Investing In Dominican Republic

Purchasing a property can be the most exciting and joyful experience as long as you choose the correct advisor. This for we have prepared an Investment guide for you to have the basic information of how purchasing a property in the Dominican Republic works.

 

Only 5 Step to Invest In Dominican Republic

1.- Can you buy a Real Estate in Dominican Republic without being a citizen?

  • Any foreigner has the same right as a local person to purchase a property in the Dominican Republic. All you must have is two (2) original identifications with pictures.

 

2.- Find the right Real Estate Agent

  • Real Estate is an industry that is growing constantly. There are many agents available to choose from but certainly you want to work with a reliable one.

   

3.- Choosing  the right property and legal advisors

  • The property not only should be in good location, great condition and well priced, but most important is to be legal and have an original title free of encumbrances and ready to be transferred to your name after closing. This for you must choose a lawyer to represent you and verify that the status of the title is original and free of any encumbrances. 

  • Because our business relies on your safe investment, buying a property through CONTI& co helps you to find the right lawyer to represent you. We work with the two most reliable lawyer firms in Sosua and Cabarete area. 

 

4.-  Presenting a correct offer

  • Once you have found the right property and the lawyer to represent you, it's time to present a formal offer that must include all the important conditions that will help to have a smooth transaction.

  • Offers are always presented with a down payment of minimum 1% of the purchase price. In the event an agreement between parties was not reached, funds will be transferred  back to the buyer.
     

5.-  Promise Of Sale (POS) & Sales Contract (SC)

  • After the offer is agreed by both parties, the remaining funds are available in the Notary's Escrow account, then a promise of sale or sales agreement, indicating all the details, must be signed in front of Notary to validate the agreement. Once this step is reached, congratulations, the property is ready to welcome you!

 

Yes!, it can be as simple as this if you choose the right team to work with. Feel free to contact us for the step-by-step closing details and why we would be a great option to represent you.

 

Taxation On Real Estate In Dominican Republic

Real Estate Transfer Tax
 

  • Transfer of real estate ownership (title) is 3% which is paid based on the market value of the property determined by the appraisal done by the DGII, not on the purchase price stated in the sales contract (SC). The sales contract cannot be filed at the Title Registry Office without paying this tax. The transfer tax must be paid within six months of the date the Sales Contract was legalized by the Notary. If the Sales Contract and the 3% tax are not deposited within the 6 month, it is subject to fines.

  • 3% Transfer tax of real estate ownership is a one (1) time payment. This is not related to the yearly property tax.


Yearly Property Taxation
 

  • Properties owned by individuals with value exceeding 6,858,885.00DOP (150,000U$D) pay 1% of the actual appraised value minus the exempt value. Properties are valued without taking into consideration, furniture, upgrades, appliances or equipment included in the sales price. It is based on house size and location.

  • Example: 
    250,000U$D Purchase price
    225,000U$D Assessed value
    - 150,000U$D tax exemption
    75,000U$D
    x 1% = 750U$D tax per year

 

  • For un-built lots, the 1% tax is calculated based on the actual appraised value without the exemption.

  • The real estate tax is payable every year on or before March 11, or in two equal installments of 50% on or before March 11, and 50% remaining, on or before September 11. The amount of the exemption may experience adjustment due to annual inflation.


The following properties are tax free:

 

  • Farm properties.

  • For build lots that are assessed below 6,858,885.00 DOP (about 150,000U$D).

  • Home owners that are 65 years old or older and has no other property registered under his/her name. To apply must have Cedula or Residency.

  • Properties registered under companies which pay a separate tax based on their company assets.


Company Assets Taxation
 

  • All Companies pay 1% annual tax based on assets. However, all amounts taxed on assets paid by a company can be applied as a credit toward its income tax obligations.


Inheritance Taxes
 

  • Irrespective of the nationality or domicile of the deceased (Art. 1 of Law #2569 of 1950), Dominican or foreign, whose last domicile was in the Dominican Republic is subject to Dominican inheritance tax of 3% of the value of the estate.

  • The Law #288-04 helps to lower the inheritance tax of 3% of the value of the estate, after deductions as determined by the tax authorities such as medical, funeral, as well as outstanding debts and mortgages, are some of the allowed deductions.

  • Inheritors must file a declaration with the tax authorities within 90 days of the death of the decedent. An extension of an additional three and a half months is possible in complex cases (Art. 26 of Law #2569). Delays in filing are subject to a 2% per month penalty, up to a maximum of 50% of the tax owed (Art. 9 of Law #2569).