How high are realtors´ and lawyers´ fees in Dominican Republic? What about other property purchase costs?
|Notary Fee||0.25% - 1%||buyer|
|Document Stamp Tax||1.30%||buyer|
|Real Estate Agent´s Fee||5% - 10%||seller|
|Costs paid by buyer||4.55% - 5.30%|
|Costs paid by seller||5.00% - 10.00%|
|ROUNDTRIP TRANSACTION COSTS||9.55% - 15.30%|
| See Footnotes
Source: Global Property Guide
How difficult is the property purchase process in Dominican Republic?
There are no restrictions on foreign ownership of property. Residents and nonresidents enjoy the same rights and obligations.
To purchase a property, the first thing to do is hire a real estate lawyer. There is much history of fraud by real estate agents in the country, and little protection is offered to you as a buyer. Be vigilant. 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.
A 10% deposit is required to reserve the property and take it off the market. Subsequently, the lawyer will conduct the process of due diligence. This involves title search, overseeing the survey, and obtaining important documents from the seller, including a photocopy of the title. When this has been done and the buyer is satisfied with the supplied information, the buyer proceeds to making payments of the remaining balance. Payments are usually made by depositing to the lawyer´s escrow/trust account. When all has been cleared, the lawyer will transfer the payment to the seller´s account before closing.
Some of the documents that must be provided by the seller to begin with the due diligence are:
- Copy of Certificate of Title
- Copy of the survey of the property
- Copy of the seller´s ID ("Cedula") or Passport; if married, including that of spouse´s
- Copy of last property tax receipt; if exempt from property tax, copy of certificate of exemption
- Copy of the approved construction plans if property is a house
The notary/lawyer authenticates the "Contract of Sale" signed before him by the buyer and the seller. The "Contract of Sale" is processed in the Internal Revenue Office where taxes will be paid.
After the transfer, the lawyer will submit the documents to the Title Registry Office where the title will then be changed to bear the new owner´s name.
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.
Notary fees are around 0.25% to 1 % of the property value.
Document Stamp Tax
Document stamp tax is around 1.30% of the property value.