Dear customers and guests of our site, below we provide information on the process of buying properties in Dominican Republic. We would like to draw your attention to the fact that all prices and fees are indicated on the date of publication of  the article and they may suffer changes. For more updated information, contact us through the contacts listed in the “ABOUT US” section.

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The moment has come when you have finished your visit to different real estates and  finally decided to acquire the one that by all the characteristics suits you, and then  you  inform your agent that you are ready to buy it.

1. Drafting an official proposal

The next step of your agent will be the preparation of a formal offer to the owner or his legal representative, usually with an small amount of deposit as confirmation of the seriousness of your  intentions and the confirmation of the solvency of the buyer (according to the value of the property, reaches 5-10% of the value of the real estate).

The deposit will be transferred to your agent or deposited in the bank account of the real estate agency with indication of the name of the buyer or the name of the company in whose name the property will be registered. In the case of a personal transfer of the amount to the real estate agent, the agency must provide a detailed invoice with the amount,  conditions of purchase and the name of the object, stamped by the company and signed by the official.

The proposal has to be made with the indication of the buyer’s data ( ID, usually two – passport data and driver’s license, etc.) and the personal signature of the buyer or his legal representative (attorney). The proposal should indicate the preliminary details of the purchase – the transaction amount, terms of the purchase, the method of payment.

As soon as the official proposal is signed, should be send to the official owners of the real estate or their legal representatives for approval and signature.

Sometimes a formal proposal is made in the form of a preliminary contract, with more detailed descriptions of the conditions (according to prior negotiation with the owners of the property) and should be signed by the parties and certified by a notary in the lawyer’s office.

2. Search of a lawyer

One of the most important moments – because the qualification, experience and responsibility of your legal representative, are decisive characteristics. In this sense, you can take  the recommendations of the real estate agency, taking into consideration the extensive experience of the agency itself.

The cost of a lawyer service is usually 1.5% of  the amount of the sale, and it’s paid directly to the lawyer with an invoice which will contain the detailed description of the service:

• The entire due diligence process:

– To obtain a certificate of the legal status the property

– Obtaining IPI (property tax status ) – certificate of the tax status of  the property – sometimes provided by the seller

• Drafting of final and preliminary contract (in some cases)
• Notarisation of the final and preliminary contract
• Transfer ownership title to the name of the new owner (your name)

You must also pay the lawyer:

3% – the amount of the registered sale, which is an state tax on the re-registration of real estate (transfer of title in the name  the new owner). In this rule, there are exceptions and there are some real estates in which you can avoid a taxes. For more detailed information, please contact us!

3. Closing a deal

It is carried out in accordance with the terms and conditions of the official offer or preliminary contract. The process includes:

• Signature of the final contract (all parties or their legal representatives must be present)
• Payment of the following amount according to the terms of the official offer or preliminary contract: Payment is made through a transfer to the official bank account of the seller or delivered to the seller’s hands with the receipt of the bill for the amount transferred
• In the case of a full payment contract, seller must make the immediate delivery of the original title (proof of ownership document) to your lawyer to complete the process of re-registering the property in your name
• In the case of payments by parts: The title is transferred at the time of the payment of the total amount
• Delivery of the  keys (sometimes is made at the end of the payment of  the total amount)
• Transfer of the title to your name / name of  the new owner: The process takes from 1 to 2 months, depending on the work process of  the administrative institutions. The process is fully implement by the lawyer of the buyer

Upon obtaining the title, you are the absolute owner of a property in the Caribbean!!!! Congratulations!

REAL ESTATE TAXES IN THE DOMINICAN REPUBLIC

There are differences in the process of paying real estate taxes between individuals and legal entities

Individuals

Once: Pay 3% of the value of the property  (there are exceptions, a real estates with tax benefits, ask us about the  available options with a similar privilege)

Annually: The IPI tax (Real Estate Equity Tax) is paid in the amount of 1% of the value properties which exceeds the tax-free limit of 8,138,353.26 RD (Dominican Peso – the rate at the time of writing the article – purchase 1 USD – 56, 32 RD,  https://www.bancentral.gov.do/a/d/2538-mercado-cambiario ) which is 144,500 USD

Example: a purchase the apartment for 200,000 USD. Tax-free limit of 144,500 USD.  The taxable value: 200,000 – 144,500 = $ 55,500

The amount of the tax paid per year( 1% from 55,500 USD) = 555 USD / year

Legal entities

Once: Pay 3% of the value of the property  (here are exceptions, properties  with tax benefits, ask us about the  available options with a similar privilege)

Annually: the tax is paid ” impuesto al patrimonio inmobiliario previsto en la ley No. 18-88, sobre Viviendas Suntuarias ” in the amount of the 0.5%  of  the value of assets. Meanwhile, there are a lot of different benefits and deductions that can be applied in each case. For more detailed information, please contact us through the contacts listed in the “ABOUT US” section.

 We hope this information was useful for you and help you to make the right decision or avoid an expensive error!