PF, Legal

Buying property in the Dominican Republic
Fabio J. Guzman Ariza
Guzman Ariza, law graduates


Real estate transactions in the Dominican Republic by the Property Law Gazette No. 108-05 and its Regulations are governed, in force since April 4, 2007. Ownership of property is documented by "Certificates of Title" issued by Title Registration offices.

Steps in a real estate transaction

• Preliminary Steps: Real estate purchases in the Dominican Republic do not usually follow the pattern of a written offer by the buyer to the seller in North America, followed by acceptance of the seller = s written. Instead, after the verbal agreement by the buyer and seller in the price, a binding promise of sale is prepared by an attorney (lawyer) or notary public which is signed by both parties is reached. (It requires Notaries of the Dominican Republic to have a law degree.)

Because of certain peculiarities of Dominican Real Estate Law, it is recommended that the prospective buyer retain a real estate attorney (lawyer) before signing any documents or making a deposit. Depending on the wishes of the parties, the prosecutor (attorney) may proceed with due diligence first, before preparing the Promise of Sale, or alternatively ,, prepare the Promise of Sale first, conditioning the purchase results due diligence to be done within a specified period.

• Promise of Sale: This is a formal document, binding on both parties, and signed by them in the presence of a Notary Public. From a practical standpoint, it is more important than the deed of sale, since usually contains a complete and detailed description of the entire transaction until the time when the purchase price has been paid in full and the property is ready to be transferred to the buyer. A well - drafted Promise of sale must contain at least the following provisions:

(one) Name and full parts data. If the seller is married, the spouse must also sign.
(B) Legal description of the property to buy.
(C) Purchase price and payment terms.
(D) Clause violation.
(And) Date of delivery of the property .
(F) the due diligence required or done.
(g) Representations by the seller and remedies in case of falsehood.
(h) Obligation by seller of signing the deed of sale to the receipt of final payment.

Many attorneys (solicitors) and notaries in the Dominican Republic do not protect the buyer adequately in the Promise of Sale. Among the most common deficiencies are:

(one) The buyer is authorized to pay a large percentage of the sale price, without any security or direct interest over the property. In case of misuse of these funds, the buyer 's remedies may be limited to suing the seller personally. Many condo buyers in Santo Domingo have suffered through this experience in recent years. Generally, the developer uses the funds from buyers, along with a bank loan to finance the construction. The collaterizes bank loan with a mortgage on the property. If the developer encounters financial difficulties or misappropriates funds, the bank forecloses and the buyers lose both their money and Atheir @ property.

(b) Payments are not conditioned to the availability of clear title or the adequate progress of construction. Sales, therefore, can demand payment or place the buyer in default without performing their own basic obligations.

(C) Escrow agents are rarely used. The seller, therefore, has control over the funds paid.

• Writing Sale (AContrato Sale @): 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 transferring ownership from seller to buyer.

In the event of a cash purchase, it is simpler and cheaper to go directly from verbal to the signing of a Sale @ AContrato, instead of taking the preliminary step of signing a promise of sale negotiations.

• Identification and transfer payment and registration tax Authentic Writing sale is taken to the nearest Internal Revenue Office where a request for property appraisal is done. The Internal Revenue Office checks if the seller meets its tax obligations and selects an inspector to do the appraisal. The determination of the amount of tax payable may take a few days or weeks, depending on the availability of the Property inspector.

• Present in 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 in the Registration Office Titles of the jurisdiction where the property is located.

• Certificate of Title: At the Title Registry Office, the sale and a new certificate of title is recorded is issued on behalf of the buyer. The property belongs to the buyer from the time of sale is recorded in the registry. The time for issuing the new Certificate of Title may vary from a few days to several months depending on the Title Registry Office where the sale was recorded.

Due diligence

Many attorneys (solicitors) in the Dominican Republic, do not perform the due diligence required in real estate transactions, limiting themselves in many cases to obtaining a certification on the status of ownership of the Title Registry Office. It often happens that the real estate agent and / or the seller pressure the buyer into a hurried closing despite the advice of an attorney.

