Real Estate Taxes in the Dominican Republic

Taxes

Real estate taxes in the Dominican Republic are additional costs associated with buying or selling a
property. These costs vary depending on the location and the taxes that must be paid. Closing
costs, property expenses, and property taxes are some factors that must be considered when buying,
selling, or transferring property in the Dominican Republic.

Closing Costs

Closing cost refers to the expenses incurred by a buyer during the purchase of a property. These expenses
may include agent fees, attorney fees, utility fees, filing fees, notary fees, and other expenses related to
the purchase. These costs will vary based on location, property price, and other factors.
A flat tax of 3.1% (cadastral value of the property) will be charged for the transfer of the property.

This tax transfers the property from the seller to the new buyer. The tax is paid based on the commercial value of the property as determined by the tax authorities, not on the purchase price established in the deed. Historically, the taxing authorities have assessed properties below market value. Generally, this tax is between $2,000 and $6,000, depending on the purchase price of the property.

Legal Expenses

Legal expenses are the fees and costs associated with the legal advice necessary to complete a property
purchase. These costs may include attorney’s fees, costs of documents needed for the purchase, notary
fees, and title search costs. These costs will again vary depending on the location of the property, the size
of the property, and the type of legal advice required.
Your real estate attorney will charge interest on the purchase price of the property. The fee is usually 1 to
1.5% of the purchase price. This amount includes all payments, due diligence, and transfer of title into your personal or business name, depending on the method of purchase you choose.

There are many Law firms on the North Coast that you can use to represent you; Guzman Ariza is one of the most respected ones in the area.

Property Tax

Property taxes refer to the taxes that must be paid on the property. These taxes include property taxes, home equity taxes, real estate capital gains taxes, and income taxes. These taxes vary based on location, property value, and other factors.

1% annual tax on personally owned real estate (based on the total value of all properties) *Estimated by
state authorities. Remember that the value of the property usually does not reflect the actual market
value but is usually less. Most owners pay much less than the actual market value. The valuation of the
property does not take into account the fixtures and fittings it contains. The 1% is only calculated on values over USD 6,858,885.00 DOP (approximately USD 150,000). Tax 1% of the actual assessed value for
undeveloped land; no exemption is required.

Real estate taxes in the Dominican Republic are essential costs when buying, selling, or
transferring property. Closing costs, property expenses, and property taxes are some factors to
consider when buying, selling, or transferring property in the Dominican Republic. Buyers should plan
to ensure they have the necessary funds to pay for these costs

Note: this article is intended to provide information to buyers but We recommend to hire a professional on the area.

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