How to buy a house in the Dominican Republic?

1POSTS

3 years ago

Good morning,

We are French and live in France. We went in early March to Las Terrenas in the Dominican Republic. We fell in love with a house and decided to invest.

The real estate agent set up an appointment with his notary first, then, after consultation with the owner of the house, he finally gave us an appointment in a law firm.

To our surprise, the accountant of the firm, friend of the owner, tells us that it is the company, owner of the house that is for sale.

Caught off guard, we accepted, initially and then refused the next morning. The owner finally agreed to sell us the house alone. So we went back to the law firm to sign, in the presence of a notary, a signing power knowing that we were going back that same day in France.

We received, a few days later, a text message from the owner asking us to officially declare only a smaller amount on the bill of sale to limit the capital gain of the sale of the house on his company. Not wishing us even not to be confronted, in case of sale of the house in a few years to a possible surplus value, we refused.

The accountant of the law firm wrote a draft bill of sale which she sent us by email specifying in the body of the email that we had to make the transfers quickly on the two accounts of the owner (RIB attached).

We sent him an email stating that our bank needed a signed official document to make the money transfers in settlement of the sale amount.

So the accountant wrote the final bill of sale that she signed following our agreement. She had the saleswoman sign it and mail it back to us.

We therefore sent it to our bank, which warned us on two points:

On the one hand, the bill of sale only stipulates the sale and purchase of a portion of land. It doesn鈥檛 say anything about a house on the parcel. Do we have to worry and have the act of sale corrected?

On the other hand, the deed is not signed by the notary? It seems to us that legally the deed is not legalized?

After reading many articles about buying in the Dominican Republic and the security points, it seems to us not very prudent, as it stands, to ask our bank to make the transfers.

What do you think?

Thank you for your response

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planner Dominican Republic Expert

17780POSTS

3 years ago

Welcome to the forums.聽 I am really sorry for all this confusion.

It's quite common to buy the corporation as well as the property. If the property is held inside the corp then buying the聽 corp means you own the property.聽 That is the basics.

Writing a lower bill of sale is also common but not really in your interest necessarily.

My advice is to get a lawyer on your side to review everything!

scot2022 New member

5POSTS

3 years ago

When in the Dominican Republic, if you by the corporation the house is in, then you get the house, propety, etc.. and the transfer tax is only 1% of the value of the corporation.聽 If you buy just the house and it isn't in a corporation, the transfer tax is 3% of the value.聽 There are many things you can do to save yourself some money on the back end as well as easier for future sale of the property.聽 I too advise find a good lawyer that will represent you directly.聽 It's worth the small investment even if you end up walking away from the transaction, as you will be made more aware of all of your options and benefits depending on how you structure your purchase and also think about your future sale of the property, even before you buy it.聽 That's always a smart move too.

Traveller1101 Member

11POSTS

3 years ago

@imingret - there is a french way of doing things and then there is dominican way of doing things. ***

BTW, there are a lot of french realtors and buisnesses in Las Terrenas and try to bring their practices in Dominican, but it does not work that way.

Suggestion is to hire a lawyer from that jurisdiction and work with them. No need to jump into conclusions. And @planner is right, a lot of businesses are sold with their assets (movable and immovable). You need to read the contract carefully.

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Denacat Member

1POSTS

3 years ago

@imingret

You have to make sure all of the possible owners of the property have signed.聽 It is very hard to make sure that the title does not have a problem. I would advise you have all of the background check done that all of the possible owners have signed on the sale.

LandInDominicanRepublic New member

3POSTS

3 years ago

Hello

Indeed it is strange.

As already said it is often more interesting to buy the company than its assets.

In any case it is strongly advised to have a very good lawyer in the Dominican Republic to check everything and give you guarantees before starting the payments.

I am French and have been living in Las Terrenas for 15 years.

Greetings

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ddmcghee Dominican Republic Expert

1950POSTS

3 years ago

Also be aware of the tax implications of owning the company - you must file a tax return annually and pay taxes on either income or assets. Be sure to discuss ALL implications of buying and owning a company in DR.

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