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PURCHASE OF REAL ESTATE PROPERTY IN THE DOMINICAN REPUBLIC:
Foreigners and Nationals are subject to the same conditions upon purchasing real estate property or real estate rights, therefore the same regime applies for both.

Before purchasing a real estate property it is most convenient to retain the services of an attorney, (consult with Rosario & Asoc. at: rosario.asc@codetel.net.do), as the research to determine liens and encumbrances on the property, payment of taxes and issue of the new title certificate in the buyer’s name is necessary and should be carried out thru proper legal counsel, as it is imperative that the situation of the property be researched at the Titles Registry Offices and requesting a written confirmation of the result of those investigations. This system protects the buyer from the claim of any previous sale or lien that has not been registered when the buyer deposits its sale contract for registration purposes.

REAL ESTATE TRANSFERS:
In order to carry out real estate transactions in the Dominican Republic, applicable documents must be registered; such is the case when a transfer is made, or when entering any rights over registered properties, such as mortgages, encumbrances, and leasing, among others.

The prompt registration of a sale is very important. In order to have it, the buyer shall deposit at the Title Registrar one original of the sales-purchase agreement legalized by a Public Notary, together with the Certificate of Title in the name of the seller, which shall be cancelled and replaced for a new one on behalf of the buyer.

TYPES OF CERTIFICATIONS THAT MAY BE APPLIED FOR:

  1. REAL ESTATE LEGAL STATUS CERTIFICATION. The real estate legal status certification is the document issued by the Title Registrar in which its legal status and the term of the Title Certificate Owner's Duplicate is certified, specifying the entries in force registered in the Complementary Register on the date of issuance, such as mortgages, objections or encumbrances. 
  2. CERTIFICATION OF REAL ESTATE REGISTRATION. This document is issued by the Title Registrar and certifies the property has been registered on the date of issuance. 
  3. ACCESSORY REAL PROPERTY RIGHTS REGISTRATION CERTIFICATION.
    This certification is the documentary evidence that an entry of an accessory real property right, lien, encumbrance and provisional measures has been made in the Title Register in favor of the holder or beneficiary such as mortgages, rights of way, etc.  
  4. CREDITORS' REGISTRATION CERTIFICATION.
    The creditors' registration certification is the document issued by the Title Register which certifies the real property right, liens, and encumbrances, such as mortgages. 
  5. PRIORITY RESERVE CERTIFICATION. THE PRIORITY RESERVE
    This Certification is the document issued by the Title Register in which the legal status of a registered property is certified, pointing out the entries in effect recorded in the Complementary Register, as well as the holder on its issuance date, in order to guarantee the immutability of said status and guarantee a particular legal business preventing entries of any other transaction as long as it is in force.

RECOMMENDED WAYS IN WHICH TO PURCHASE REAL ESTATE IN THE DOMINICAN REPUBLIC: Pros and Cons
Real estate properties can be acquired in the Dominican Republic in an individual capacity or through a company, regardless of nationality or the migrant status of the acquirer.

Real estate purchase by an individual
Pros:

  • Recommended in the case of long-term investment and when not interested in assuming corporate procedural expenses.
  • Expedited transfer process before the Title Registrar.
  • The property would be exempted from property taxes if its value is less than applicable exempt value.

Cons:

  • The property is exposed to personal demands against its holder or owner. 
  • The property is subject to the inheritance reserve provided in the Dominican Civil Code establishing that a person that has the use of its properties must leave a certain amount for his children in the case of death for succession purposes. 
  • Transfer is subject to a tax equivalent to 3% of the amount of the transfer. 
  • In the event of the owner's death, the property will be subject to a succession tax, which would be calculated based on the total value of the property. 
  • If the property enjoys the fiscal benefits granted by law 158- 01, these would be lost with an eventual resale, or by the owner's death, since only the project and the first purchaser will benefit from these exemptions.

Real estate purchase through a company
Pros:

  • Facilitates short-term resale, because with a simple sale of shares the property is transferred without the need to change the holder of the Title Certificate. 
  • It is useful for equity planning of the owner or holder. 
  • It protects the property before obligations that could result in personal civil liability, since legally the real estate belongs to a company and not to the company's shareholder. 
  • Avoids succession legal restrictions, since companies are not subject to inheritance reserve. 
  • If the transfer is made through an in-kind contribution, that is, by assigning the property to a company in exchange for shares, there is no obligation to pay the transfer tax.
  • In the event the property is protected by Law 158-01, the future buyer maintains, during the applicable period, the tax benefits when the shares of the company that owns the property are transferred.

Cons:

  • The transfer of goods and chattels, such as shares, is subject to a tax equivalent to 2% of the transfer value, when the seller is an individual. 
  • Companies are subject to the payment of Capital Tax, equivalent to 1% per year of the value of its assets. 
  • The process of an in-kind contribution is long and complicated. 
  • There is the need to verify if the company is up to date on all its obligations, in particular its fiscal duties.

DOCUMENTATION REQUIRED FOR TRANSFER O REAL ESTATE IN THE DOMINICAN REPUBLIC:

  • Original or certified copy of the Board of Directors' Minutes for each party that is a company authorizing an individual to sign the purchase sales contract; 
  • Original Title Certificate; 
  • Sales contract with signatures duly legalized; 
  • Copy of an identification document of the purchaser if it is an individual, or the national taxpayer registration number if it is a company (even if it is foreign); 
  • Receipt of transfer tax payment; 
  • Payment certification or exemption of real estate tax (IPI); 
  • Certification that the company is up to date on tax payments.

The Title in the name of purchaser usually is issued two months from the time of deposit of proper documentation. A power of attorney must be provided to person retrieving new Title Certificate if not the buyer or if it is a company.

ABOUT TOURISM INCENTIVE LAW 158-01:
Some of the properties sold by tourism resorts and those on this website benefit from the provisions of Tourism Incentive Law 158-01, whose objective is to stimulate, through a rational process, the development of the tourism industry in the regions with great potential or that have excellent natural conditions for its tourism development throughout the country.

In accordance with article 2 of the Law, all individuals or companies
Residing in the country that initiate, promote or invest capital in any of
The tourism activities specified in the Law and in the tourism destinations and/or provinces and/or municipalities included in the law may benefit from the incentives granted by it. These activities include the purchase of real estate located in projects covered by the Law: its beneficiaries will enjoy an exemption of 100% applicable to the following:

  1. Income tax generated by promoting, implementing or investing capital in the tourism activities specified, and in one of the zones included in the Law; 
  2. National and municipal taxes collected for using and issuing construction permits and purchase of land or other types of real estate properties, as long as they will be used to develop a specific tourism activity. This include Real Estate Transfer Taxes (sale, in-kind contribution and any other form of real estate transfer), equivalent to 3%, with regards to land and buildings, whether to be part of the project, or to be transferred to investors or buyers. 
  3. Import and other taxes, such as rates, rights, surcharges, including the Transfer of Industrialized Goods and Services Tax (ITBIS), equivalent to 16%, applicable to equipment, materials, and furniture necessary for the first furnishing and start up operations of the tourism facility in question. This includes all services, materials and equipment to be used in the construction of the facilities.
    The tax exemption period applicable to each project, business or Tourism Company is ten (10) years counted as of the date of issue of the corresponding Resolution approving the works.
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