Updated 2 months ago

Procedures regarding the purchase of a real estate property in the Dominican Republic can be quite complicated, especially for someone new to the country and not fluent in Spanish. Find out how to go about buying property in this article.

Can foreigners buy property?

There are no restrictions on foreign ownership of property. Residents and non-residents enjoy the same rights as citizens of the Dominican Republic when it comes to buying property.

All real estate transactions are determined by law, in this case, the Property Registration Law No. 108-05 and its Regulations, which has been in force since April 4, 2007.

What is the first step?

The first thing to realize is that buying property in the Dominican Republic might be very different to buying property in your home country. For example, there is no concept of a written offer, and instead, you find the property you like and the first thing you have to do is check out the legal situation of the property, as it is not uncommon for people to sell property which is not theirs to sell.

There are two main checks to carry out. The first one is to head to the local titles’ office and check that the person selling the property is the actual owner, and see if there is a mortgage or liens on the property. If there is, it will be recorded on the back of the title deed.

The second check is to go to the taxation office, Impuestos Internos, and check that all taxes relating to the property have been paid. While you can, of course, do this on your own, most people appoint a lawyer to carry out this task.

You also need to verify if an official government demarcation survey has been carried out, known as a deslinde.

Agreeing on the price

The price is agreed on verbally between the buyer and seller, which may be affected by any unpaid taxes or liens, and then a Promise of Sale Contract is drawn up by the seller’s attorney and signatures witnessed by a notary public. At this stage, it is usual for a 10% deposit to be paid. Please note that the buyer normally will cover the costs of the seller’s attorney.

Promise of sale contract

  • Full name and particulars of all parties. If the seller is married, the spouse also must sign.
  • Full legal description of the property to be purchased.
  • Purchase price and payment terms. Note: often the payment terms can be flexible, so there can be some form of owner financing.
  • Default clause.
  • Date of handing over of the property.
  • Due diligence still required to be done, in the case that the checks of title and taxation have not yet been carried out.
  • Remedies in the case of misrepresentation.
  • Obligation by the seller of signing the Deed of Sale upon receipt of final payment.

Deed of sale

This is called the contracto de venta and is signed by both parties in front of a notary public, and is used to convey the property from the buyer to the seller. In some cases, the Promise of sale contract does not happen and the parties move directly to the Deed of sale.

Appraisal for taxes

The authenticated Deed of sale is then taken to the nearest taxation office where a request is made for the appraisal of the property. This is necessary to find out if the new owner will need to pay what we call the annual rich tax. If the home is worth above RD$6.5 million (around US$135,000), the property tax of 1% of the value has to be paid each year. In addition, there is a one-time fee of 3% of the value of the property known as the property transfer tax. The amount of tax to be paid is determined by an inspector, and the time taken to do the inspection depends on the inspector’s workload, which can take a few weeks.

Filing the title deed

Once the tax has been paid then the title deed is filed, to be changed into the new owner’s name, and the new certificate is issued. This will normally take a few months, although you can pay an additional amount for the VIP service which is faster. However, from the day the title is filed, the property is said to have transferred ownership.

What is a deslinde?

Under the new Property Registration Law, the sale of properties without a government-approved demarcation, known as a deslinde cannot be recorded at the Title Registry, except in the following cases:

  • Sales which happened before April 4, 2007, which may be recorded during a two-year period ending on April 4, 2009.
  • Sales of the entire property which happened after April 4, 2007 (sales of portions are not allowed), just once.

This means that if the property has been sold on more than one occasion since April 4, 2007, there will have to be a deslinde done before title registration can take place. This costs around US$1500 or more, depending on the size of the plot.

 Important:

Buying a home in the Dominican Republic can be straightforward, but for someone not used to the country, there can be pitfalls. Here are a few hints and tips to bear in mind.

  • Before purchasing a property, check which electrical circuit it is on – A, B, C, or D, as the former has electricity 24 hours a day but the other circuits have less, with a D circuit having electricity only around 8 hours a day. If you are not on an A circuit, you will need a backup system such as a generator or an inverter.
  • Check the water situation. Is it a cistern, a well, or is there continuous street water? How often does the water go off?
  • Is there good cellphone coverage and internet? Which providers work well and which don’t?
  • Ensure that your lawyer checks that there are no unpaid bills for water, electricity, phone, or internet.
  • Is there rubbish collection? This service is not available throughout the country and if there is none, you will have to find a way to dispose of your own.
  • Is the title deed in the name of the people who now own the home? Given the fact that you have to pay 3% when you transfer the title, many people do not bother to do so when buying a home, and you may find that you are buying from the people who owned the home before the current owners. This is not necessarily a problem, as long as you can find the previous owners.

 Useful links:

DGII
Supercasas
Corotos
Real Estate Law

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