Buying Property in The Dominican Republic

The Dominican Republic, with its growing economy, Caribbean location and relatively low government regulations has become a popular place for international real estate investors over the past few years. The property costs are low and the value continues to increase at a substantial rate. The buying process is a relatively easy one and foreigners are allowed to own property without any particular restrictions, although, as with all overseas property purchases, there are a few things to keep an eye on as you proceed.

There are real estate agents in the country, but often property is bought between two people without an agent. That doesn’t make it any better or worse, just something to be aware of while you look for your ideal location. Once a price has been negotiated, a contract is written up by a notary and signed by both buyer and seller. It is important to have your own lawyer go over the contract as it isn’t always in the buyer’s favor should something go wrong. With the signing of the contract a 10% deposit is held by the notary.

After the contract is signed and notarized, it is taken to the Internal Revenue Office. This office determines what taxes are owed on the property and on the sale itself. There may be outstanding taxes owed on the property, in which case it is important to have the contract written so that the seller pays them (this is not always the case.) Once the amount of taxes owed is determined, they are paid by the appropriate party. Transfer taxes are 4.48% of the purchase price. Annual property taxes are 1% of the declared value.

Title insurance is an important thing to buy in The Dominican Republic, as the land titles are not always as clear cut as you would like. Also, due diligence is very important to check for a number of factors, including official title, employee’s payments and squatters. Once all this is completed to the buyer’s satisfaction, then it is on to the final steps.

After the taxes are paid, due diligence completed and any last steps taken, such as obtaining financing, the final payment is made. The Contract of Sale and Certificate of Title of the seller are taken to the local Title Registry Office and the sale is recorded. This office will issue a new Certifcate of Title in the buyer’s name and cancel the old one. This process may take only a few days but can take as long as a few months. Once you have the new title, your new property is officially yours.