Taxes and closing costs

It’s not just the price

When you see a property listed at USD 200,000 (example data), that’s not the total amount you’ll need. There are taxes, fees and paperwork paid at closing, plus costs that come around every year. Knowing them upfront saves you nasty surprises and helps you negotiate better.

When each cost is due

1. At closing Taxes, fees and paperwork
2. Every year IPI, HOA fees and insurance
3. If you rent or sell Income tax or capital gains tax

Closing costs, one by one

1. Property transfer tax

   This is the big one. It’s paid to the DGII, the Dominican tax authority, and is usually 3% (example data). It’s calculated on whichever is higher: the contract price or the DGII’s own appraisal. That’s why declaring a lower price "to pay less" doesn’t work, and it puts you at risk.

2. Lawyer’s fees

   These cover legal checks, contracts and processing the title. They typically run between 1% and 1.5% (example data) of the price. Always ask for a written quote that lists what’s included.

3. Notary and legalization

   The notary certifies the signatures on the contract, and those signatures are then legalized. These are relatively small fixed amounts.

4. Title Registry and certificates

   This covers the fees to record your title and the Certificación de Estado Jurídico del Inmueble, the document confirming who owns the property and whether there are any liens on it.

5. Extra costs of buying remotely

   If you sign through a power of attorney, add notarization at home, the apostille, the official translation and courier costs.

6. If you’re taking out a loan

   Registering a mortgage has its own tax, usually 2% (example data) of the amount financed, plus the bank’s appraisal and fees. See our guide to financing for non-residents.

Worked example: a USD 200,000 purchase

Let’s say you buy a USD 200,000 (example data) apartment, pay in cash and sign from abroad with a power of attorney. Every figure in this example is illustrative:

• Transfer taxUSD 6,000 (example data)
• Lawyer’s feesUSD 2,500 (example data)
• Title Registry fees and stampsUSD 400 (example data)
• Notary and legalizationUSD 300 (example data)
• Power of attorney and paperworkUSD 300 (example data)
• Certificates and other paperworkUSD 150 (example data)

All in, you’d need about USD 209,650 (example data), adding the price and the closing costs.

Yearly costs

IPI (the annual property tax) is generally 1% (example data) a year on the value above an exempt threshold that’s updated annually. If you assume a threshold equivalent to USD 150,000 (example data), in this example you’d pay 1% on USD 50,000 (example data): about USD 500 a year (example data).

• USD 500/year Estimated IPI on the amount above the threshold (example data)
• USD 150/month HOA fees (example data)

Add insurance, strongly recommended especially on the coast (read our guide to coastal insurance), plus utilities and management: power, water, internet and, if you rent it out, property management.

Taxes if you rent or sell

If you rent your property out, that income is taxable in the DR. And when you sell, the profit may be subject to capital gains tax, which has been around 27% (example data) of the gain. Talk to an accountant about your situation, especially if you also file taxes in another country.

Checklist before you sign

• Ask your lawyer for a written, line-by-line closing budget.
• Make sure the contract says who pays each cost.
• Confirm the DGII appraisal value.
• Check that the seller doesn’t owe any IPI.
• Set aside a cushion for surprises, for example 1% (example data).

Your next step

Plug your own numbers into our tools and work out your total budget in minutes. If something doesn’t add up, book the free 15-minute advisory call and we’ll go through it with you.