To start the due diligence, the seller must provide the buyer or the attorney with the following documents:

• Copy of certificate of title to property.

• Copy of the official survey plan of the property or plat. Under the new Law on Land Registry, the sale of properties without a plot approved by the government (Adeslinde @) can not be entered in the Register, except in the following cases: (1) sales executed before April 4, 2007, which may be registered for a period of two years ending April 4, 2009, and (2) sales of the entire property executed after April 4 2007 (parts sales are not allowed), for once.

• Copy of your ID card (ACédula @) or passport and spouse, if married.

• Copy of the receipt with payment last property tax (IPI) or copy of the certificate attesting that the property is exempt from property tax, and certification from the Bureau of Internal Revenue showing the seller is current with their tax obligations .

If the seller is a corporation:

• Copy of the corporate documentation , including bylaws, up to the date of registration in the Mercantile Registry and resolution authorizing the sale. • Certification of the Bureau of Internal Revenue showing the company is current with their tax obligations, tax Income and asset tax specifically.

If the property is part of a condominium:

• Copy of the condominium declaration.
• Copy of regulations condominium.
• Copy of building plans approved.
• Certification of the condominium administration showing the seller is current with his condo fees.
• Copies of the minutes of the last three condominium meetings.

If the property is a house:

• Copy of the approved construction plans.
• Inventory of furniture, etc.
• Copies of the utilities contracts and receipts showing the seller is current.

Once the documentation listed above is obtained, the lawyer must treat each element from the following list:

• Title Search: A certification should be obtained from the Registrar of Titles appropriate regarding the status of the property, stating who the owner is and whether any mortgages, liens or encumbrances affect it . The buyer should insist that his attorney confirm the results of the Registrar = s search by investigating the pertinent files at the Title Registry Office.

• Survey: An independent inspector must verify that the property to be sold coincides with the one shown on the survey presented by the seller except when the property is located in a previously inspected subdivision. The cases have occurred in which a buyer acquires ownership of a property to a distance from which he or she believes to be bought due to careless work by a previous or fraud by the seller surveyor. The survey should be checked even when the seller provides a government - approved plat.

• Inspection of Improvements: A qualified builder or architect should examine improvements (house, condo) will be sold to confirm that the plans presented are correct and that the improvements are in good condition.

• Permits: The attorney should confirm that the property can be purchased can be used for the purposes intended by the buyer. There are many legal restrictions that must be considered before buying. For example, Law 305 of 1968 establishes a 60-meter Amaritime zone @ along the entire Dominican coastline, measured from the high tide mark inland, which in effect converts all beaches into public property. No building is allowed within the maritime zone without a special permit by the Executive. Also, in tourist areas, there are building restrictions administered by the Ministry of Tourism.

• Possession: The attorney should check that the seller is in possession of the property. = There must be ensured that rights of any kind no squatters. Special precautions should be taken with unfenced properties outside known subdivisions. Fencing them before closing is advisable. If there are tenants on the property, the buyer should be informed that Dominican law is protective of a tenant = s rights and that evicting a recalcitrant tenant is slow and expensive.

• Employees: The seller must pay all employees working on the property their legal severance, otherwise the buyer may find himself liable for the payment later.

• Utilities: The attorney or buyer should check that the seller does not have any outstanding bills to investigate the distributor of adequate food, water, cable companies and telephone.

Taxes and Expenses Property Transfer

Taxes must be paid before filing the purchase at the Title Registry Office. Taxes and transportation expenses of real estate are approximately 3.5% of the appraised value by the government of the property, as follows:

• 3% Transfer Tax (Law # 288-04)
• Minor expenses such as cost of certified check required to pay taxes to the Internal Revenue, various labels and advice in the registry.

Taxes are paid based on the market value of the property as determined by the tax authorities, not the purchase price declared in the deed of sale.

Buyers wishing to lessen the impact of transfer taxes have the option of using a loophole in the law which allows the contribution in kind of assets in companies without paying transfer taxes. For this, cooperation of the seller is essential.

