Buying Paradise: A Complete Guide for Foreigners Investing in Dominican Real Estate
Is it safe? Is it legal? Can I get a loan? Here are the answers to every question you have about buying property in the Dominican Republic as a foreigner.
For many, the dream of owning a villa in the Caribbean stops at the "what ifs." The legal systems of foreign countries can feel opaque, and the fear of the unknown often outweighs the desire for a beachfront view.
At Navetta Properties, we are here to tell you that the process is not only possible but transparent and secure—if you follow the right steps. The Dominican Republic has one of the most open foreign investment environments in Latin America. Whether you are looking for a retirement haven in Las Terrenas or a high yield rental in Punta Cana, this guide covers the essential legal, financial, and practical considerations you need to know.
The Golden Rule: Equal Rights
The first and most important thing to know is that foreigners have the same property rights as Dominican citizens.
You do not need to be a resident or have a Dominican bank account to buy property.
You can hold title in your own name or through a corporation.
There are no restrictions on the purchase of residential or commercial land by non residents.
The Step by Step Purchase Process
While the process is straightforward, skipping steps can be costly. Here is the standard roadmap for a secure transaction.
1. Property Search & The "Reservation"
Once you find the right property with Navetta Properties, the first step is usually a "Reservation Agreement." This takes the property off the market for a short period (often 15–30 days) while you conduct initial checks.
Tip: Always visit the property in person to assess its condition, location, and proximity to infrastructure like clinics and supermarkets.
2. The Offer & Promise of Sale
After your offer is accepted, your attorney draws up the Promise of Sale (Contrato de Promesa de Venta).
This is a legally binding contract that establishes the price, payment terms, and date of final delivery.
It typically requires a deposit (often 10% or more).
3. Due Diligence (The Most Critical Step)
Never sign a final contract without your attorney conducting thorough Due Diligence. Your legal counsel must:
Verify the seller is the rightful owner by checking the Title Registry.
Confirm the property is free of liens, mortgages, or legal disputes (litis).
Ensure the property complies with zoning laws and has its IPI (property tax) payments up to date.
4. Closing & The Final Contract
Once due diligence is clear, you proceed to closing. You will sign the Final Contract of Sale (Contrato Definitivo de Venta) before a Notary Public. At this stage, the remaining balance of the purchase price is paid.
5. Title Transfer & Registry
The final step is legalizing the sale. Your attorney takes the signed contract to the Deeds Registry (Registro de Títulos) to transfer the Certificate of Title into your name.
Note: You must pay the Transfer Tax (3%) before the title can be issued.
Financing: Yes, You Can Get a Mortgage
A common myth is that foreigners must pay 100% cash. This is false. Major Dominican banks like Banco Popular and Banreservas offer mortgage products specifically designed for foreigners and non resident Dominicans.
Typical Loan Conditions for Foreigners:
Loan to Value (LTV): Banks typically finance up to 70% of the property’s appraised value.
Interest Rates: Rates for foreigners generally range between 7% and 12%, depending on the currency (USD loans often have lower rates than Peso loans).
Term: Up to 20 or 25 years.
Bank Requirements for Foreigners: To apply, you will generally need to provide:
A valid passport (and a second form of ID like a driver's license).
Income Tax Returns from your home country (usually the last 2 years).
Bank statements from your home country (last 6 months) to prove solvency.
Authorization for the bank to check your international credit bureau.
Budgeting: The "Hidden" Costs
When calculating your budget, you must look beyond the listing price. A safe rule of thumb is to add 5%–6% to the purchase price for closing costs.
Transfer Tax: 3% of the property value (paid to the DGII).
Exception: If you buy a pre construction property under the CONFOTUR Law, this 3% tax is 0%.
Legal Fees: Typically 1% – 1.5% of the transaction value.
Notary & Registry Fees: Miscellaneous administrative costs (approx. 0.25% - 1%).
Essential Documentation Checklist
To ensure a smooth process with your attorney and bank, have these documents ready:
[ ] Valid Passport (for all buyers/spouses).
[ ] Proof of Funds (Bank statements or investment account summaries).
[ ] Tax Returns (Last 2 years from your country of residence).
[ ] Copy of the Property Title (Provided by the seller).
[ ] IPI Certification (Showing the seller is up to date on taxes).
[ ] Certification of Legal Status (To prove the property is clean).
Why Navetta Properties?
Buying in a foreign country requires trust. You don't just need a salesperson; you need a partner who understands the legal landscape.
At Navetta Properties, we guarantee comprehensive support. We connect you with the best specialized attorneys, guide you through the banking requirements for foreigners, and ensure that every property we show has passed a preliminary legal check.
Ready to start your search? Contact us today to explore our portfolio of legally verified, title ready properties in Las Terrenas.
Disclaimer: Navetta Properties provides this information for educational purposes. We always recommend that our clients consult with a local attorney and tax professional to understand their specific legal situation.