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Dec 21, 2015

Buying costs are high in Dominica


How high are realtors’ and lawyers’ fees in Dominica? What about other property purchase costs?

Transaction Costs

Who Pays?
Alien Land holding License 10.00% buyer
Legal Fees 3% (+15% VAT) buyer
Judicial Fees 2.50% buyer
Assurance Fund Fee 1.00% buyer
Stamp Duty 4%
2.5%
buyer
seller
Real Estate Agent´s Fee 5.00% seller
Costs paid by buyer 20.95%
Costs paid by seller 7.50%
ROUNDTRIP TRANSACTION COSTS 28.45%
See Footnotes
Source: Global Property Guide

Dominica ocean view propertiesHow difficult is the property purchase process in Dominica?

For foreigners, the Alien Land Holding License Regulation Act, No. 17 of 1995 of the Laws of the Commonwealth of Dominica, provides for the issuance of Alien Land Holding License.

  • An alien may hold less than one (1) acre of land for residential purposes or less than three (3) acres of land for commercial purposes without obtaining an alien land holding license. However, the alien land holding license fee of 10% of the value of the land is still payable.
  • An alien may not hold more than one (1) acre of land for residential purposes or three (3) acres of land for commercial purposes without first holding a license;
  • On acquiring a license, the applicant must pay a fee equivalent to 10% of the market value of the land to government

Citizens of the Organisation of East Caribbean States (OECS) do not need to acquire an alien land holding license. OECS-member states are Antigua and Barbuda, Dominica, Grenada, Montserrat, St. Kitts & Nevis, St. Lucia, and St. Vincent & the Grenadines.

Property buyers also need to present the following when applying for an alien land holding license:

  1. Financial Record or Bank Statement
  2. Police Record
  3. Passport
  4. A letter from Real Estate Agent

Foreigners may also be asked to present other information and documents for transparency as a precaution against money laundering.

It takes around 19 to 65 days to complete the five procedures needed to register a property in Dominica.




Footnotes to Transaction Costs Table

The round trip transaction costs include all costs of buying and then re-selling a property – lawyers’ fees, notaries’ fees, registration fees, taxes, agents’ fees, etc.

Currency:
Dominica uses the East Caribbean Dollar (XCD) which is pegged to the US Dollar (USD) at USD1 = XCD2.70.

Alien Landholding License:
Under the Aliens (Landholding Regulation) Act, No. 17 of 1995, all non-citizens of Dominica are required to obtain an Alien Landholding License to own more than one acre of residential land or three acres of commercial land. The license fee is 10% of the market value of the land. Aliens may own less than an acre of residential land or three acres of commercial land without a license but they still have to pay the 10% license fee.

Legal Fees:
The use of lawyers for property sale and purchase is mandatory. Legal fees are regulated and set at 3% of property value plus 15% Value Added Tax (VAT).

Judicial Fee:
Judicial fee is around 2.5% of property value and it is paid to the Accountant General’s Office by the buyer.

Assurance Fund:
Assurance Fund fee (1% of property value) for the Memorandum of Transfer is paid to the Accountant General´s Office by the buyer.

Stamp Duty:
Stamp duty on conveyance of real property is 6.5% of property value: 4% is paid by the buyer and 2.5% is paid by the seller.

Real Estate Agent´s Fee:
Real estate agent´s fee is typically 5% of purchase price.






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