Property Taxes

Real estate in the name of an individual are subject to an annual property tax ( "IPI") of 1% of the appraised value by the government of more than RD $ 5,000,000 pesos, except for lots not built or farms outside limits and properties owned by the city 65 years of age or older, which is registered in his name for over 15 years and has no other property.

If the property is owned by a corporation, no property tax is due. Instead, the corporation must pay a 1% tax on business assets. However, any income tax paid by the corporation will constitute a credit for the tax on assets, so if taxes paid corporate income are equal or superior to taxes on assets due, the company will have no obligation to pay taxes on their assets.

Title Insurance

In the Dominican Republic, as in many countries in Latin America and Europe, the government provides title insurance. The old Land Registry Law established a compensation fund to pay claimants who due, for example, to an error of the Registrar, were deprived of their property. Unfortunately, the funds raised were used by the government for other purposes.

The Law on Land Registry, effective April 4, 2007, has created a new 2% tax on all modes of transport in order to establish a compensation fund. It is also possible to obtain title insurance from private insurers.

Purchase of real estate by foreigners

There are no restrictions on foreigners buying real estate in the Dominican Republic. Formerly, 2543 decree of March 22, 1945 and its amendments required that foreigners obtain prior Presidential approval except in certain cases. 21-98 decreeing January 8, 1998 abolished this regulation and established as the only requirement that the Title Registry Offices keep a record, for statistical purposes, of all purchases made by foreigners.

Inheritance of property by foreigners

There are no restrictions on foreigners who inherit the title of property in the Dominican Republic. Inheritance taxes have been recently reduced 3% of the appraised value of the property. If the beneficiary resides outside the Dominican Republic, inheritance taxes are subject to 50% surcharge, raising the tax rate to 4.5%.

Inheritance of real estate is governed by Dominican law which provides heirs Aforced @: part of the inheritance must go to certain heirs by law. For example, a foreigner with a child must reserve 50% of the estate to that child despite the existence of a will or the law of their country of residence. To avoid the application of Dominican rules of inheritance to the farm, it is recommended that foreigners have real estate indirectly through a holding company.


Real estate agents in the Dominican Republic are not licensed or regulated by the government. There is currently a bill in Congress that can regulate the practice in the near future.


Q: Why the Dominican Republic, and why Las Terrenas?
The: Why the Dominican Republic, why Las Terrenas and why us, DR PARADISE? DR is definitely the most beautiful place in the Caribbean, and DR PARADISE is located in the most beautiful area of the Dominican Republic, Las Terrenas. Las Terrenas has a magical band of 15 kilometers of pristine white sand beaches. The city has over 40 authentic international restaurants, with dishes ranging from exquisite local cuisine to Japanese sushi bars. There is a full - service supermarket within a 5 - minute walk from DR PARADISE`s office, which is located in the city center. While in the area, you can choose your favorite mode of transport, including mini-vans, horse riding, scooters and motorcycles. You can enjoy a wide range of sports such as golf, scuba diving, windsurfing, or tennis, all within walking distance from the city center. The Dominican Republic is known precisely as the "land of dreams". We hope you let enjoy this magical land. Please check our website for an introduction to the Dominican Republic, including travel information, photos, local entertainment, and business opportunities.

Q: Is it possible to obtain a loan on properties Dominican Republic and if so what is the loan to value percentages?
The: Loans popular Banko 80% of the value of the property so expect to pay 20% down. The interest rate at the time of this writing is 9.0% and 13.95% USD PesoWith Identity Card ( green card):

Bank statements last year (not necessary if banking with Banco Popular)
A letter asking for the loan buyer
Met Jaime the bank manager
financial statement of the accountant showing Net Asset
Evaluation by the designated bank appraiser. Accompany bank manager. (+/- $ 150.00 $ AMERICAN DOLLAR)
No Cedula: all the above plus ...

