Q. Are there annual property taxes for real estate in the Dominican Republic?
A. Property taxes depend upon the value of the home you purchase. If you purchase a residential property and it is worth RD$5 Million Pesos or less (about US$150,000), then you pay ZERO annual real estate taxes. If the home is worth more than that amount, you pay 1% (one percent) of the value over and above RD$5 Million Pesos (over and above US$150,000)
Q. How are real estate transactions governed in the Dominican Republic?
A. Real estate transactions are presently governed by the Land Registry Law of amendments. A new Land Registry Law was enacted in 2005.
Q. Are there any restrictions against foreigners owning real estate in the Dominican Republic?
A. There are no restrictions on foreigners purchasing real property in the Dominican Republic. There are no restrictions placed on foreign investing in Dominican Republic real estate. In fact, the government welcomes it, recognizing that it positively contributes to the local economy. Additionally, there are no restrictions on purchasing oceanfront real estate as there are in many other countries in the Caribbean basin, such as Mexico. In early 1998, laws were established stating that the only requirement for ownership is that the Title Registry Offices keep a record, for statistical purposes, of all purchases made by foreigners.
Foreigners are allowed to purchase property in the Dominican Republic with the same rights and obligations as a Dominican citizen.
Q. How easy is it to acquire property in the Dominican Republic?
A. Acquiring property in the Dominican Republic is an instant transaction. Just like a simple transfer of title would be in any country selling and buying property in the same country. However, foreigners purchasing property outside of their native countries are urged to exercise caution.
The realtor and notario working with you throughout the process should be able to assist you. Hiring your own attorney is something you may wish to consider. It is common for realtors to recommend attorneys whom they know and trust.
You are ultimately responsible for due diligence with your attorney to ensure that all documentation ranging from title searches to surveys to furniture inventories (if applicable) has been properly verified and processed.
Q. How do real estate purchases work in the Dominican Republic?
A. Instead of the traditional offer and counter-offer process found here in the United States, you would first negotiate with the seller on the selling price. Once a verbal agreement has been reached, then the process of purchasing property will begin.
A binding “Promise of Sale” or “Option to Purchase” is drawn up and prepared by an attorney and signed by both parties. It is at this time that a deposit or advance payment is made.
Q. How is a title held for real estate in the Dominican Republic?
A. You may hold the title in your personal name or in your Dominican Republic company name. There are tax advantages in using a corporation to hold your property title, such as lower closing costs and taxes. Dominican corporations are fairly easy to set up; the process usually takes six weeks and costs typically around $1,200. You'll then pay $250 for an annual report that must be filed each year.
Q. What is the purpose of the title insurance companies? Who would you recommend?
A. Title insurance companies will perform a title research dating back to several former owners, to make sure that the property was transferred correctly from one owner to the other and there are no liens on the title. A thorough search in the public records will reveal whether the title has no opposition, or if it does. Many lawyers have done title research as part of their legalization process since decades ago, because of the need to validate real estate transactions.
If you want to use a title insurance provider in the Dominican Republic, we recommend Stewart Title and First American Insurance Company.
Q. What are the steps to homeownership in the Dominican Republic?
A. There are four simple steps to homeownership in the Dominican Republic. These steps are as follows:
1. Buyer and seller sign a "Contract of Sale" before a notario who authenticates it. Notaries in the Dominican Republic are required to have a law degree. The Contract of Sale contains the legal description of the property, the price, and the conditions of sale.
2. Usually the funds for property purchase are deposited by the buyer via electronic bank transfer or check to the trust account of the notario. The funds are then transferred to the seller from the trust account of the notario after the title is cleared.
3. The authenticated Contract is then taken to the nearest Internal Revenue Office for payment of the appropriate taxes.
4. The Contract of Sale and the Certificate of Title of the seller are deposited at the Title Registry Office for the jurisdiction where the property is located, and the sale is recorded.
5. The Title Registry Office issues a new Certificate of Title in the name of the buyer, or the company, and cancels the old Certificate issued previously to the seller.
6. The time span from the filing of the Contract of Sale to the issuing of the new Certificate of Title may vary from a few days to a few months, depending on the Title Registry Office where the sale was recorded.
The entire process from the Contract of Sale to the issuance of the new Certificate of Title will vary from a few days up to a few months depending on the office at which the sale is recorded.
Q. When improvements have been made to the property, should I have it inspected?
A. It is recommended that you arrange for an inspection of any and all improvements by a qualified builder or architect to confirm that the plans presented are correct and that the improvements are in good condition. Los Suenos offers a guarantee from the builder himself that all improvements and renovations will be up to standard code and protocols.
Q. Do I need a permit to purchase land in the Dominican Republic?
A. Before purchasing raw land in the Dominican Republic, it is highly recommended that you have your attorney confirm that the property may be used for the purposes you desire.
Q. What do I need to do to ensure possession of purchased property?
A. Your attorney should ensure that the seller is in possession of the property in question and that no squatter’s rights exist.
The rights of tenants on the property are strongly protected under Dominican law, and evicting someone who is unwilling to leave can be a time-consuming and expensive process.
Q. What documents will I need to purchase property in the DR?
A. What you need will vary with the institution and with the form of purchasing. The minimum you will need is: Two forms of official photo ID, one being your passport.
If you plan to finance the property, Los Suenos would require some type of official document in order to disclose your income. This could be copies of last year’s income tax filing, a letter from your present employer on company letterhead (if you plan to move and work in the DR, get a letter of intent from your prospective new employer, noting start date, length of employment and salary) and contact number of hiring personnel.
Any other documents related to any/all sources of income; savings and checking statements; outstanding debts and proof of on time payments. You should bring anything you can to prove your solvency. You will also need to show plans of the house/building you wish
Q. What is the economy like in the DR?
A. During the late 1990s, the principal growth sectors of the economy were communications, construction, hotels, electricity and water, agriculture and cattle and commerce.
Today, the Dominican Republic is in a growth cycle accompanied by relatively low rates of inflation.
The Dominican Republic imports goods from all over the world, but approximately 43% of the country's imports come from the United States.
Dominican authorities are concerned with modernizing the legal system under which foreign and national businesses operate in the Dominican Republic, as well as with reforming certain important sectors of the economy to open them to foreign investors.
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