Make a formal offer
The procedure for purchasing property in the Dominican Republic is similar to that in Canada, Europe and the United States. Once the buyer decides which property they like, all they need to do is have a formal written offer along with a deposit of 1% of the total amount. The seller is presented with the offer and if he decides to accept the offer, the 1% deposit becomes part of the final payment. In the event that the offer is not accepted by the seller, the security deposit will be returned to the actual buyer.
Sign the promise of sale
The next step is to sign a Promise of Sale, which is a legally binding document that must be signed before a Notary Public. Both parties will sign this document as soon as the buyer’s attorney completes the required due diligence.
All terms of the transaction are set forth in the Promise of Sale and the document will include the full names of both parties, references establishing the identities of both the buyer and the seller, such as valid passports, driver’s license, a default clause, legal description of the property, the date of delivery of the property, the terms of payment, the purchase price, the exact date of closing and, most importantly, the requirement that the selling party sign the Deed of Sale once final payment has been made.
The required deposit is usually around 10% and is placed in the escrow account. This way, the property is reserved for you and taken off the market, so you don’t have to worry about someone else buying the property.
The deed of sale
When the transaction has been paid in full, both parties can finalize the Luxury homes for sale in Dominican Republic, which is also a legally binding document that must be countersigned by a notary public. The Deed of Sale allows for the transfer of agreed ownership from the seller to the buyer and makes the whole process quite simple and less expensive, simply because the Promise of Sale step is no longer necessary.
Expect to have closings within 30-60 days, but it all depends on the agreement between the buyer and the seller. All buyer funds must be in escrow 3 days prior to closing. The buyer and seller will sign all the necessary documents on the closing date.
The sale will be recorded in the Title Registry by your attorney. Expect to find the property in your name within a month.
Buying taxes
Taxes must be paid before presenting the purchase at the Title Registry Office. Real estate transfer taxes and expenses are approximately 3.5% of the property’s government-assessed value, as follows:
3% transfer tax (Law # 288-04). Fee for the transfer of the property title, calculated on the greater of the estimated values or the purchase price. It means that taxes are paid based on the market value of the property determined by the tax authorities, not based on the purchase price indicated in the deed of sale.
Buyers who want to lessen the impact of transfer taxes have the option of using a loophole that allows the in-kind contribution of assets to companies without paying transfer taxes. For this, the seller’s cooperation is essential.
0.5% to 1.5% notary fees, depending on the estimated value of the house and the complexity (duration) of the transactions.
