Buying Real Estate in the Dominican Republic

The buying process for real estate properties in the Dominican Republic is quite similar to that of North America. Please click on this link to go over the Real Homes DR buying process.

Sellers, or vendors, typically pay for real estate fees, rather than buyers. However, buyers are responsible for legal fees, which typically amount to 1-1.5% of the purchase price and include all disbursements, due diligence, and transfer of title. In addition, buyers also incur a 3% transfer tax based on the government-assessed value of the property (which is typically lower than the market value) when transferring the title of the property to their names. The total cost for buyers typically ranges from $2000-$6000 US, depending on the purchase price.

The general running costs for a 2-bedroom villa, such as utilities and condo fees, are similar to those found in other locations. Some additional fees, such as housekeeping, are optional. On average, the monthly costs for a 2-bedroom villa (with all services included) break down as follows:

Subdivision/Condo Fee: $200-$350/month (includes cable, security, water, outside lighting, maintenance of common areas, garbage, and onsite office)

Pool/Yard Service: $250/month

Housekeeping: $100-$300/month

Electricity: $100/bedroom/month (if the unit is being rented out)

Propane: $20-$30/month (depending on usage)

Misc: $100/month (for consumables and maintenance, if villa, less if condo)

It’s worth noting that condos generally have lower monthly costs than villas.

Properties in the Dominican Republic are fully owned and titled, with no bank trusts or life leases. The property can be registered in the buyer’s personal name or in the name of a corporation, depending on the buyer’s preference. For more details on the buying process, please refer to our Buying Process page.

Renting your Property

Yes, many individuals who purchase condos and villas in the DR use them as rental properties when they are not occupying the property themselves. Real Homes DR has its own internal rental program, as well as property/rental management services to help you with renting out your property. For more information on renting your property, visit our Renting Your Property page.

To rent out your villa or condo, it should be fully furnished and equipped with items such as dishes, linens, appliances, kitchenware, and electronics. This means that when a renter enters the unit, everything they need for their stay is provided, except for their personal belongings. To learn more about what is required for a rental unit, please visit our page “Setting Up Your Property for Rental.” Many developments with internal rental programs will also provide a list of necessary items. 

A general rule of thumb is that property management companies typically charge a fee of 20% of short-term rental income and 15% of long-term rental income. This fee covers services such as marketing the property, providing check-in and check-out services, supervising the unit and staff, addressing maintenance issues, and providing customer service to renters. A reputable rental company can make the process of renting out your property stress-free and manageable for you.

Many of our property owners are absent for extended periods of time, which is why they choose to rent out their units. To accommodate this, rental management should be streamlined and require minimal effort on the part of the owner. Rental companies that cater to this type of owner understand the “lock up and leave” concept, meaning the owner can leave the property and have confidence that it will be well-cared for in their absence. If the property is being rented out, the company will handle all of the details, but the owner may need to make decisions if they are contacted regarding things such as repair costs or rental terms.

Occupancy rates can vary greatly depending on a number of factors such as location, condition of the property, level of amenities, and pricing. In general, the north coast can expect occupancy rates to fall between 50-75% throughout the year. Most properties are able to cover their running costs, but many owners also see a significant additional income from renting out their units. We would be happy to provide advice on how to maximize rental revenue for your property.

Key Info about the Dominican Republic

All foreign nationals looking to remain in the country longer than sixty days at a time, are expected to obtain a residency status.  You can apply to extend this stay up to four month.   After 30 days, you will be charged nominal amounts when you exit the country, based on the time you stayed in the DR.

The Dominican Republic has an area of roughly 19,000 square miles, which is roughly twice the size of the state of New Hampshire. If you are considering renting out a property in a development that has an internal rental program, they will typically provide you with a list of requirements for participation.

The options for activities in the Dominican Republic are endless. You can find sports, community groups, clubs, churches, and more just like in North America. The year-round warm weather also allows for a variety of outdoor activities to be enjoyed all year long.

Yes, the Dominican Republic has a stable democratic government with a system similar to that of the United States. The government actively encourages foreign investment and is committed to long-term programs in education, infrastructure, and technology. If you would like more information on the government of the Dominican Republic, please click here.

Rental management companies in the DR understand the concept of “lock up and leave” and will take care of your property in your absence. If you choose to rent out your property, the company will handle all of the details, but you may need to make decisions if contacted about things such as repair costs or rental terms.

The Dominican Republic is generally considered a safe destination, however, it’s always wise to exercise caution and take the same safety precautions you would in your own country. As with any destination, there may be certain areas that are safer than others. It’s best to act in a similar manner to how you would at home, such as keeping your wallet secure in tourist areas, locking your car, and avoiding flaunting valuables.

Related Useful Information

  • The Dominican Republic imposes a 1% annual tax on real estate properties owned by individuals, based on the cumulative value of all properties as assessed by government authorities. It’s important to note that these values may not reflect true market value and are often lower.

  • The 1% tax is only applied to values exceeding $6,858,885 DOP (around $150,000) and does not take into account any furniture or equipment found in the property. For unbuilt lots, the tax is calculated on the actual assessed value, without any exemptions.

  • The tax is payable annually on or before March 11th, or in two equal installments, with 50% due on or before March 11th and the remaining 50% due on or before September 11th.
  • The amount of the exemption is adjusted each year for inflation.

  • Properties that are exempt from this tax include: (a) farm properties, (b) homes whose owner is 65 years old or older and has no other property in their name, and (c) properties owned by companies, which pay a separate tax on their company assets.

Foreigners are now able to purchase real estate properties in the Dominican Republic without any restrictions. Previously, Decree 2543 of March 22, 1945, and its amendments, mandated that foreigners needed to obtain Presidential approval before purchasing property, with certain exceptions. However, Decree 21-98 of January 8, 1998, repealed this regulation and now the only requirement is for the Title Registry Offices to keep records of all purchases made by foreigners for statistical purposes.

Foreigners are able to inherit real estate properties in the Dominican Republic without any restrictions. The taxes on inheritance have been recently reduced to 3% of the assessed value of the estate. Inheritance of real estate is governed by Dominican law which typically mandates that a portion of the inheritance must be given to specific heirs. However, a new law passed in December 2014 enables foreigners to have their own national laws govern the rules of inheritance in relation to real estate located in the Dominican Republic. It is highly recommended that non-Dominican citizens who purchase real estate in the country seek legal counsel to understand how to take advantage of this provision.

The Dominican Republic offers high-quality medical services, professionals and facilities that are easily accessible. Many doctors speak English, and specialists and prescription drugs are widely available. The country also boasts dentists that are on par with those in North America. The cost of health insurance can vary, but a comprehensive plan for a couple typically ranges between $700-$1500 US dollars per year.

Having a social life and connecting with like-minded individuals is essential. While the beach and warm weather are great, it can become lonely without a community. For example, Mel in our office is a big hockey fan. He visits local pubs during play-offs to watch the games on the big screen with other Canadians and Americans. It’s important for women to have a group of friends they can connect with, or life can be isolating. In the Sosua/Cabarete area, there is a large community of Canadians and Americans, and newcomers are always welcome to join in community events like BBQs. Additionally, being a part of a large community makes it easier to adjust to the area, as you learn where to shop, buy furniture, etc.

The towns of Puerto Plata, Sosua, and Cabarete offer a wide selection of major North American brands. Big-box stores such as PriceMart (similar to Costco), Ikea, and La Sirena (similar to Walmart) can be found in nearby Santiago or Puerto Plata. Additionally, Sosua and Cabarete have large grocery stores and various other shopping options, including furniture and home goods stores.