Investing in the Dominican Republic

The DR is a great investment opportunity because of its thriving tourism industry, strong economy, and attractive real estate market. It’s the top tourist spot in the Caribbean and the government encourages foreign investment.

Many properties offer impressive cash-on-cash returns, with some projects estimating up to 19.57%. You can expect positive cash flow, with some projects forecasting between $19,000 and $60,000 per year. Some properties also offer a share of the net profits, like 70% to be distributed among owners.

The DR has high occupancy rates for both hotels and short-term rentals. Hotel occupancy rates are often between 80% and 82%, while Airbnb occupancy rates average between 60% and 65%. This high demand supports strong rental income.

The DR offers significant tax benefits, including exemptions from the 3% transfer tax and the 1% annual property tax (IPI) for 15 years. There are also no land transfer taxes. The Confotur Law offers additional benefits for qualified properties.

Properties are often located in areas with easy access to beaches, golf courses, marinas, and other tourist attractions. Popular areas include Cap Cana, Punta Cana, Bavaro, and the North Coast.

Many properties offer a wide range of amenities, including:

• Swimming pools
• Beach clubs
• Golf courses
• Marinas
• Restaurants and bars
• Shopping areas
• Gyms and spas
• Kids areas
• Sports facilities like tennis and pickleball courts
• Shuttles to nearby attractions
• 24/7 security

Many properties are sold fully furnished, making them turnkey investments for owners who want to start generating income quickly.

Many projects offer hotel-style management, which can maximize rental income and provide hassle-free ownership. This typically includes:

• Managing reservations
• Handling maintenance
• Cleaning services
• Customer service

In a rental pool, the rental income is distributed among the owners after deducting management fees and operating expenses. Expenses may include cleaning, maintenance, condo fees, insurance, cable, electricity and wifi.

Yes, some banks, such as Scotia Bank, offer financing options for Canadians and Americans. Scotia Bank offers up to 40% loan to value.

The Confotur Law provides significant tax incentives for real estate investments, including exemptions from the 3% transfer tax and the 1% annual property tax (IPI) for 15 years.

Yes, the Dominican Republic has established legal frameworks to protect the rights of foreign property owners. The government is focused on continued economic growth and strong relationships with the United States and Canada.

The steps to purchase real estate in the DR are very similar to North America and include:

• Choose a property.
• Make an offer of purchase.
• Acceptance of offer.
• Deposit and due diligence.
• Contract of sale.
• Deed of sale
• Balance of funds

To reserve a unit, you typically need to provide:

• Two ID documents
• Phone number(s)
• Email address(es)
• Physical address
• Completed reservation form
• Method of payment
• Completed know-your-client forms
• Proof of payment if reservation has already been made

Yes, you may qualify for a mortgage in the DR through a local bank. Qualifying is similar to North America, but rates are typically higher and the timeline is longer. Another option is to get a home equity line of credit in your home country and purchase a property in the DR with cash.

Those who obtain residency in the DR can benefit from partial tax exemptions when purchasing their first property, as well as discounts on vehicle importations and the ability to work and do business in the DR.

Factors to consider when choosing a property include:

• The size of the property
• Outdoor space
• Whether or not to use it as a rental property
• Planned developments in the area

It is important to work with a reputable real estate agent with in-depth knowledge of the DR real estate market and laws. You may also want to seek legal advice on how to benefit from the Dominican inheritance laws.

Some additional benefits of investing in the DR include:

• A diverse selection of properties.
• Access to modern amenities and services
• A strategic location for travel
• A relaxed lifestyle
• A chance to escape cold winters
• A welcoming community
• Potential for appreciation
• Access to quality healthcare

The DR has a good healthcare system with hospitals that have international departments that cater to foreigners. These departments can offer support in multiple languages, assist with finding the right specialists, and facilitate medical procedures.

It’s recommended to visit the DR for at least a week, if possible, to explore the area and connect with expats and get a feel for the local environment.

Both new and resale properties are available. New construction may offer the opportunity for pre-sale discounts and the ability to customize, but may have a longer timeframe before completion. Resale properties are available for immediate occupancy but may not have all the latest features.

Many real estate agencies offer post-purchase support to help you settle into your new home and community including introductions to other owners. They can assist with property management, rentals, and other services.