Procedures regarding the purchase of a real estate property in the Dominican can be quite complicated. Find out more in this article.
Over the years, many expatriates in the Dominican Republic have managed to purchase a real estate property there. This might indeed be an ideal solution if you intend to make a long stay in the country. First of all, you are advised to hire a specialized lawyer once you have spotted a property which interests you. You should also inquire on related regulations and conditions before proceeding.
Procedures regarding the purchase are quite complicated. Therefore, the lawyer should take care of various issues: make sure that the sales contract has been drafted properly, that all necessary surveys have been conducted before the deal's finalization, that the property's characteristics are similar to those mentioned in the contract, as well as the payment conditions.
The contract must be notarized so as to certify that both parties, that is the buyer and the seller, have signed, and that all the key aspects of the negotiation have been honored by both. It is best to avoid any disagreement which could require judicial intervention.
Steps to follow
In general, you will proceed with the transaction as follows:
- a review of the property's legal status
- research on the property title so as to ensure its authenticity,
- contact the Certification of the Dirección Nacional de Impuestos Internos (DGII) to make sure that the property does not have outstanding debts with the IRS or has been mortgaged to any third party
- have detailed information on laws regarding the construction zone
- inspection of the property, whether it already consists of a building or not, and in the case of a pre-sale, clarify the property's dimensions and boundaries.
During the transfer process, you will need the following documents:
- a legalized final sales contract
- the property title
- Minutes authorizing the selling company representative (if any) to produce the deed, and sign documents on its behalf
- a copy of your identity card or passport, whether or not you are physically present, or the Registro Nacional de Contribuyentes in the case of a company
- a real estate tax payment certificate.
Finally, you are required to pay a transfer tax which is equal to 3% of the property's total value, plus an additional tax of 20 pesos. In general, transfer fees are equal to 3.1% of the property's total value.
Moreover, properties whose value exceeds five million pesos are subject to an annual tax of about 1% in excess of the specified amount. However, more than 65 years old properties, as well as rural properties, are exempt from tax.
Foreigners in the Dominican Republic are eligible to a title guarantee. This warranty will protect you in case of irregularities, hidden defects or in case of your bank's bankruptcy.