Apartment Sales > Dominican Republic > Buyer's Guide of DOMINICAN REPUBLIC
Buyer's Guide of DOMINICAN REPUBLIC
GENERAL INFORMATION
1. What is the country’s currency?
The currency is the Dominican Peso, where RD$: 1 Dominican Peso equals 0.0188653 Euros and 1 Euro equals 53.0074 RD$.
Currency exchange rates can be viewed at: XE
Due to being a dollar zone, the market price for the Dominican Peso must be determined by first converting it into USD and then converting it into Euros. In June the market price for the Dominican Peso is 34.20 for 1 USD. Devaluation against the dollar has been 5.5% in the last 12 months.
2. Will the product be sold in Euros or in the country’s currency?
It will be sold in dollars (USD), given that it is the dominant currency in all transactions.
INFORMATION ABOUT THE PURCHASE
1. Where is the sales deed formalised?
In the Dominican Republic.
2. In Spain, approximately 3% of expenses is paid plus 7% VAT. What are the expenses in the country for: Bill of Sale, Notary Public, Registry, documented legal records, attorney fees, etc.?
General expenses for a buyer when formalising the sales contract are around 5% of the sale value. This 5% includes: tax, notary public and attorney fees.
3. According to the country’s laws, can you sell to third parties before formalising the sales deed?
Yes.
4. Can Marina D’Or formalise the sales deed on behalf of the purchasing client?
Yes. The client can grant it a power of attorney.
5. Can the mortgage for the home bought in the Dominican Republic be taken out in Spain?
No.
6. Est-ce que je peu me subrogé du crédit hypothécaire fait dans le pays?
Yes.
7. If you buy a flat and then sell it, can you take the money out of the country?
Yes. The Dominican Republic Foreign Investment Law permits the free convertibility and fund remittance.
LEGAL INFORMATION
1. If there are any legal discrepancies, will the courts turned to be Spanish or those in the country?
Courts in the Dominican Republic.
2. If the contract is cancelled before being formalised, is the money returned?
For Dominicans and residents of the Dominican Republic: If they prove the impossibility of payment, the money is all returned except for a percentage established by DR jurisprudence, varying between 15% and 20%.
For foreigners: NO, the sales deed expressly states that if the contract is cancelled, all amounts paid until that time will be lost.
3. When a foreigner in Spain formalises a sales deed in Spain for a Marina D’Or Holiday City flat, he must provide a NIE, or Spanish Tax ID number, do foreigners have to provide a NIE or similar document (Spanish, English, French, etc.) for formalising the purchase of a flat in the country?
Just having a passport is enough.
INFORMATION ABOUT EXPENSES AND DOCUMENTATION
1. 25. If investors sell a flat after buying it, how much will they have to pay in taxes in the country?
They have to pay 2% of the sale value when selling the flat.
Furthermore, according to Law 495-06, if the investor is an individual, it may be determined that they have to pay 25% of the capital gain obtained in the sale of the flat. And for an entity, they could pay between 10% and 25%.
S’il s’agit d’une personne morale, elle peut être tenue de payer entre 10% et 25%.
Tax reform is currently being undertaken in the Dominican Republic, due to which this information could change within the next 6 months.
3. How much is the property tax (if there is one)?
The IPI, or Real Estate Tax, is paid in the Dominican Republic, which is 0.25% of the value of the property paid annually. Properties whose tax value is less than 5 million Dominican Pesos (94,327 Euros) are exempt.
4. What is the current interest rate in force in the country for mortgages?
According to Central Bank statistics, the average of the interest rates for developments or mortgages was 14.42% for 2007, 14.34% during the first 5 months of 2008 and 15,55% in the last 20 days of the month of June.
According to the Central Bank, the interest rates for foreign companies in 90-day, operations were: 11.50% for 2007, 11.43 for 2008 (JAN-JUNE) and 14,45% for the first 20 days of June.
5. What are the conditions for mortgages in the country?
6. What was the revaluation of housing prices in 2006 and 2007? And in 2008? And the CPI in the last 3 years? And the forecast rate?
We do not have official data about the housing price index.
