by Sylvain Maufrais 
Once again, I stress the importance of investing your savings in the Dominican Republic
It’s time to invest your savings in real estate, where the economic and political stability of the Dominican Republic is unquestionable, and has been for over 20 years now.
If 20 years ago it was still a gamble to move here, ten years later those who took the plunge before the 2008 crisis have already multiplied their return on investment (ROI) by 4.
Before Covid, I wrote several articles explaining the real benefits of investing and setting up here. In particular, I explained the different ways of obtaining Dominican Residency to live legally in the Dominican Republic, including the Investor Visa which gives you Permanent Residency.
Today, 4 years after Covid, the Dominican Republic is booming, with over 250 real estate projects sold off-plan, and more than half of all homes already sold.
Why the real estate boom in Punta Cana and Santo Domingo?
After the need for a Plan B following Covid to escape international blockades by buying a second home, apartment or house in the sun, today it’s all about saving your savings.
The 2020 pandemic has highlighted the Dominican Republic’s openness to restrictions, and at the same time the interest of the FIDEICOMISO (TRUST) in developing new real estate projects.
The principle is simple: it’s an agreement (signed contracts) between 3 entities: a landowner, a builder and a bank. The landowner signs an agreement with the builder to promote a real estate project for a certain period (2 to 4 years), without the need to purchase the land from the outset.
Future homeowners buy off-plan (10% to 20% down payment), then benefit from no-cost financing (no bank loan required) during construction (40% of the property’s value spread over 18 monthly payments on average). The remaining 40% or 50% must be paid on delivery.
The banking entity, the trustee, manages the funds and releases them when sales reach 60% of the construction cost, thus enabling construction work to begin. Without this sum, the trustee guarantees repayment to future owners, so there’s no risk.
Once construction has begun, the price of homes still available for sale rises, leaving a better profit for those who invested first, as always.
To understand the craze for these investments in Punta Cana and Santo Domingo
Indeed, to understand, you need to have all the information at hand, you need to know the conditions of sale. Here they are:
- In the Dominican Republic, you can own property (land, apartments, villas) with a title deed in your own name or in the name of a company, valid for international resale.
- In the Dominican Republic, you can set up a company remotely, using your passport. Personally, I take care of filing these documents with the authorities on behalf of my clients. Average cost, depending on capital (minimum RD$100,000), about 1,500 Euros.
- In the Dominican Republic, you can open bank accounts (US$, Euros and RD$ Dominican pesos) within 15 days of your arrival in the country, with a passport, a letter from your bank and an invoice proving your address.
- Thanks to Law 158-01, more commonly known as CONFOTUR, certain new or off-plan real estate projects offer tax exemption (3% on the transfer of title to your name and 1% annual property tax) for 15 years.
- Properties worth less than 150,000 Euros are exempt from property taxes for life. Note that this is not individual, or per property. As soon as you exceed this ceiling, property taxes are 1% per annum on the total declared value.
- Real estate investments are guaranteed by FIDEICOMISO.
- Investments, through payments by customers and future owners, will always be made directly to the builder’s or developer’s accounts. Never to personal accounts.
- Once delivered, the apartment or house can be rented out during your absence, on a short- or long-term basis, and managed in its entirety by the hotel management services offered on site, for an average profitability of 6%. For your part, you can manage rental bookings via Airbnb, for example.
So, to sum up, if you buy an apartment for 100,000 Euros, you pay 10,000 Euros (or 20,000 Euros) on account, then 40,000 Euros in 18 monthly instalments, i.e. 2,222 Euros per month, then 50,000 Euros on delivery (or 40,000 Euros if you have paid an initial 20,000 Euros).
Personally, once again, I think these investments are well worth it. As I said in my last article “Economic growth in the Dominican Republic in 2024”, properties bought 7 years ago are currently selling for twice as much…
Sylvain Maufrais, AGIREDOM
Versión Español – Version Française
