Transfer Taxes in Real Estate
When purchasing a property, there are several of fiscal commitments that you must assume like the required tax you must pay, which is called the transfer taxes in real estate.
If you have already signed the contract for sale, you must submit it with the Local Administration of the General Directorate of Internal Taxes, then request the appraisal of the property purchased.
The Local Administration of the General Director of Internal Taxes, verifies if the seller is up to date in fulfilling his fiscal obligations and requests the appraisal inspection of the property and determine the amount of taxes to pay.
And is it necessary to pay the transfer tax?
Yes, it is mandatory. Failure to pay taxes penalized by the Dominican law. The payment of this tax is necessary and obligatory to transfer the title of property to the seller and place it in the name of the buyer.
Once you have purchased the property and signed the contract to sale, you must register such property into the buyer’s name, to do this you must pay the transfer tax within six (6) months counted from the moment the contract has been signed and legalized.
If you do not pay within six months, this tax will be affected, and penalty charges will be added with interests established in the Dominican Tax Code.
These penalties are as follows:
• 10% late penalty fee for the first month and an additional 4% for the following months.
• 1.10% of compensatory interest for each month or fraction of a month.
How much you have to pay?
The transfer tax amount is a one-time charge. It is three percent (3%) of the higher value between the appraisal and the price of the property stated in the contract to sale.
For example, if the higher price is 200,000 dollars, you’ll have to pay 3% of that value, which is $ 6,000. dollars.
The payment of this tax only applies to properties that are not covered by CONFOTUR LAW, which I have spoken in another blog post.
Now you are more prepared to invest in the Dominican Republic, but if you still have doubts, subscribe to my newsletter or follow me on social networks where you will continuously receive all the information you need to invest safely and quickly.