The Dominican Republic maintains an open market for foreign investors, allowing people to buy and sell real estate in the DR as non residents with the same rights and obligations as Dominican nationals. The legal system relies on a formalized “Torrens” title system governed by Property Registry Law No. 108-05.
1. The Legal and Regulatory Framework
Real estate transactions in the Dominican Republic are highly formalized. While you do not need to be a resident to sell, you must ensure your property is legally registered and tax-compliant.
-
The Role of the Notary/Attorney: In the Dominican Republic, a Notary Public must hold a law degree. It is standard practice to hire a specialized real estate attorney to handle the transaction, as they will draft the contracts, conduct due diligence, and manage the interaction with the Dirección General de Impuestos Internos (DGII).
-
Remote Transactions: You can sell your property without being physically present by granting a formal Power of Attorney to a representative or your attorney, which must be notarized and legalized.
-
Corporate Ownership: If your property is held through a Dominican corporation, the sale may involve transferring company shares or assets. Ensure your corporate documentation (bylaws, registry) is up to date.
2. Documentation Requirements
Before listing, assemble the following documents to avoid delays during the buyer’s due diligence:
-
Certificate of Title: The original document evidencing your legal ownership.
-
Survey Plan (Plano Catastral): An official document defining the property’s boundaries.
-
Tax Compliance: Evidence that all annual property taxes (IPI) are current, along with a certification from the DGII confirming you have no outstanding tax obligations.
-
Identification: A valid passport (and your spouse’s, if married).
-
Additional for Condos: Condominium regulations, proof of settled communal fees, and minutes from recent association meetings.
3. Financial Considerations
-
Capital Gains Tax: Sellers are liable for a 27% capital gains tax on the net profit from the sale. Ensure you work with your accountant to calculate this correctly, as it must be settled with the DGII before the process is considered fully closed.
-
Agent Commissions: Seller-paid agent commissions typically range from 4% to 6% of the sale price.
-
Legal/Notary Fees: Expect to pay approximately 1% to 1.5% for legal fees, plus applicable taxes on those services.
-
Transfer Tax: While typically paid by the buyer (3% of the government-appraised value), clarify who covers this in your initial negotiations.
4. Preparing for Sale: A Checklist
-
Clear All Debts: Ensure all utility bills and property taxes are paid in full. The buyer’s attorney will conduct a deep search to ensure the title is free of liens.
-
Professional Valuation: Commission an independent appraisal to justify your asking price and provide prospective buyers with confidence.
-
Appoint Local Counsel: Do not rely solely on the buyer’s attorney. Retain your own legal representative to review the Promesa de Venta (Promise of Sale).
-
Market Broadly: Use high-quality photos and video tours to attract international buyers, as the DR market is heavily globalized.
-
Sign the Promise of Sale: Once a buyer is found, this binding document outlines the price, payment terms, and closing date. A deposit is typically held at this stage.
Disclaimer: This guide is for informational purposes. Real estate and tax laws in the Dominican Republic are complex and subject to change. Always consult with a qualified local attorney regarding your specific transaction.
Are you currently in the early stages of preparing your property for the market, or are you seeking recommendations for finding a local legal expert to conduct a preliminary title review?
