By Jully Ann

There are no restrictions for foreigners on buying property in the Dominican Republic. The only requirement for ownership is that the Title Registry Offices keep a record of all purchases made by foreigners for statistical purposes. Foreign citizens are allowed to purchase property in the Dominican Republic with the same rights and obligations as a Dominican citizen. Foreign investments in the country are also encouraged with certain incentives.

Foreign Incentives include:

  • Tax-free receipt of pension income from foreign sources, including moving belongings to the country, is guaranteed (Law 171-07 on Special Incentives for Pensioners and Persons of Independent Means).
  • Foreign buyers receive a 50% exemption from property tax
  • Exemption from taxes on dividends and interest income, generated within the country or overseas
  • Foreign buyers receive a 50% exemption from taxes on mortgages, when the creditors are financial institutions regulated by Dominican financial monetary law
  • Exemption from payment of taxes for household and personal items
  • Exemption from taxes on property transfers
  • Partial exemption on vehicle taxes
  • Developers are relieved of all national and municipal taxes for ten years, including the tax on the transfer of ownership to the first purchaser of a property, by Law 158-01 on Tourism Incentive.

What are the basic steps in buying a property in the Dominican Republic?

  1. A “Contract of Sale” or “Purchase Agreement” is made and signed by the parties involved with a required deposit of usually 10%. This will serve as a reservation and will take the property off the market.
  2. Your lawyer will conduct the process of due diligence (title search, overseeing the survey, and obtaining important documents from the seller, including a photocopy of the title.
  3. Closing- completing the payment in the Dominican Republic money and authentication of the “Contract of Sale” by the lawyer/notary
  4. Your attorney will submit the documents to the Registrar of Titles and typically it will be in the new owner’s names within 30-45 days.

List of Costs to consider when buying a property

Notary Fee – 0.25% to 1% (buyer)

Documentary Stamp – 1.30% (buyer)

Real Estate Agent’s Fee: 5-10% (seller)

Costs paid by buyer 4.55% – 5.30%

Costs paid by seller 5.00% – 10.00%

ROUND TRIP TRANSACTION COSTS 9.55% – 15.30%