Punta Cana and some other big areas of Dominican Republic have the largest and fastest growing economy, solid tourism and continuous growth, direct flights from 26 countries, multilingual surrouding, beautiful climate and nature, white sand coastlines, fast developing infrastructure, it is a very desirable place to retire.
Every day, more individuals purchase a second house as a holiday home or an investment here. Owning a home in Dominican Republic is an excellent choice for people considering living there full time.
The Dominican Republic’s east coast has seen a surge in real-estate development in recent years, with new residential complexes, hotels, and trade and business centers being built.
Moreover, renting your home on a daily basis and using it with your family for holiday time without paying for a hotel is a great strategy.
So, the country is also a perfect option for investors wishing to buy property to rent it out. Thus, Punta Cana is a smart to invest, it is favourite destination for many investors.
The fundamental advantage of faraway exotic nations such as Egypt, Turkey, Spain, Bulgaria, Greece, Croatia, Montenegro, Thailand, and others is that they are outside of the main tourist flow. It is the calm luxurious reserves.
The Dominican Republic is one of these countries, a natural paradise on a small Caribbean island.
The Dominican Republic’s real estate market is diverse and provides a wide range of price categories. You may buy a house here for $70,000 US dollars; there is no maximum limit; it all depends on your creativity and finances.
The Dominican Republic’s property locations are very diversified. The island’s northern coast, which has a distinctive gentle ocean, the east coast, which is famed for its endless white beaches, and the southern coast, which is bordered by the warm Caribbean Sea and is home to half of the country’s population, are all worth seeing.
Many people consider the advantages to be as follows – Summer all the year around, Ecologically clean environment, The sea is clear, and the beaches are private,
Development of the infrastructure, Unique bright southern nature, The ideal climate,The cost of land is still at a reasonable price, Various profitable construction options, Great Investment opportunities.
Free or special economic zones — areas with a unique legal status and advantageous economic circumstances in order to attract both domestic and international enterprises.
Because of the following features, it is an appealing asset for both local and foreign investors in Dominican Republic – Strategically favorable geographical location, Political and social stability, Active labor market and skilled workforce, friendly attitude towards foreign investment, Modern infrastructure projects.
At current time, there are more than 533 enterprises in the Dominican Republic’s free zones, which are divided into 47 industrial parks. The majority of them (47%) are in the country’s center and north, with 25 percent -16 percent in Santo Domingo and the surrounding area, and 15 percent in the south and east. There are around 112,500 individuals employed in this sector of the economy, with roughly equal numbers of men and women.
The Dominican Republic’s exports of commodities are dominated by products produced in these zones, which account for over 70% of the country’s total exports.
About a quarter of the companies in Dominican Republic’s free zones are in the textile industry, and about 20% are in the field of providing various types of services to companies outside the Dominican Republic, such as data entry and processing, software development, phone customer support, and the sale of various goods and services over the phone. Cigars and other tobacco products, shoes and leather goods, electrical appliances, jewelry materials, medicinal and pharmaceutical products, building materials, chemicals, and other items are also manufactured in Dominican free zones.
Any foreign citizen can buy, own and administrate the real-estate property with the right of inheritance in Dominican Republic. Only a passport and one more identity document should be presented. The only requirement for ownership is that the Title Registry Offices keep a record of all purchases made by foreigners for statistical purposes.
The most crucial parts are selecting an object, inspecting it for encumbrances, drafting and negotiating a contract, and having the contract verified and legalized by a notary public.
All of the operations can be completed in one week if necessary.
Then there’s public registration, which doesn’t need the presence of a buyer. The associated costs account for around 4% of the property’s cost.
When a buyer finds a property they want to buy and the seller accepts their offer, the buyer should employ a respected local law firm to do a title search and ensure the property is free of legal concerns.
The lawyer creates a purchase agreement that both parties (buyer and seller) must sign once the law firm determines there are no legal difficulties.
The purchase agreement will include the specifics of the transaction, such as the agreed-upon price and payment terms. The buyer will often be required to pay a 10% deposit to secure the property.
In order to complete the deal, the buyer will need to employ a local notary. The buyer will then place the remaining cash in an escrow account with the notary, which will be held until the property’s title is transferred to them and documented in the Dominican title registry.
Your attorney will file the paperwork with the Registrar of Titles, and it should be in the name of the new owner in 30-45 days.
Foreigners have the option of taking out a mortgage loan in the most of Dominican banks, which are secured by the property they have purchased.
The mortgage amount can be up to 80% of the real-estate object’s assessed value.
Besides, most banks allow foreigners to open bank accounts with current and valid ID.
There are two types of property taxes in the country – purchase taxes and yearly taxes, paid to the government.
Normally, Transfer Tax Procedure (Purchase Tax) is as follows –
3% of the purchase price of the property (as in the sales contract). Property purchased by the purchase of company shares, then there is a 1% tax added. Tax must be paid within six (6) months of signing the sales contract. Usually done by the lawyer who was present in the time of closing the sale.
A 1% annual tax is assessed on real estate properties owned by individuals, based on the cumulative value of all the properties as appraised by government authorities. Properties are valued without taking into consideration any furniture or equipment to be found in them.
For built lots, the 1% is calculated only for values exceeding 7,710,158.20 DOP (about $150,000). For unbuilt lots, the 1% tax is calculated on the actual appraised value without the exemption.
The real estate tax is payable every year on or before March 11, or in two equal instalments: 50% on or before March 11, and the remaining 50%, on or before September 11.
