The Dominican Republic is the most visited nation in the Caribbean region. This country is famous for its beaches and it's North Coast area is one of the best places in the world for windsurfing and kiteboarding. As a dynamic place with high mountains, fertile valleys, and a diverse ecosystem, Dominican Republic is also home to some of the largest diverse parks in the Caribbean with over 10% of the country set aside as national parks and scientific reserves.
This country is also well-known for the various outdoor activities they offer such as golfing, hiking, mountain biking, river rafting, surfing, whale watching, wind sports, diving, and snorkeling. Biking tours and caving are also available. Great whale watching is also a widely known attraction at the Peninsula de Samana.
Why should you buy property in the Dominican Republic?
- High income potential, Dominican Republic recorded more than 6.5 million visitors in 2018.
- Breathtaking beaches with first-class facilities, including world-class resorts, hotels, restaurants, and golf courses.
- Accessible destination with hundreds of flights from the US / Canada
- The fastest growing economy in Latin America, with GDP growth of 6.4% in 2018.
- Tax incentives for international investors
- Political stability
Population: 10.63 million (2018)
Language: Spanish (Dominican Spanish)
Currency: Dominican Peso
Climate: Tropical Rainforest Climate with an annual average temperature of 25°C (77°F)
Coolest months: January and February
Hottest month: August
Northern Coast: November to January
Elsewhere: May to November
Time Zone: Atlantic Standard Time (GMT-4)
Visa Requirement: Countries that do not need a visa to visit the Dominican Republic include Argentina, Chile, Ecuador, Israel, Japan, Peru, and South Korea. If from the United States, the United Kingdom, and any EU members, there’s no need for a visa but will need to pay a tourism entry tax of 10 USD.
Major Points of Interest in the Dominican Republic
Punta Cana - most popular destination located at the easternmost tip of the country. This place is known for its long stretch of beaches and clear waters.
Cabarete - a resort town in the Northern Coast and the center for water sports
La Romana - situated in the Southern Coast known for diverse activities from tennis, polo,
horseback riding, golfing, to coral reefs and the wrecked ship diving
Puerto Plata - named as the "Amber Coast" because of huge deposits of clear amber, this place is well known for the long stretch of beautiful beaches
Santiago - the industrial center and also the home to the Park Duarte - a park with a ceiling of towering ancient trees, surrounded by historical buildings and home to the shopping street Calle del Sol
Santo Domingo - the capital of the Dominical Republic and one of the Caribbean's oldest cities. Popular destination is the Zona Colonial - the historic central neighborhood of the city.
Buying a Property in the Dominican Republic
There are no restrictions for foreigners on buying property in the Dominican Republic. The only requirement for ownership is that the Title Registry Offices keep a record of all purchases made by foreigners for statistical purposes. Foreign citizens are allowed to purchase property in the Dominican Republic with the same rights and obligations as a Dominican citizen. Foreign investments in the country are also encouraged with certain incentives.
Foreign Incentives include:
- Tax-free receipt of pension income from foreign sources, including moving belongings to the country, is guaranteed (Law 171-07 on Special Incentives for Pensioners and Persons of Independent Means).
- Foreign buyers receive a 50% exemption from property tax
- Exemption from taxes on dividends and interest income, generated within the country or overseas
- Foreign buyers receive a 50% exemption from taxes on mortgages, when the creditors are financial institutions regulated by Dominican financial monetary law
- Exemption from payment of taxes for household and personal items
- Exemption from taxes on property transfers
- Partial exemption on vehicle taxes
- Developers are relieved of all national and municipal taxes for ten years, including the tax on the transfer of ownership to the first purchaser of a property, by Law 158-01 on Tourism Incentive.
What are the basic steps in buying a property in the Dominican Republic?
- A "Contract of Sale" or "Purchase Agreement" is made and signed by the parties involved with a required deposit of usually 10%. This will serve as a reservation and will take the property off the market.
- Your lawyer will conduct the process of due diligence (title search, overseeing the survey, and obtaining important documents from the seller, including a photocopy of the title.
- Closing- completing the payment in the Dominican Republic money and authentication of the "Contract of Sale" by the lawyer/notary
- Your attorney will submit the documents to the Registrar of Titles and typically it will be in the new owner’s names within 30-45 days.
List of Costs to consider when buying a property
Notary Fee - 0.25% to 1% (buyer)
Documentary Stamp - 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%
ROUND TRIP TRANSACTION COSTS 9.55% - 15.30%
Annual Property Taxes
If the property is individually owned, a property tax of 1% government-appraised value above DRP 7,138,000 (147,000 USD) is paid. Exceptions are for unbuilt lots or farms outside city limits and properties with owners who are 65 years old or older, who has registered it in his or her name for more than 15 years and has no other property.
If the property is held by a corporation, there's no property tax due. However, the corporation must pay a 1% tax on corporate assets. Rentals in the Dominican Republic are also exempted from taxes.
