismo: tourism regulation and the Confotur framework for short-term rentals.
- DGII: the ITBIS and income tax that apply to rental earnings.