by Sylvain Maufrais 
When it comes to investing in Punta Cana today, and given the financial movements of recent days, it’s important to understand that what happened to real estate in the United States during the 2008 crisis has nothing to do with the current Real Estate Boom in the Dominican Republic.
So what exactly happened in 2008?
The 2008 financial crisis in the United States, also known as the subprime crisis, was triggered by a real estate bubble that burst.
This bubble had been fuelled by risky home loans, often granted to people who couldn’t afford to repay them.
When these lenders began to default, the financial institutions that had bought the loans found themselves with devalued assets.
This led to a loss of confidence in the banking system and a liquidity crisis, resulting in an economic recession.
How do investments in Punta Cana work today?
As I explained in a previous article, the FIDEICOMISO (Trust) is the keystone, the guarantee of success for real estate projects currently being sold in Punta Cana, but not only that.
The fact that future homeowners don’t have to take out bank loans in the Dominican Republic, and can finance their property themselves with a financing plan in the form of monthly instalments during construction, is another essential guarantee.
You can therefore spread your investment in your future apartment or house over 18 to 24 months, with an initial contribution of 10% or 20%.
This means that each owner finances the property project firstly to start construction, then during construction, and finally concludes his or her investment on delivery with the remaining 40% or 50%.
Of course, when construction starts, the prices of apartments still available for sale increase significantly. This is both an additional guarantee for future buyers, and a capital gain for the first investors.
In addition to these advantages, some real estate projects also offer :
- property tax exemption for 15 years for projects governed by Law 158-01 (CONFOTUR)
- lifetime property tax exemption (1% annual) for properties under 150,000 Euros.
What’s more, you can own your property with your passport alone, or by incorporating it into a company. Here too, companies can be set up remotely with your passport, and AGIREDOM will take care of the formalities for you.
In conclusion, the financing scheme for residences and real estate projects in Punta Cana since 2022, confirming the Real Estate Boom, has absolutely nothing to do with the financial set-up that caused the 2008 crisis in the United States, allowing you to invest and save your savings.
Two years later, in 2024, you have the choice of either building all the homes already built and still available, i.e. very few, or investing in the next ones, available at the end of 2024, 2025, 2026 or 2027.
Sylvain Maufrais, AGIREDOM
Versión Español – Version Française
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