In this three-part series, Building Your Home in the Dominican Republic, we will cover the basics of finding the right land, working with contractors, and furnishing your new DR home. Because the Dominican Republic is still such an underdeveloped country in terms of real estate (especially when compared to other locations in the Caribbean), there are great opportunities here for starting your home from scratch.
The Current DR Real Estate Market
Real estate in the Dominican Republic isn't like real estate anywhere else in the Caribbean. On the one hand, home values and prices are on the rise, having been virtually untouched by the housing bubble in the United States and elsewhere around the world. At the same time, you'll find much lower prices than you will for comparable properties on other islands, since the government is in favor of development by second and vacation homeowners.
Buying Land and Property in the Dominican Republic
Since 1998, it has been fairly simple for foreigners to buy land or property in the Dominican Republic. Almost the entire process is the same for overseas citizens as it is for Dominican citizens, with an additional step at the Title Registry Offices to help keep records regarding foreign ownership.
If you are interested in Dominican Republic land, it is best to find a trusted
real estate agent, attorney, and/or notario to help you facilitate the process. In most cases, your process of purchase will look something like this:
- You will work with your DR realtor to find the perfect property. Whether this is a parcel of land that hasn't been built on before, or if all the infrastructure is already in place, you will go through the same process of purchase.
- A Contract of Sale is drawn up between the buyer and the seller and notarized by a notario or other legal professional. The Contract of Sale typically contains a description of the property as well as the agreements of sale (price, conditions, etc.). If you intend to do building or make other changes to the land or home, the plans for construction are often required during this step. Having the plans in writing ensures that you are legally allowed to make the changes you want before the sale is completed. This is also a good time to have your attorney confirm that property regulations and your building plans are compatible. For example, maritime zone and tourist zone restrictions may not allow you to build in areas you wish to, even if you do own the land outright.
- Taxes must be paid on the property, usually at around 5 percent of the sale price for both taxes and closing costs combined. If, for some reason, past real estate taxes have not been paid, these will be the responsibility of the new owner, so it's best to look into this in advance.
- The Contract of Sale and Title are registered at the Title Registry Office. This is where the sale is officially recorded. This is one of the few unique steps required by foreign purchasers.
- The Certificate of Title is issued. Title insurance is required for property in the Dominican Republic, either through the government or a third-party insurance agency. Most foreign investors opt for a third-party title insurance provider. The time span from the filing of the Contract of Sale to the issuing of the new Certificate of Title may vary from a few days to a few months, depending on the Title Registry Office where the sale was recorded.
Depending on your method of payment, this entire process can take a few days (for cash transactions) to a few months (for transactions involving lenders). Either way, once the title has been transferred and the property is in your hands, it's time to start building or doing improvements to your new DR home. Fortunately, services in the country make it possible to get the results and quality you want.