1. What is the country’s currency?
The currency is the Dominican Peso, where RD$: 1 Dominican Peso equals 0.0188653 Euros and 1 Euro equals 53.0074 RD$.
Currency exchange rates can be viewed at: XE
Due to being a dollar zone, the market price for the Dominican Peso must be determined by first converting it into USD and then converting it into Euros. In June the market price for the Dominican Peso is 34.20 for 1 USD. Devaluation against the dollar has been 5.5% in the last 12 months.
2. Will the product be sold in Euros or in the country’s currency?
It will be sold in dollars (USD), given that it is the dominant currency in all transactions.
INFORMATION ABOUT THE PURCHASE
1. Where is the sales deed formalised?
In the Dominican Republic.
2. In Spain, approximately 3% of expenses is paid plus 7% VAT. What are the expenses in the country for: Bill of Sale, Notary Public, Registry, documented legal records, attorney fees, etc.?
General expenses for a buyer when formalising the sales contract are around 5% of the sale value. This 5% includes: tax, notary public and attorney fees.
3. According to the country’s laws, can you sell to third parties before formalising the sales deed?
Yes.
4. Can Marina D’Or formalise the sales deed on behalf of the purchasing client?
Yes. The client can grant it a power of attorney.
5. Can the mortgage for the home bought in the Dominican Republic be taken out in Spain?
No.
6. Est-ce que je peu me subrogé du crédit hypothécaire fait dans le pays?
Yes.
7. If you buy a flat and then sell it, can you take the money out of the country?
Yes. The Dominican Republic Foreign Investment Law permits the free convertibility and fund remittance.
LEGAL INFORMATION
1. If there are any legal discrepancies, will the courts turned to be Spanish or those in the country?
Courts in the Dominican Republic.
2. If the contract is cancelled before being formalised, is the money returned?
For Dominicans and residents of the Dominican Republic: If they prove the impossibility of payment, the money is all returned except for a percentage established by DR jurisprudence, varying between 15% and 20%.
For foreigners: NO, the sales deed expressly states that if the contract is cancelled, all amounts paid until that time will be lost.
3. When a foreigner in Spain formalises a sales deed in Spain for a Marina D’Or Holiday City flat, he must provide a NIE, or Spanish Tax ID number, do foreigners have to provide a NIE or similar document (Spanish, English, French, etc.) for formalising the purchase of a flat in the country?
Just having a passport is enough.
INFORMATION ABOUT EXPENSES AND DOCUMENTATION
1. 25. If investors sell a flat after buying it, how much will they have to pay in taxes in the country?
They have to pay 2% of the sale value when selling the flat.
Furthermore, according to Law 495-06, if the investor is an individual, it may be determined that they have to pay 25% of the capital gain obtained in the sale of the flat. And for an entity, they could pay between 10% and 25%.
S’il s’agit d’une personne morale, elle peut être tenue de payer entre 10% et 25%.
Tax reform is currently being undertaken in the Dominican Republic, due to which this information could change within the next 6 months.
3. How much is the property tax (if there is one)?
The IPI, or Real Estate Tax, is paid in the Dominican Republic, which is 0.25% of the value of the property paid annually. Properties whose tax value is less than 5 million Dominican Pesos (94,327 Euros) are exempt.
4. What is the current interest rate in force in the country for mortgages?
According to Central Bank statistics, the average of the interest rates for developments or mortgages was 14.42% for 2007, 14.34% during the first 5 months of 2008 and 15,55% in the last 20 days of the month of June.
According to the Central Bank, the interest rates for foreign companies in 90-day, operations were: 11.50% for 2007, 11.43 for 2008 (JAN-JUNE) and 14,45% for the first 20 days of June.
5. What are the conditions for mortgages in the country?
- Loans for homes are handled specially, due to the federal programmes that support the development of these markets. Banks are given long-term funds and preferential rates that let them offer mortgages at 15.5% for Dominicans or in Dominican currency.
- If the mortgage is executed in dollars, interest rates are currently between 8.5% and 9%. To opt for this type of dollar mortgage, buyers must show proof of payments in dollars or euros.
6. What was the revaluation of housing prices in 2006 and 2007? And in 2008? And the CPI in the last 3 years? And the forecast rate?
We do not have official data about the housing price index.
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