The Dominican Republic is a warm welcoming country if you want to invest in real estate. There are no restriction placed, if you want to buy a country here. In fact, Government enjoys benefit of foreigners investing as it positively contributes to the country’s development. There are also no restriction on buying beach-front assets.
You may hold the title in your own name or in Dominican Republic company name, while the later one has an advantage in saving tax, such as lower closing costs and taxes.
Steps in the purchase of Dominican Republic property
- Buyer and seller sign a “Contract of Sale” before a notario who authenticates it. Notaries in the Dominican Republic are required to have a law degree. The Contract of Sale contains the legal description of the price, the property, and the conditions of sale.
- The funds for property purchase is deposited by the buyer to notario via electronic bank transfer or check to the trust account. The funds are then transferred to the seller from the trust account of the notario after the title is cleared.
- The appropriate taxes are then paid to the nearest Internal Revenue Office by authenticated Contract.
- The Contract of Sale and the Certificate of Title of the seller are deposited at the Title Registry Office for the jurisdiction where the property is located, and the sale is recorded.
- Certificate of Title in the name of the buyer, or the company is issued by The Title Registry Office, and cancels the old Certificate issued previously to the seller.
The time span vary from a few days to a few months depending on the Title Registry Office where the sale was recorded.
Closing costs and taxes
For taxes and closing costs you may have to pay approximately 7% of the sale price. This amount includes a transfer tax , document taxes, special stamps for registration and legal costs. It must be paid prior of filing the purchase at the Title Registry Office. Ask your attorney for advice about forming a corporation, to take advantage of a escape clause in the law that allows you to buy real estate through a Dominican Republic corporation, which reduces the tax burden considerably.
Property taxes depend upon the value of the home you purchase. If you purchase a residential property worth about US$150,000 or less, then you pay no annual real estate taxes. If the home is worth more than that amount, you pay 1% of the value over and above US$150,000.
It will be best to hire a reliable and experienced attorney. You can ask your sale counselor for list of attorneys. So investing in Dominican Republic is worth an investment and to enjoy a great retirement life with your family, DR is a place to live.