CLOSE X

Register - if you don't have an account

Yes! Sign me up for Global Property Guide's fortnightly email newsletter.


Login - for registered users

Forgot Password?
Explore destinations
continent map couldn't be loaded Pacific Europe & Russia North America Latin America Asia Africa Middle East Caribbean

 


Financial Overview

Directory

Property Search

Global Statistics

Regional Statistics






Last Updated: Mar 25, 2014




The Dominican Republic ended 2013 in a good mood, with GDP growing 4.1%, significantly above the IMF forecast of 2%, according to Central Bank governor Hector Valdez Albizu.  This followed growth of 3.89% (y-o-y) in 2012, and 4.48% (y-o-y) in 2011.

Yet during the year 2013 there were some worries.  Growth decelerated in the first half of 2013 to 1.6% (y-o-y), in the context of “fiscal contraction and weak confidence,” according to the International Monetary Fund.  The Republic’s fiscal deficit had climbed to approximately 7.17% in 2012, up from 3.35% in 2011, prompting officials to pass a series of tax reforms, including a value-added tax increase to 18%, from 16%.

The quite strongly positive outcome for the full year 2013 was, therefore, something of a surprise.  The Dominican Republic's economic numbers are above overall regional growth average for Latin American and Caribbean economies, which the Commission for Latin America and the Caribbean (ECLAC) has estimated at 2.6% in 2013.

The Republic's growth was primarily driven by tourism, which grew 6.3%, to more than 5 billion dollars in annual revenues - a first.

Since 2005, it the Dominican Republic been attracting the most tourists in the Caribbean, based on World Bank statistics. Although growth has slowed in more recent years, the country remains the top Caribbean destination, drawing in tourists by the millions.

Rising house prices in the Dominican Republic property market are expected as more and more foreign buyers head to the country to capitalize on the growing tourism sector.

Prices have increased 7.5% (y-o-y) in 2012, according to the latest Global Property Guide research. Cumulatively, prices have climbed 11% (y-o-y) since 2008.

Analysis of Dominican Republic Residential Property Market »


RENTAL YIELDS
Last Updated: Jan 31, 2012



Average apartment prices in Puerto Plata have increased by a whopping 23%, according to the latest Global Property Guide survey. Bigger apartments showed the highest price appreciation. Last year, a 200 square metre (sq. m) apartment cost around US$2,042 per sq. m. This figure has jumped by 19% and now it costs around US$2,426 per sq. m to buy a 200-sq. m apartment in upscale neighborhoods of Puerto Plata, like Sosua.

The same trend is evident for house prices in Puerto Plata, though the price appreciation is not that high. Last year, the average house price in Puerto Plata was US$1,578 per sq. m. This has slightly increased to US$1,689 per sq. m. now.

Read Rental Yields  »



TAXES AND COSTS
Last Updated: Oct 10, 2013



Rental Income: Nonresident foreigners earning rental income in the Dominican Republic are liable to tax at the corporate rate of 29%.

Capital Gains: Capital gains tax is levied at a flat rate of 29%.

Inheritance: Inheritance taxes are levied at a flat rate of 3% for properties.

Residents: Residents are taxed on their worldwide income and some kinds of investment income derived from abroad at progressive rates, from 0% to 25%.

Read Taxes and Costs  »



BUYING GUIDE
Last Updated: Oct 09, 2013



Dominican Republic luxury propertiesRoundtrip transaction costs are around 10.55% to 15.30% of property value. The agent’s commission of 5% to 10% the property value accounts for the greater part of the costs and is usually paid by the seller.

Buyers must be vigilant. There is much history of fraud by real estate agents in the country, and little protection is offered to the buyer. Any knowledge of Spanish must be shown off. Real estate agents tend to offer higher prices to foreigners, especially when their services are employed in English.

Read Buying Guide  »



LANDLORD AND TENANT
Last Updated: Jun 08, 2006



The law is strongly pro-tenant.