For foreign buyers, getting a home loan is quite challenging in the Dominican Republic. Ideally, getting financing from your home bank is the best option since you'll get the lowest interest. If this is not an option, you can either get financing from the seller or local banks.
Some sellers or developers offer financing to their buyers. This option is also available for foreign buyers with the below terms.
Interest rate - 6-8% fixed APR
Down Payment requirement - 50%
Repayment period - 3-5 years
Things to note for seller financing
- Provide a Purchase Offer.
- Present a copy of Passport(s) and Other Identification (DNI, Driver's License).
- Pay the Down Payment required
- The availability to sign the Sales Contract is approx. three weeks after the down payment is paid.
There are just a few banks in the Dominican Republic that offer bank financing. One of the most recommended banks is the Scotia bank which is open for mortgage financing for US / Canada / UK citizens.
Scotiabank Mortgage Information:
Maximum loan amount is 70% of appraised property value.
Maximum finance term is 25 years.
Interest Rate is 5.95%% annually.
Loan applicant must own a first home in Canada, US or UK
Minimum age to apply is 21 years of age
Documents required to apply:
- Copy of passport
- Last 2 income tax statements
- Authorization to issue a Credit Bureau Report from the customer's country of residence
- Income letter, if an employee
- Evidence of assets in your country of residence (must be US, Canada or UK)
- Insurance assignment
- Property Appraisal from an authorized appraiser.
- Copy of Offer of Purchase & Sale
- Proof of down payment.
One other important thing to note for purchasing new properties is that the title and Deslinde must be complete in order to obtain mortgage financing.
Average cost of house in Dominican Republic
Pricing at the lower end of the luxury market range from $100 USD to $420 USD per sq. ft. for an oceanfront home. High-end residential properties can go up to $5 million USD in the north and $9 million USD in the south.
Best places to buy property in the Dominican
1. Punta Cana
Punta Cana is home to the county's busiest airport making it extremely accessible from South and Central America as well as Europe. Wide range of properties are available in this area from luxury villas to more modest apartments. This place is also home to two prestigious master-planned resorts which also feature new construction and resale villas and condos for sale. As the leading tourist destination of the country, the flow of overseas visitors is neverending making it a great opportunity to generate a significant return on investment via the rental market.
2. Cabarete, Sosua, and Puerto Plata
Located on the northern coast of the country, this region, particularly in Puerto Plata, is where tourism was first established in the Dominican Republic. As the watersports capital of the country, Cabarete and Sosua are also attractive to many tourists drawn to golden-sand beaches and water activities. Plenty of luxury homes are also available in oceanfront communities while condos and apartments are available at beachfront complexes and hillsides.
3. La Romana
Home to the most established resorts and residential communities in the country, La Romana is the best option for high-end tourists and property buyers looking for the prettiest beaches in the country, world-class golf courses, and full-service marina. Some of the most luxurious homes in the DR can also be found in Casa de Campo in La Romana while more affordable beachfront condos are available in Playa Nueva Romana.
If you're searching for a more laid back feel, this place is perfect for you. Discover a stunningly beautiful, cosmopolitan destination with Tropical-style beach houses and apartments. This area is ideal for buyers who are looking for a private bolthole.
5. Santo Domingo
As the country's capital city, Santo Domingo has gone into investment pouring into infrastructure improvements and new construction condominium developments. This area is also known for the Zona Colonial that emerged as a new cultural attraction and resulted in the growth of tourism from which the country has benefited with a significant investment. This growth in tourism opened up new property investment opportunities to buyers such as opportunities to invest in short-term rental units and hotel suites in new condo-hotels in the city.
Is it a good investment to buy a property in the Dominican Republic?
For personal interest, the Dominican Republic is one of the best places to spend your vacation holiday. It offers a complete package of beautiful places to visit, great activities to try, and very nice sunny weather to enjoy. For commercial interest, this country is also a good place to venture on vacation rentals due to huge tourist visits. The Dominican real estate sector is also evolving. Real estate gains are increasingly evolving and holiday home rental has high profitability. All in all, there's approximately 6 months of high season in the country where rental prices rise by 20 to 50%. So, is it a good investment? Yes!
Here's how Partbnb makes it easy and affordable for you to buy your dream Caribbean vacation home.
- Firstly, our expert property team (who love the Caribbean) will search for the most appropriate properties. When we find a gem, we list it on the "upcoming" section of our properties page. If we are able to secure this property, we will move it to the available page, and now is your chance to reserve your part of this property.
- We walk you through the buying process, and within a few months, you (and 7 others) are the titled owners of the home, with a detailed shared ownership agreement. Our Partbnb team will manage all aspects of the property, overseas the shared ownership, and handle the short term rental part to provide income.
- As an owner, you get 45 days’ use of the property (via a booking calendar). If you choose not to stay, we will rent it out short term, so you can use the income to offset any expenses.
- This truly is a way for you to properly own a standalone home with a fraction of the upfront costs, low (or no ongoing expenses), and benefit from increases in value as the titled owner.
Read the full details about how it works by clicking here
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