Foreign homebuyers are back in the Dominican Republic
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Loading... - Rubi Marshall
- 30 May 2022
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When the Dominican Republic reopened its borders and suspended most of its pandemic-related restrictive measures, foreign buyers and international investors quickly returned. Sales to locals increased dramatically in recent months, too.
“Investors and people who could afford second homes here were buying like crazy,” said Melquis Segura of Santo Domingo-based property firm ApartamentosRD. This statement is backed by Sergio Llach, the chief executive of Dominican Republic Sotheby’s International Realty, who claims that the housing market is accelerating due to pent-up demand and foreign buyers are flooding in to the country.
Before the pandemic, the Dominican Republic’s residential property market has been growing rapidly, thanks to robust tourism growth and the arrival of luxury international and boutique hotels, coupled with strong economic fundamentals.
“Tourists come for the surfing and the windsurfing, and many of them end up buying homes here too,” says Josefina Covents of the Cabarete-based agency Josefina Covents y Asoc. This is also supported by Llach, who noted that many of the homebuyers were regular visitors to the country. “The people who buy in the Dominican Republic have been here at least 10 times before,” Llach said. “They’re confident in what they want.”
There are no restrictions on foreigners’ buying property.
Aside from its reputation as a tax haven and long stretches of sandy white beaches and a balmy temperature, foreign homebuyers are attracted because property is still a bargain, relative to the rest of the Caribbean. A newly-built one-bedroom apartment near a beach can be bought for just US$150,000 or less.
Foreign property investment is also encouraged by incentives, which according to the country’s tourism office, include:
· Tax-free receipt of pension income from foreign sources, including moving belongings to the country, is guaranteed (Law 171-07 on Special Incentives for Pensioners and Persons of Independent Means).
· Foreign buyers receive a 50% exemption from property tax
· Exemption from taxes on dividends and interest income, generated within the country or overseas
· Foreign buyers receive a 50% exemption from taxes on mortgages, when the creditors are financial institutions regulated by Dominican financial monetary law
· Exemption from payment of taxes for household and personal items
· Exemption from taxes on property transfers
· Partial exemption on vehicle taxes
· Developers are relieved of all national and municipal taxes for ten years, including the tax on the transfer of ownership to the first purchaser of a property, by Law 158-01 on Tourism Incentive.
“Over the past five years, an expanding tourism industry, a stable economy and friendly tax laws have brought a wave of international buyers to this Caribbean nation of about 11 million residents,” said Sydney Franklin of The New York Times.
However, the Dominican Republic is not your usual Caribbean fantasy ‘unspoiled virgin island paradise’. It has almost 11 million people spread over a mountainous 48,072 sq km, and the social problems include a vast gap between rich and poor, and the highest possibility in the world of death from handguns, though the situation has improved dramatically over the past decade. Read More…
