The Buying Process Explained

The 10 Easy Steps To Buying Property In The Dominican Republic

There are no restrictions on foreigners purchasing real property in the Dominican Republic.

The real estate market is organized very similarly to north America with land titles being registered in the owner’s name which in turn gives you full legal ownership and protection. Many countries in the Caribbean and Central America including Mexico have severe restrictions on purchasing property, but not the Dominican Republic.

#1 Choose a Property

You tour the area and view properties with a trusted real estate agent to explore your best options. You decide on a property of your dreams that best suits your needs.

#2 Offer of Purchase

Your realtor prepares an Offer of Purchase & Sale Agreement and presents it to the seller or developer based on your instructions incorporating a suggested offer price and any conditions you want to include.

#3 Accepted Offer

You and the seller agree on a price and the conditions described in the Offer of Purchase & Sale Agreement.

#4 Deposit

You wire the deposit (usually 10% of the purchase price) to your lawyer’s trust account.

#5 Due Diligence

Monies are held in trust until the completion of the lawyer’s due diligence on the property (clean title, condo fees, liens, review of rules and regulations, rental restrictions, etc.) with a specified time period. The Offer for Purchase & Sale Agreement may be adjusted depending on the lawyer’s findings during the due diligence period.

#6 Contract of Sale / Promise of Sale

Once the deposit has been received by the lawyer, due diligence has been completed, the buyer and seller agree on all terms, a binding Promise of Sale is prepared by the lawyer which is signed by both parties in the presence of a Notary Public. The Promise of Sale is prepared by the property lawyer in Spanish and an English version will be provided to you. It generally contains a complete and detailed description of the entire transaction up to the time when the purchase price is paid in full and the property is ready to be conveyed to the buyer. Promise of Sale should contain at least the following provisions:

(a) Full name and particulars of the parties. If the seller is married, the spouse must also sign.

(b) Legal description of the property to be purchased.

(d) Default clause.

(e) Date of delivery of the property. (f) Due diligence required or done.

(g) Representations by the seller and remedies in case of misrepresentation.

(h) Obligation by seller of signing the Deed of Sale upon receipt of final payment.

#7 Deed of Sale / Acontrato de Venta

This is the final contract that is used to convey the property from the seller to the buyer. This is also a formal document binding on both parties and signed by them in the presence of a Notary Public. It is used primarily for the purpose of conveying the property from the seller to the buyer. In most cases of resale properties and especially cash purchases, the lawyer will go directly from the Offer of Purchase & Sale Agreement to the preparing the ‘AContrato de Venta’ and forgo the preliminary step of signing a Promise of Sale.

#8 Balance of Funds

Buyer sends the outstanding balance of the monies to the lawyer’s trust/escrow account before final closing.

#9 Filing at the Registry of Title

Once the property has been appraised and taxes paid, the Deed of Sale and the Certificate of Title of the seller are deposited, along with the documentation provided by Internal Revenue, at the Title Registry Office for the jurisdiction where the property is located.

#10 Welcome Home!

The buyer receives ownership of the property, land titles is notified and title changes hands. In the case of a company then a new company is established with the buyers owning the shares, or in the case of a resale, the share ownership is transferred to the buyers upon completion of the transaction

Taxes & Fees

Real Estate Commission

Real estate fees and commissions are paid by the seller or developer, not the purchasers.

Property Transfer Taxes

Taxes must be paid before filing the purchase at the Title Registry Office. Taxes and expenses on the conveyance of real estate are approximately 3% of the government-appraised value of the property, not on the purchase price stated in the deed of sale.

Legal & Professional Fees

Your real estate lawyer will charge you a percentage of the purchase price of the property. Generally, fees are 1% of the purchase price. This amount includes all disbursements, due diligence, and will convey the title into your personal name or corporation.

Annual Property Taxes

Properties held in the name of an individual are subject to an annual property tax (“IPI”) of 1% of government-appraised value in excess of 6.5 million pesos (some exceptions and tax exemptions apply).