Real Estate Closing Costs in the Dominican Republic

 

Legal Fees

  • A 1% legal fee will be charged by your real-estate lawyer based on the purchase price.
  • To set-up the Corporation is $1,000 US. To legally conduct business in the Dominican Republic you need to have a corporation or your residency. If you decide to earn rental-income on your Dominican home this is considered conducting business and a corporation is required.
  • The seller pays for real-estate commission fee

Taxes

Land Transfer Tax

  • A 3% tax is assessed on any transfer of ownership of real estate.
  • The transfer tax is paid based on the market value of the property as determined by the appraisal done by the DGII and not on the price of purchase stated in the deed of sale.
  • The deed of sale cannot be filed at the Title Registry Office without paying this tax. The transfer tax must be paid within six months of the date of the deed of sale. Noncompliance is subject to fines

Property Taxes

  • A 1% annual tax is assessed on real estate property owned by individuals. (This is based on the value of the property as appraised by the government authorities). Generally properties are valued based on the assessed value which is normally lower than the market value. Furniture and equipment found in the property are excluded from the valuation.
  • For built lots, the 1% is calculated only for values exceeding RD$6.5 million pesos or ($133,000 US)
  • For unbuilt lots, the 1% tax is calculated on the actual appraised value without the RD$6.5 million pesos ($133,000 US) exemption.
  • Property Tax must be paid every year on or before March 11. It can also be paid in two equal installments: 50% on or before March 11th, and the remaining 50%, on or before September 11th.
  • The RD$6.5 million pesos or ($133,000 US) threshold is adjusted annually for inflation
  • Properties that are Exempt from tax are 1) Farm properties 2) Properties whose owners are 65 years old or older, who have owned it for more than 15 years and have no other property in their name 3) Properties subject to the Tax on Assets

**Reference from Guzman Ariza, Attorneys at Law www.drlawyer.com

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