Looking to buy property in the Dominican Republic? The Caribbean island has a rich history and culture, making it a great destination for those who want to explore the world. It is also an ideal spot for those who want a place for living and relaxing the 365 days of the year.
Should You Consider to Buy a Property in Dominican Republic?
Everyone wants a place to call home, and buying a property in Dominican Republic can give you that satisfaction. There are some reasons why you should consider buying property in Dominican Republic:
- The country has a tropical climate, so it’s always warm year-round.
- The country has the most affordable housing prices in the region
- There are plenty of options to choose from, including condos, apartments, villas, and more.
But the most important reason is undoubtedly economic. In fact, the country is experiencing strong economic growth, which promotes a business-friendly environment, affecting all sectors, especially real estate.
Many foreigners choose to buy an apartment that they use only for a few months and then rent it for the rest of the year to make a profit and passive income. Obviously, these profits increase during the summer season.
Are There Any Property Purchase Restrictions for Foreigners in The Dominican Republic?
According to Guzmán Ariza Law Firm: “There are no restrictions on foreigners to buy property in the Dominican Republic. Formerly, Decree 2543 of March 22, 1945 and its amendments required that foreigners obtain prior Presidential approval except in certain cases. Decree 21-98 of 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.”
Can A Foreigner Obtain a Loan to Buy a Property in Dominican Republic?
Absolutely yes. The first step in looking for a property in the Dominican Republic and opting for a loan is to verify if you can actually apply for a loan. This will make the job faster if you choose a specific property and will also help you in the negotiations with the seller. The mandatory documents that most banks ask for are:
- A copy of your passport and other identification.
- Last tax returns.
- Employment letter if you work for a company.
- Bank reference from your main bank.
Generally, banks will lend you 70% of the value of the property, or even less, it depends on you. This means that you will have to pay at least 30% of the property value upfront.
How To Buy a House in The Dominican Republic?
In this country foreigners can acquire real estate without complications. Besides, buyers can choose between two options: to buy the property in the name of a company resident in the country or under their own name. Here are the steps to buy a house in the Dominican Republic:
- Before taking any action, it is recommended to hire a local lawyer to obtain as much information as possible about the property you’re going to purchase.
- After agreeing on the price of the property, the two parties will sign a promise of sale with a deposit of approximately 10% of the total amount.
- The transaction will take place in the presence of a local notary chosen by the buyer, so the buyer should always bring his lawyer, who will help him draw up the sales contract.
- Usually, the money necessary to purchase the real estate is deposited by the buyer by bank transfer or check in the escrow account of a notary.
- The money is paid to the seller after the title is granted. After the transfer, the property is transferred to the name of the buyer or the company and then registered in the Dominican Property Registry.
- The registration of the transfer of property with the registration of securities apply to pay the following taxes and fees:
- 3% of the sale price.
- 1% of the sale value of the real estate including constitution and cancellation of a mortgage, modification of the title and duplicate.
The new real estate registration law guarantees a transparent system for buying, selling and registering real estate in the Dominican Republic. This fee can be paid by bank transfer or certified check.