If the property cost is less of that limit, you will not have yearly tax.
Although there is no standard structure for a contract of sale, it must be written and include the parties’ intent to sell, a thorough description of the property, the contract’s topic, the purchase price and mode of payment, and certified signatures.
All contracts must be drafted in Spanish, according to the law. Furthermore, in the event of an allegation, all documentation pertaining to the sale transaction must be translated into Spanish and presented to the court as proof.
The contract’s format is determined by the parties’ unique requirements. Because of the complexities of real estate transactions, all parties should check with their lawyers before signing the form, since changing anything after signing would be difficult, if not impossible.
In addition, if the buyer is not a resident, he or she must choose the best form of ownership for his or her goals and interests.
Cases involving the preservation of firm assets, aspects of state taxes, aspects of taxes on profits from sales, and privacy should all be considered.
If a real estate agent and lawyer collaborate on the contract, the buyer can save a lot of money on taxes on the transfer of property rights and the procedure of getting the Title Certificate.
The new property legislation (108-05), which took effect on April 4, 2007, drastically altered the Dominican Republic’s real estate rules. The necessity of disengagement for all real estate transactions – buy, sale, mortgage, condo, etc. formation – was one of the main factors of modernity.
Disengagement is a legal procedure that separates a section of land within a site from other parts of the same site. To put it another way, the operation converts disengagement conditional title, which gives the right to possession of a vast area of land inside the site, into final title, which guarantees individual ownership of the property.
Currently procedure consists of 3 phases: Inspector part – Certified inspector measures the property, makes a report and gets the approval. Legal part – The process moves to the Supreme Court of the Land. During this period, neighbors or third interested parties may object to the process of disengagement. Each party shall be represented by an authorized person. The registration part – The judge’s decision is driven by the Registrar of Titles, with the abolishing of the old and issuing of a new final title.
Property registration under the new legislation – The Dominican Republic was finally able to close the gaps in the regulation of real estate operations with the entrance into force of the new Law 108-05 on real estate registration.
One of the advantages of the new legislation is that it aids in the registration of moveable and real estate transactions by introducing a contemporary system of measuring and demarcation and improving the operation of the administrative institutions in this area. This new law accomplishes the aforementioned goals while remaining true to Torrance’s core structure.
What is the procedure for changing the title certificate? A new Certificate of Title was introduced in early 2008. It’s taken aback by its dramatic metamorphosis. However, it now seems to be a regular piece of paper, with practically innumerable codes and a system of signals certifying its legitimacy. Despite its new ” Look ” certificate, the Dominican Republic’s primary and most essential legal document relating to property rights is still the ” Look ” certificate.
The main difference is that the Title Certificate now has a specific purpose: to identify the property and its lawful owner. Financial and legal limits that may impact the property are no longer included in the certificate and have been moved to other registration authorities.
Temporary Certificate of Title – One of the law’s unique features is that it allows condominiums under construction to receive a temporary certificate of title. The legislation permits you to utilize a mortgage for each condominium unit individually.
However, the idea of employing a Temporary Title Certificate raises a number of problems about the services it provides, the authorities in charge of certificate-related activities, control methods, and transmission options.
We advise you to use Villa Red,S.R.L services due to several reasons.
We make the buying process from afar as smooth as possible.
We are partnering with the most trusted real estate developers.
We provide you with lots of additional services like property management, rental assistance, assistance in unit selection, etc.
If a customer buys a ready-to-use object, we not only help to choose the best of the best variant, but also provide full legal assistance and guidance on financial issues.
One can use Regular Cash Payments or Financing while buying any property.
Regular cash payments are often offered today and the plan depends on the total cost of property and the type of property – already built or under construction project.
Typical payment plan from the owner may consist of Reservation Fee – to reserve the propery while the contract is done. Up to two weeks, for instance. Reservation fee can be expressed as 10% from the price. At the moment of signing the contract, 30% of payment is required. And another 60% the buyer will pay in about a month.
Typical payment plan from the developer looks like this – Reservation fee may vary from 1,000 USD to 5, 000 USD. While signing a contract, the buyer completes 10%. Another 30% is to be paid while construction period. And 60% while the delivery of property according to the scheduled date.
Sometimes, a combined way of payment can be used as well. For example, reservation fee – 1,000 USD. While signing a contract – 15%, another 35% to be completed while construction. And 50% of financing.
Thus, one can take Bank Financing up to 15 years with 30% of down payment and from 9% of interest rate. The conditions may vary depending the bank you prefer.
Any property with clear Title can apply for financing. The list of documents to be submitted is:
Additionally can be required:
Updated financial statements, medical examination forms, bank references.
Either you are going to rent a home in Dominican Republic or to prepare rental agreement for your tenants, you should know the basic issues.
Rental contract is a legal document written in Spanish or Spanish/English languages. Introduction part includes the personal information, address, residence area, ID numbers of two parties: property owner and tenant.
The principal part contains various paragraphs describing the rental home location, its condition, monthly payment amount and payment conditions, legal rights and obligations of both parties, duration and extention of the contract. At least one or sometimes two security deposits are required. The money transfer/transaction methods can be agreed. Additional services, like Maintenance Fee/Internet and Cable can be included to the rental payment. Electricity, gardening or cleaning services are to be paid apart.
The rental agreement can be of short (less 6 months) or long term (6 months -1 year). And may be renovated accordingly.