Planning to Buy or Sell Real Estate in the Dominican Republic?

Navigating the Dominican Republic’s real estate market can be an exciting opportunity for investors, homeowners, and developers. However, like any property transaction, understanding the legal and tax landscape is essential to making informed decisions.

The country’s legal framework, regulated by Law 108-05 on Real Estate Registration and the Torrens System, offers a secure and transparent environment for property ownership. The Torrens System is a government-backed land registration system that provides assurance of ownership. Once a title is registered, it becomes conclusive proof of ownership, significantly reducing the risk of fraudulent claims. Each property is issued a Certificate of Title, which serves as legal evidence of ownership, facilitating smooth transactions and ensuring legal certainty for buyers and sellers alike.

However, even with these safeguards in place, conducting proper due diligence is crucial. Title verification, contract review, and confirming the absence of liens or encumbrances are all steps that should be handled carefully. Involving the expert legal team at ECOVIS VS+B before buying or selling can significantly help mitigate risks and ensure compliance with Dominican property laws.

Understanding Condominium Law

For those considering the purchase of units within a condominium, understanding the Condominium Law (Law 5038) is particularly important. This law governs the ownership, management, and operation of condominiums in the Dominican Republic. When purchasing a unit, buyers acquire individual ownership of their space while also holding shared rights to common areas such as lobbies, pools, and gardens. Before proceeding with the purchase, it is essential to carefully review the condominium’s incorporation documents, including its bylaws and regulations. These documents outline the rights and obligations of owners, as well as the rules governing the use of common areas and the management of the property.

The experienced legal professionals at ECOVIS VS+B can assist in verifying the legitimacy of the condominium’s establishment, ensuring compliance with the law, and identifying any potential issues that may affect the transaction. This step helps buyers make informed decisions and avoid unforeseen disputes in the future.

Understanding Tax Implications

Real estate transactions also come with various tax obligations. Buyers are typically subject to a 3% Property Transfer Tax based on the greater of the purchase price or the property’s appraised value. Meanwhile, owners of properties exceeding a certain value threshold may face an annual Real Estate Property Tax (IPI) of 1%.

For sellers, Capital Gains Tax is another consideration. This tax applies to the profit earned from the sale of property, and understanding how it is calculated — factoring in acquisition costs, improvements, and other deductible expenses — is key to accurate tax planning.

The tax advisors at ECOVIS VS+B provide valuable insights into how to structure transactions efficiently, reduce tax exposure, and ensure compliance with Dominican regulations.

When Disputes Arise

Despite careful planning, real estate disputes can still occur. Issues related to title claims, boundary disagreements, and contract breaches may require legal intervention. The Dominican Republic has a specialized Real Estate Jurisdiction that handles such matters.

Dispute resolution options range from mediation and negotiation to formal litigation. In cases where title fraud or conflicting claims emerge, the real estate litigation team at ECOVIS VS+B can make a significant difference in protecting property rights. Resolving disputes swiftly and fairly often depends on a preemptive and proactive legal strategy.

Opportunities in Tourism Development

For those considering investments in the hospitality and tourism sector, the Dominican Republic offers attractive incentives through the CONFOTUR Law (Law 158-01). Qualifying tourism projects can benefit from exemptions on property transfer tax, real estate property tax, income tax, and import duties on construction materials.

These incentives have positioned the country as a leading destination for tourism-related developments, from luxury resorts to residential communities. Navigating the CONFOTUR application process with the help of the expert advisors at ECOVIS VS+B can maximize these benefits.

About ECOVIS VS+B in the Dominican Republic

At ECOVIS VS+B, we offer a comprehensive range of legal, tax, and accounting services to support clients in their real estate endeavors. Our team includes seasoned professionals with deep expertise in property law, tax optimization, dispute resolution and litigation.

Whether you’re buying your first property, expanding your investment portfolio, or managing a large-scale development, we provide tailored and seamlessly integrated legal, tax and accounting solutions to meet your needs. Our collaborative, partner-led and client-focused approach ensures that every aspect of your transaction is handled with the required precision and care.

Through our affiliation with the ECOVIS International network, we combine global expertise with local knowledge, making us the trusted partner for both domestic and international clients seeking opportunities in the Dominican real estate market.

Contact us today to learn how we can assist you in achieving your real estate goals in Dominican Republic.