Dominican Republic, Full of Beauty and Wonder, the Perfect Location to Invest in Real Estate

Living in the Caribbean surrounded by palm trees, on white or golden sandy beaches, is the dream of many. However, beyond that desire, people often forget to familiarize themselves with the necessary process that comes with investing in real estate in the Dominican Republic.

Nevertheless, this isn’t something that you should feel uneasy or stressed about, especially since Century 21 Perdomo has a multilingual team of real estate agents and notary lawyers who will provide you with all the required information for negotiating real estate here in the Dominican Republic.

Our real estate agency has offices in Sosúa, Cabarete and Las Terrenas, in all of which our teams are equipped to inform you of the correct steps to take when buying a sea view villa, a beachfront apartment, or to acquire a plot of land, to either build your dream home on, or perhaps an apartment complex. In short, we have everything you need to hand, so you can fulfil your dream of owning or building a property in the Dominican Republic.

However, before proceeding to buy a property, it is recommended that you consult a reputable lawyer to investigate the legal status of the property, in which case the owner or seller must provide:

• Copies of the deed of the property, the land registry plan, official identification documents or a passport.
• Certification of tax exemption or a receipt for proof of tax payment.
• Documentation of the company selling the property, and the authorization of the sale of the property (if applicable).
• Condominium regulations and declaration (if applicable).

How Does the Transfer of Ownership Process Work?

The following are the required steps for the transfer of ownership of a real estate property:

• To begin with, the “sales agreement” should be signed in the presence of a notary, who will authorize the signed contract. It must also be taken into consideration whether the seller is married, in which case the sales agreement should also be signed by their spouse. This contract contains the legal description of the property, the price, and other conditions.
• It is also important to have a valuation of the property carried out, in the office closest to the General Directorate of Internal Taxes (DGII), and then, you can proceed to pay the transfer taxes.
• Later, you should deposit the transfer contract and the seller’s deeds to the registry office in the district where the property is located, along with the documentation provided by the DGII and the copies of official identification or passports of all parties involved in the buying-selling process.
• As a result of this process, the Registry Office will send out a new certificate of ownership in the name of the buyer and will cancel the former certificate that exists in the name of the seller. It can usually take from as little as a few days to as long as a few months from the initial signing of the sales agreement to the emission of the new ownership certificate. This is because the process depends on the registry office of where the sale is registered.
• The estimated legal fees are worked out at 1% of the total price of the property (with a minimum fee of $800) and they cover all the required contracts for closing of the deal, the investigation of the legal status of the property, and all the necessary records for the transfer of ownership to the new property owner. The buyer pays for the legal fees, while the seller pays for the commission of the property.

Transfer Taxes

The property’s transfer tax is a one-time payment and is no more than 3% of the calculated value of the property, plus $250 to cover any miscellaneous expenses. This fee is calculated by the General Directorate of Internal Taxes (DGII) and your lawyer will be the one to inform you of the exact amount.

The New Real Estate Law

This new law came into effect on January 1st, 2013, and its main changes are:

1. Properties registered in the name of individuals, and their value calculated by the General Directorate of Internal Taxes, must be at least $8.1 million to be exempt from annual property tax. Any excess of this value can be taken away from the 1% tax payment.
2. The price of all the properties that are registered in the name of an individual will be added up and if the total amount is less than $8.1 million, this person will be exempt from paying the annual tax. If it exceeds this amount, the 1% annual fee should be paid.
3. Properties registered to a company name must pay the 1% annual fee calculated by the DGII, with no exceptions.

The Inheritance of Properties in The Dominican Republic by Foreign Visitors

There are no restrictions for foreign guests who have inherited properties in the Dominican Republic. The tax to pay on successions or inheritances is 3% of the value of the property, calculated by the DGII. But, on the contrary, if the beneficiary lives outside the Dominican Republic, the fee is 4.5% of the value of the property.

The Costs of Constructing a Property in The Dominican Republic

Above, we have briefly discussed the buying and selling of a real estate property, however, before we finish, we want to quickly cover the expenses that come with building a property in the Dominican Republic.

After carrying out an internet search and visiting several pieces of land, it’s more than likely that you will have found the perfect property to develop into a residential complex or your dream villa from a real estate company such as Century 21 Perdomo.

From there, our architecture department will advise you on the design of the property of your dreams, making sure it expresses your personality and desires. What’s more, our team will always do our best to adapt to whatever budget you have in mind.

So, should you decide to build a single-story home or a home with multiple levels with pillars, terraces, patios, foyers, pools, gardens… the design possibilities are endless.

By having the construction contract signed, it gives you the security of your vacation home being finished on time. The prices of construction depend on the design and the quality of materials and vary between US$550 and US$950 per square meter or between US$52 and US$88 per square feet.

Additionally, the completed architecture and construction plans represent around 4% of the direct costs of construction.

Contact us today for more information or if you have any doubts – our real estate agents are always at your disposal.