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"The Fairest Land Under Heaven" - Christopher Columbus

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Ocean Star Estates

Dominican Republic Real Estate Law

Real estate transactions in the Dominican Republic are governed by Property Registry Law No. 108-05 and its regulations, in force since April 2007. Among other things, the new law requires a "deslinde" for all real estate transactions. A deslinde is a legal procedure that segregates a portion of land within a parcel from all the other portions within the same parcel. The segregated portion becomes its own parcel with its own cadastral designation that is guaranteed by a definite title. No recorded property rights are possible without a deslinde.

Foreign Investors

The Foreign Investment Law provides foreign investors the same rights to own property as are guaranteed by the Dominican Constitution to Dominican investors. Decree 21-98 of January 8, 1998 establishes as the only requirement that the Title Registry Offices keep a record, for statistical purposes, of all purchases made by foreigners. Foreigners are required to provide a copy of their current passport in order to purchase property, while foreign businesses are required to be registered in the country to purchase property.

There are no restrictions on foreigners inheriting title to real property in the Dominican Republic. Inheritance taxes are 3 percent of the appraised value of the estate. If the beneficiary resides outside the country, inheritance taxes are subject to a 50 percent surcharge, raising the tax rate to 4.5 percent. Dominican law provides for a forced "heirship": part of the inheritance must go to certain heirs by law. For example, a foreigner with a child must reserve 50 percent of the estate to the child despite the existence of a will or of the law of his country of residence. To avoid the application of Dominican rules of inheritance to the estate, it may be advisable for foreigners to hold real estate indirectly through a holding company.

Real Estate Agents

Real estate agents in the Dominican Republic are not licensed or regulated by the government.

Property Tax

Properties held in the name of an individual are subject to an annual property tax (IPI) of 1 percent of the government-appraised value in excess of RD$5 million pesos, except for unbuilt lots or farms outside city limits; and properties whose owner is 65 years old or older, who has registered it in his or her name for more than 15 years and has no other property.

If the property is held by a corporation, no property tax is due. Instead, the corporation must pay a 1 percent tax on corporate assets. However, any income tax paid by the corporation will constitute a credit toward the tax on assets, so that if corporate income taxes are equal to or higher than the taxes on assets due, the corporation will have no obligation to pay taxes on the assets.

Title Insurance

The old Land Registry Law established an indemnity fund with which to pay claimants who for example, due to an error of the Registrar, were deprived of their property. The indemnity fund never collected sufficient funds to become operative and property owners remained unprotected. The Property Registry Law in effect since April 4, 2007, has created a new 2 percent tax on all conveyances in order to establish an indemnity fund. It is also possible to obtain title insurance from private insurers (e.g., Stewart Title Dominicana).