This is a detailed guide for the foreigners that whish to acquire a property in Punta Cana.
When you hear “Punta Cana” the first thing that comes into your mind is the image of a perfect beach with white sand, turquoise water and lots of palm trees. These are the beaches from Punta Cana and to prove that, each year at least one of them enters the exclusivist listing of “Top 25 beaches in the world – Travelers’ Choice” from Tripadvisor.
Besides being such a great tourist destination, DR also represents a great investment opportunity. According to World Bank, DR is currently the fastest growing economy in the Caribbean and Latin America. Between 2015 and 2019 the DR’s annual GDP growth rate averaged 6.1% and in 2020 the DR had the lowest contraction rate in the region with only -4%. The Punta Cana area is especially attractive as investment in vacation rentals. An investment made in a property carefully chosen can offer up to 6-7% ROI.
Can a foreigner acquire a house in Dominican Republic?
Yes, Dominican Republic it’s one of the few countries that allow foreigners to own both house and land in the country and it guarantees the same rights as a local citizen. The title is issued by the local authority in your name and it’s on a freehold basis. This means that you really own the house and land, you can sell them at any time you wish, and your family will inherit all.
What documents you need to buy a property in Dominican Republic?
- Two forms of Id: your passport and your driving license or your passport and your national identity card.
- Bank statements of the last three months.
- Your last tax report
- You will need to fill in a due diligence form for the bank stating where your income comes from.
- The purchase agreement
Here are the basic steps of acquiring a property in Dominican Republic and here in Punta Cana. Keep in mind that these are general steps and they can be slightly different depending on the buyer, the seller and the property.
Step 1: Choose a property
The first step is to decide what type of property you want and choose the one that better fits your needs. Here we can help you out! Tell us what you have in mind and what are the most important criteria that your new property should meet and we’ll help you find the perfect one. Here you’ll find more than just a real estate broker, you’ll find a personal real estate advisor that does his best to protect your interests and to make sure you will have a smooth purchase whether it’s a family house, a rental property or a piece of land.
Step 2: The purchase offer
The purchase offer (“promesa de compraventa”) is a simple document stating the property, the closing date, the amount of the reservation, the offer amount, and the basic seller and buyer obligations. If the seller accepts the offer it has to sign it as well. At this point you pay the reservation amount which is around $5,000. Commonly this payment is considered as part of the total amount to be paid for the purchase. If the property it’s a condo or a villa you buy directly from owner and the the property has legal or tax problems this reservation payment will be refunded.
Step 3: Making the downpayment and due diligence on the property
If you purchase a unit under construction from a developer (a project), after the reservation is made, you have 30 to 60 days to make the downpayment, which usually is 20%-30% of the property value. There are no due diligence to be made as the property it does not exist and will be created by the developer after the construction it’s ready.
If you buy directly from owner, before moving forward, your lawyer must make the due diligence for the property to make sure there are no tax problems or other dues. This could take from 2 weeks up to 30, or even 60 days to complete.
Step 4: Signing the contract
If you purchase a project unit you sign the contract when you make the first downpayment.
On the other hand, if you purchase a house or a condo from an owner, you must wait for he lawyer to confirm everything is ok with the property. After that the contract draft is made and the transaction is closed by signing both seller and buyer.
Step 5: Paying the remaining amount
The next step is to pay the remaining amount. In case of a project you can agree with the developer to make several downpayments during the construction and the remaining 40%-60% of the value when receiving the unit. This can be made in one or several downpayments depending on the conditions agreed previously in the contract.
For acquisitions directly from owner you have usually 30 days to pay all the amount agreed for the purchase.
Step 6: Receiving the title
Your lawyer will take all the necessary actions in order to obtain the property title registered by the local authority and hand it to you. Congratulations! Now you are the owner of a Punta Cana Property!