Owning a Property in the Dominican Republic
1) How do you own property – in your personal name or in a corporate name?
You can choosr either way. No matter which way you own property, personal name or corporate, you own that
property outright with title, fee simple.
2) If a property is owned in a corporate name, can it be assinable?
Yes, you can transfer share of the corporation to a new ownwer. Note: the new owner can be another corporation
or trust.
3) Will i pay property tax on a yearly basis? How dos the goverment determine the taxable amount?
Yes. Property tax is called IPI tax. It is approximately 1% of the assessed value of the home that is determined
by the amount of square meters of the house and its appraised value. If the property is owned by the corporation,
the applicable tax is tax over the assets (impuesto sobre activos) but a company must pay the higher value of
either the 1% tax over assets or 25% over its net income. Companies that only own property are generally subject
to the 1% tax over its assets and that asset is normally the real estate.
4) Do you get a deed at closing? is there a transfer tax?
if the transaction is a transfer of real property, the seller must provide you with the deed of title duplicate of
owner (certificado de titulo duplicado del dueno) along with other documentation required to record the transfer at
the land registry. Before you record the transfer of title you most pay your transfer taxes (3% of the value of the
property) at the department of internal revenue which issues a receipt evidencing you have paid. if the transaction
is a transfer of shares then the seller must provide you with the shares and the deed of titledulicate of owner.
5) Do you need title insurance?
It is nat customary but it is available through Las Americas Title Sevices and other agencies.
6) What are typical closin cost? How much is the transfer tax?
Closing cost will be your attorney’s fee. The transfer tax is 3% of the value of the property.
7) Does financing impact the closing?
Sellers do not require local financing. Banks will require appraisals in order to approve the loans and in financing
has been pre-approved, it should no impact the closing.
Is there a due diligence period where tou can inspect the property before putting down a deposit?
It is common in the DR to perform due diligence on the property. Purchasers want to make sure the property is free of
liens and encumbrances, the seller is up to date in payment of property tax, that the surface area of the
property is what the seller says it is, etc.
9) How do you apply for tax exemptions?
An attorney can find out if you qualify for tax exemptions and how it is paid.