Rent Control: Rents are strictly controlled in the Dominican Republic. The maximum monthly rent is fixed at 1% of the rental property’s value. The tenant can request the Rent Control Authority to reduce the rent if it exceeds the maximum rate.

Tenant Eviction: It is not easy to evict a tenant even when the owner decides to use the property for personal reasons. A hearing must be conducted and the tenant is usually given months, or even years, to look for an alternative dwelling that he can afford.

Read Landlord and Tenant  »



ECONOMIC GROWTH
Last Updated: Mar 25, 2014


Catching up in tourism and development

Dominican Republic vacation homes for saleDespite recent economic growth, the Dominican Republic is still one of the least developed countries in the Caribbean. The economy is primarily dependent on agriculture, trade, and tourism. The economy grew an average of 3.5% per year from 2000 to 2005. The GDP growth rate for 2006 was a stellar 10.7% (after 9.3% in 2005). In 2007, the economy experienced 8.5% growth, followed by a 5.3% growth in 2008, 3.45% in 2009, 7.75% in 2010, 4.48% in 2011, and 3.89% in 2012.

These figures are high for the region. The quite strongly positive outcome for the full year 2013 was above overall regional growth average for Latin American and Caribbean economies, which the Commission for Latin America and the Caribbean (ECLAC) has estimated at 2.6% in 2013.

Tourism is a major contributor to the country’s economic development. It is relatively cheaper than other Caribbean islands, which is one reason why it is one of the most popular destinations.  But the Dominican Republic also has wonderful beaches and good moor=ing for yachts.

Before winning the Dominican Republic’s presidential election in May 2012, Medina promised to “continue with what works, fix what is wrong and do what has never been done before”.

He committed to allocating at least 4% of GDP for pre-university education and has raised the allocation for higher education. He also pushed for the improvement and repair of roads. In addition, the Ministry is engaged in constructing nearly 1,500 kilometers of highways and roads throughout the country.

The construction of housing is another initiative taken since the first day of the current administration. It has worked closely with the private sector to enable access to credit for the massive construction of housing for the middle and lower classes.

Medina is optimistic that 2014 will be a year of employment and productivity. "Macroeconomic indicators show an optimistic 2013 balance and a really hopeful future perspective," according to Medina.







  • Moderate transaction costs
  • Receiving big investments
  • Strongly pro-tenant market
  • Low yields
  • Numerous high taxes
  • Issues w/ poverty & violence
RESIDENTIAL PROPERTY FACTS
Price (sq.m): $2,078 For a 120 sq. m. property, usually an apartment.
Rental Yield: n.a. For a 120 sq. m. property, usually an apartment.
Rent/month: n.a. For a 120 sq. m. property.
Income Tax: n.a. Assumptions: Owners are a non-resident couple drawing US$ / €1,500 per month in rent, with no other local income.
Roundtrip Cost: 15.30% The total cost of buying and then reselling an apartment. Includes:

* all transaction taxes and charges:
* lawyers' and notaries' fees
* agents' fees

Assumptions: The buyers are non-resident foreigners. The apartment cost US$250,00 / €250,000.
Cap Gains Tax: 29.00% Assumptions: The property was bought for US$250,000 / €250,000, and sold 10 years later, after a 100% appreciation.
Landlord and Tenant Law: Strongly Pro-Tenant Rating is based on a detailed study of each country’s law and practice.

News & Discussion



Free Newsletter

Fortnightly updates from the global property arena directly to your inbox.


Email Address:





Connect to professional advice in Dominican Republic



PROPERTY RECOMMENDATIONS

 
Download free Global Property Guide reports

Our Newsletter

 
Fortnightly updates from the global property arena directly to your inbox.

Manage subscriptions
Chinese property buyers and Asian buyers, there is great property for high net worth Chinese buyers on Juwai.com

Which parts of the world are most attractive for property investment today?

Click here to download our FREE Property Recommendations Reports!

Close Me