Last income tax
International Credit Report TransUnion ( 'Express Prices are more)
US $ 20.00 US
Europe US $ 180.00
Spain $ 100.00 US
Latin America US $ 125.00
Caribbean US $ 250.00
Q: Are there loans in the Dominican Republic ? Who is the loan? What kinds of rates?
La: Yes, loans are one now happening in the Dominican Republic, and is an increasingly fast and new business concept. Although there are private companies that provide, Chandler Financing,, and Titan Reserve, most used lender is now Banco Popular. Popular Bank will lend 80% of property value. They have an appraiser who works for the bank and dertermines the value of the property. When loans for house or condo purchases you are looking at a 8-10% interest rate.

Q: Are you paying big investors buying large tracts of land or investors doing condo or other developments?
La: Yes, Popular Bank is on earth and this is a case by case basis. People 's Bank is willing to lend to projects for developers, but their most common loans are given to people who have bought land and are looking to borrow for the development aspect.

Q: Is there someone you can talk about lending and how it works?
La: Yes, you can go to the website of the People 's Bank: htm can also contact Micheal, who works at Banco Popular and speaks fluent English at: 809-240-5252.

Q: Why should I use HiFX for my international money transfers instead of my bank?
The: Four reasons why you should use HiFX and not your bank:

You can save money by getting a better exchange rate
A recent survey by The Sunday Times it showed that the main street banks were charging up to 4% more to change your money. 4% does not sound much, but it means that if you were changing $ 100,000 in euros, for example, would pay about $ 4,000 more than if he had used a company like HiFX.

HiFX will transfer your money abroad for free.
If you use your bank may be subject to a number of additional bank charges, including commissions (up another 2% of the amount you are transferring). HiFX not charge a commission and we will send in their free funds!

Fixing the rate of up two years.
Unlike your bank, HiFX will allow you to lock in favorable exchange rates for up to two years to protect their money from adverse currency movements. Always remember to customers who would never agree to buy a property in the US without knowing the final cost. If you agree to buy a property abroad without fixing the exchange rate at the beginning which is exactly the game you are taking. Note that the average off plan property takes two years to be built and you can see the risks involved by not fixing the rates from the beginning.

Excellent customer service.
Buying a property abroad is a major investment. HiFX will provide all the help and expert advice you need in simple, jargon, language. We are used in more than 35,000 people a year and not just for the rich and famous. Only 5% or our customers are rich - most are builders, doctors, middle managers, plumbers, etc ..

Q: What is the population of Las Terrenas?
The: 30,000 people (not including the tourist population)

Q: Where is the Dominican Republic and Las Terrenas? (see map)
La: The Dominican Republic occupies two thirds of the Spanish, located between the Caribbean Sea and the Atlantic Ocean. Last Terrenas is located on the north coast of the Samana Peninsula along the north coast of the Spanish.

Q: How I can reach the Dominican Republic and Las Terrenas?
The: Several major airlines offer regular service in several cities in the Dominican Republic, cities, both in North America and Europe. From the US and Canada, Continental, American Airlines, and TWA have direct flights to the Dominican Republic. Regular flights are available in Europe via Air France, Air Europe, American Airlines, Lufthansa and Iberia. . The DR has 7 international airports, but the three largest are in Puerto Plata, Santo Domingo and Punta Cana Approximate flight times are as follows:

New York - 3 1/2 hours
Toronto - 5 hours
Miami - 1 1/2 hours
Major European cities: 8-10 hours

To Las Terrenas:
We recommend booking a flight small plane / charter Portillo airport, just 4 km east of Las Terrenas. It is only a 30 to 45 minute flight- pleasant alternative to 4 - hour drive down a windy mountain road! Click here for details: Aircraft Charter. We can also book a van for $ US 100 back to Las Terrenas, either Santo Domingo or Puerto Plata (max 8 people).

Contact: click here

Q: Can you use your cell phone in the Dominican Republic?

La: You can use your cell phone of their own country, however, it can be quite expensive. It is better to buy a cell phone here, which can be purchased for about $ 35 US dollar. The minutes are purchased pay as go.¨ You buy phone cards and charge your phone with minutes (from $ 3 USD DOLLAR $ 40). Verizon and Orange are the 2 large companies here in Las Terrenas.

