Guide to Buying Real Estate in the Dominican Republic (Governed by Law 108-05)
This practical guide will walk you through the steps of acquiring real estate in the Dominican Republic, ensuring a secure transaction in compliance with current legislation.
-
Sales Agreement
The sales agreement is a formal document signed before a notary that legally binds both parties. It provides a comprehensive and detailed description of the negotiation from the beginning until the purchase price has been fully paid and the property is ready to be transferred to the buyer. It must include:
- Full names and contact details of the parties. If the seller is married, the spouse must also sign.
- Legal description of the property.
- Purchase price and payment terms.
- Seller’s obligation to provide the necessary documentation for the purchase (title deed, tax receipts, etc.).
Documents to be provided by the seller:
- Copy of the title deed.
- Copy of the seller’s ID or passport and their spouse’s (if married).
- Copy of the official topographical survey.
- Proof of payment of the IPI tax or proof of exemption.
If the seller is a company:
- Copy of the company’s articles of incorporation and current commercial registry certificate.
- Certificate from the DGII proving the company is up to date with its tax obligations.
- Copy of the condominium declaration and bylaws.
- Approved construction plans.
- Certificate from the condominium administration proving the seller is up to date with monthly fees.
- Copies of the minutes from the last three condominium meetings.
- Approved construction plans.
- Inventory of furniture.
- Public utility contracts and receipts proving the seller is up to date.
Provisions for breach of commitment and property delivery date.
-
Final Sales Contract
This document, signed before a notary, officially transfers the ownership rights of the property from the seller to the buyer.
-
Calculation and Payment of Property Transfer Taxes
The notarized sales deed is presented to the local office of the General Directorate of Internal Taxes (DGII) for property evaluation. Property transfer taxes and fees amount to 3% of the property’s assessed value.
-
Registration at the Property Title Office
The sale is registered at the corresponding office, and a new title is issued in the buyer’s name. The issuance time can vary from a few days to several months.
Real Estate Purchase by Foreigners and Transfer by Inheritance
There are no restrictions for foreigners regarding the purchase of real estate or its acquisition by inheritance in the Dominican Republic. Inheritance taxes amount to 3% of the estimated value of the estate.
Legal Fees
Legal fees generally range from 1% to 1.5% of the gross purchase price, with adjustments for properties valued below 150,000 USD or over one million USD.
Property Taxes
An annual tax of 1% is applied to real estate owned by individuals, based on the cumulative value of all properties. This tax is calculated for values over RD$9,860,649 (approximately 170,000 USD).
Properties exempt from property tax:
- Property owned by individuals over 65 years old (single property).
- 50% of retirees and foreign pensioners.
- Rural land and agricultural improvements in rural areas.
- Properties covered by special laws (e.g., Law 158-01-CONFOTUR).
Source: Guzman Ariza Law Firm – Notaries/Lawyers
