1) How do you own the property – in your personal name or in a business name?
You can choose either way. Regardless of how you own property, a personal name, or a business name, you own that property directly with title, a simple right.

2) If the property is owned by a company, can it be transferred?
Yes, you can transfer shares of the company to a new owner. Note: the new owner may be another corporation or trust company.

3) Will I pay property taxes on an annual basis? How does the government determine the taxable base?
Yes, the property tax is called the “IPI tax”. It is approximately 1% of the assessed value of the house which is determined by the number of square meters of the house and its assessed value. If the property is owned by the company, the applicable tax is the tax on assets (impuesto sobre activos), but a company must pay the greater of the 1% tax on assets or 25% of its net income. Companies that own only property are generally subject to the 1% tax on their assets and this asset is normally real estate.

4) Do you have a deed to close? Is there a transfer tax?
If the transaction is a transfer of the real estate, the Seller must provide you with the Duplicate Owner’s Deed (Certificado de Titulo duplicado del Dueño) as well as other documents required to register the transfer at the Land Registry. Before registering the title transfer, you must pay your transfer taxes (3% of the value of the property) to the Department of Internal Revenue, which issues a receipt certifying that you have paid. If the transaction is a stock transfer, the Seller must provide you with the stock and the Duplicate Deed of Title. The current government is revising the transfer tax percentage.

5) Do you need title insurance?
Not usually, but it is available through Las Americas Title Services and other agencies.

6) What are the typical closing costs? How much is the transfer fee?
The closing costs will be your attorney’s fee. The transfer tax is 3% of the value of the property. The current government is reviewing the transfer tax percentage.

7) Does financing affect the closing?
Sellers do not require local financing. Banks will require appraisals in order to approve loans and if financing has been pre-approved, it should not impact the closing.

8) Is there a due diligence period for inspecting the property before filing a deposit?
It is common in the Dominican Republic to do due diligence on the property. Buyers want to make sure that the property is free of liens and encumbrances, the Seller is up to date in the payment of property taxes, that the surface area of the property is what the Seller says, etc.

9) How do you apply for tax exemptions?
Any lawyer can find out if you qualify for tax exemptions and how it is paid.