The Closing Costs for buying property In the Dominican Republic

As a foreigner purchasing real estate in the Dominican Republic, you must be aware of the various closing costs involved. Understanding the closing costs allows you to budget accordingly and know the cash you’ll need to purchase your property.

The closing costs will range from 4% to 10% of the property’s registered value or purchase price.

Here’s a rundown of the typical closing costs in the Dominican Republic:

1. Transfer Tax (Impuesto de Transferencia Inmobiliaria – ITBI) – The transfer tax or IBTI is 3% of the property’s registered value or purchase price, whichever is higher.
2. Attorney Fees – Legal fees generally range from 1% to 1.5% of the property’s purchase price. It’s advisable to hire a reputable attorney to handle the transaction, as they can assist with due diligence, contract review, and preparation.
3. Notary and Document Fees – Buyers are responsible for paying for the cost of the legal documents needed for the transaction. This includes the cost of notarizing documents and other miscellaneous fees. These costs can be up to 1% of the property’s value.
4. Agent Commission – The seller is usually responsible for the real estate agent’s commission. However, in some cases, like buying from an individual seller, the buyer may be responsible if it’s negotiated in the terms of the deal. The agent’s commission will be between 3% to 6% of the purchase price.
5. Surveyor – If you’re buying a home or a piece of land from an individual seller, you’ll need to hire a surveyor as part of the due diligence process. The cost of a surveyor can go up to $600.
6. Translation – If you’re a foreigner buying in the DR, you’ll want the sales contract to be translated into English. You want to understand what you’re signing. Translation services will cost you no more than $200.

Depending on your residency status, you could qualify for an exemption on the transfer tax. Plus, you are exempt from transfer tax if you purchase Confotur-certified property. You can learn more about Confotur here.

To be fully prepared for all the expenses associated with your property purchase, I suggest you consult an attorney or a real estate professional to get an accurate estimate of your closing costs.

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Maria Abreu is the CEO and Managing Attorney of Abreu & Associates, a law firm practicing exclusively in Dominican Republic Immigration and Nationality law. She is also the founder of Retire and Invest DR. This organization hosts conference events for foreigners interested in living, retiring, and investing in the DR. You can contact Maria at: mabreu@abreuimmigration.com.