Q: What is the form of government in the Dominican Republic
La: The Dominican Republic has enjoyed more than three decades of stable democratic conditions. The DR is considered a model country in Latin America.

Q: What to do for entertainment in the DR
Sports: The DR offers a wide range of sports, both on land and in water. Some of them include: tennis, golf, squash, polo, diving, snorkeling, horseback riding, fishing (and fishing), windsurfing, sailing, caving, mountain biking, basketball, baseball, and much, much more.

Beaches: Las Terrenas has as astounding 15 km stretch of beach, and all the Dominican Republic has over 400 kilometers of spectacular beaches for your enjoyment.

Gambling: Gambling is legal in the Dominican Republic. The large casinos and hotels offer card games, roulette, slot machines and horse racing and boat racing and cockfighting. Must be age 18 or older to play in the Dominican Republic.

Shopping: The relatively low rate of weight in the Dominican Republic shop a pure pleasure. An impressive array of local crafts, products are available as well as various products were imported from around the world.

Dining: Dominican cuisine offers a unique combination of local spices and cooking styles, with several of its seafood dishes known worldwide. The food speaks for himself give it a try!
For more information on leisure in the DR, click here:

Q: What is the language of the Dominican Republic?
La: Although Spanish is widely spoken in communities Pocket French, Germans and Americans quickly take hold, Spanish is the official language of the Dominican Republic.

Q: After establishing residency can send a single duty free container?
The: After setting the residence you can send a single container load of household belongings "tax - free" .. What it really means is that some things not be subject to duty. Note the packing and unpacking of goods, the cost per $ 100 pounds to send, potential charges while your waiting container on the dock to get discharged, and what customs can say and do after seeing everything. . All this adds up , and it just might be best to leave it behind. These laws change, and have changed since I moved to a container of two years ago. Most of us know, the fees charged by customs vary with the wind. Bringing in motor vehicles, cars, motorcycles, etc. always mean there is almost a must and sometimes up to one. Do your homework on this and hope that the end will be worse than what they say. I just told the story of a couple who came in and imported a pair of jet skis with the duty to be only about $ 15K per jet ski.

Q: What is the climate in the Dominican Republic?
La: The DR has a tropical climate with average temperatures between 18 degrees Celsius in winter and 28 degrees in summer. In the highest areas of the mountains, temperatures can fall below zero in the winter.

Q: Can I get married in the Dominican Republic?
La: Yes . Most of the major resorts in the Dominican Republic offer marriage services. All official documents necessary for marriage must be translated into Spanish before arrival), and a representative will be through the hotel to ensure availability of a judge).

? Q: As a foreigner, I will have to pay taxes on investment earnings in the Dominican Republic
La: No. The tax laws are the same as in the rest of Latin America; you can be sure that the interest accrues in its fully tax - free bank deposits and investments DR.

Q: Can I deposit in US dollars?
La: Yes . Banco Popular offers US dollar and euro accounts.

Q: Are utilities available?
The: Water, electricity and gas services are all readily available..

Q: What are the closing costs associated with the sale of goods?
La: Tax =% 5 selling price. Lawyer fees = rate =% 1. No other closing costs.

Q: How I can get my mail?
La: Mail can be collected either in the office or Western Union.

Q: Would it be possible to work legally in the Dominican Republic?
La: Yes, with a work permit, or working for a Dominican corporation through contract.

Q: Can I buy home appliances have, such as washers, dryers, refrigerators, etc.?
La: Yes, there are several large appliances and furniture stores in Las Terrenas.

Q: Is satellite TV available
La: Yes.

Q: Is there garbage collection?
La: Yes.

Q: Are there supermarkets in Las Terrenas? Are usual western products stored?
La: Yes and Yes There are several large supermarkets in Las Terrenas and store everything you might need..

Q: Can I bring weapons into the country?
La: No.

Q: Is pest control problem? Are exterminators available?
La: No. Yes.

Q: Are there English speaking doctors and dentists in Las Terrenas?
La: Yes.