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Buying in Dominican Republic
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It’s Easy To Buy
In the Dominican Republic foreigners can easily purchase property.
In 1998, a law was written allowing foreigners to buy property in the Dominican Republic with the same rights and obligations as a Dominican citizen. The only requirement is that the Title Registry Offices keep a record, for statistical purposes, of all purchases made by foreigners. Acquiring property here is straightforward, but, still, foreigners purchasing property anywhere in the world outside their native countries need to exercise extra caution. The realtor and the notario (real estate attorney) you work with should be able to help you through the process. It never hurts to hire your own attorney, but it is common for realtors to recommend attorneys they feel comfortable with. The attorneys, in turn, recommended who they believe are the island’s best real estate brokers. We trust their judgment but it never hurts to seek your own resources and advice.
Real estate purchases in the DR work a little differently than in the U.S. Instead of tendering a written offer, you first negotiate and reach a verbal agreement on the price with the seller. Then, a binding “Promise of Sale” or “Option to Purchase” is prepared by an attorney and signed by both parties. At this time, the deposit or advance payment is normally made.
Four Simple Steps To Ownership
1. 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 property, the price, and conditions of sale.
2. The authenticated Contract is then taken to the nearest Internal Revenue Office for payment of the appropriate taxes.
3. 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.
4. The Title Registry Office issues a new Certificate of Title in the name of the buyer and cancels the old Certificate issued previously to the seller.
The time span from the filing of the Contract of Sale to the issuing of the new Certificate of Title may vary from a few days to a few months, depending on the Title Registry Office where the sale was recorded.
Taxes and Closing Costs
Expect to pay approximately 5% of the sale price for taxes and closing costs. This amount includes a transfer tax of 4.48%, document taxes, special stamps for registration, and tips. Taxes must be paid before filing the purchase at the Title Registry Office. Many buyers, with the complicity of their attorneys or notaries, have been known to evade paying part of the transfer tax by lowering the true purchase price in the Contract of Sale. This is common practice in the DR and it has become so blatant and widespread that the tax authorities have now set a minimum value for properties in some locations.
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