The sale price is not all you will pay. Besides the property, the buyer covers taxes, legal fees, and registration expenses. In most cash purchases, this adds up to between 4% and 5% of the price.
Here we explain each item simply and discuss what changed with the 2026 tax reform.
1. Real Estate Transfer Tax: 3%
This is the highest closing cost. It is paid to the DGII before the title can be transferred to your name.
- Rate: 3%.
- Calculated on: the purchase price or the value that the DGII has registered for the property, whichever is higher.
- Who pays it: the buyer, unless the contract states otherwise.
Note: Declaring a lower price in the contract to pay less tax is illegal. It also harms you when you sell, as capital gains are calculated based on what you declared you paid.
2. Lawyer Fees: 1% to 1.5%
In the DR, a lawyer is essential. Their fees usually include:
- Due diligence: checking that the title is legitimate, that there are no mortgages, liens, or oppositions, and that the seller is indeed the owner.
- Drafting the sales contract.
- Notarizing the signature.
- Paying taxes and registering the title in your name.
Seda Realty Tip: hire a lawyer that represents only you, not the seller's lawyer.
3. Title Registration and Certifications
These are the registration costs in the Real Estate Jurisdiction: legal status certification, stamping, and issuing the new title certificate. Generally, these add up to a few hundred dollars.
4. If You Buy with a Mortgage: Mortgage Registration Tax
If you finance the purchase with a bank, a tax is paid for registering the mortgage. It is calculated on the loan amount, not the property price. The Law 30-26 is gradually eliminating this tax:
| Year | Rate on Mortgage Amount |
|---|---|
| 2026 | 2% |
| 2027 | 1% |
| 2028 onwards | Eliminated |
Additionally, add your bank's costs: appraisal, life insurance, property insurance, and opening fee.
5. Other Expenses to Anticipate
- Survey or boundary demarcation (especially for lots and land): between US$300 and US$800 or more, depending on the size.
- Transfer Fee in Condominiums: some residential complexes charge between US$200 and US$1,000 when ownership changes.
- Bank Transfer Fees and Currency Exchange: if you bring money from abroad, exchange rate differentials may cost you between 1% and 2%.
Example: $200,000 Villa Purchased Cash
| Item | Approximate Amount |
|---|---|
| Transfer Tax (3%) | US$6,000 |
| Lawyer (1% – 1.5%) | US$2,000 – US$3,000 |
| Registration and Certifications | US$300 – US$600 |
| Estimated Total | US$8,300 – US$9,600 (≈ 4.2% – 4.8%) |
With a $120,000 mortgage in 2026, you add $2,400 for the mortgage tax (2%), plus the bank fees.
After Closing: The IPI
The Real Estate Property Tax (IPI) is 1% annually. It applies only to the portion of value that exceeds the exempted amount, which in 2026 is RD$10,695,494. If your property is worth less than that according to the DGII, you don’t pay IPI.
And What About CONFOTUR?
If you buy in a project approved under Law 158-01 (CONFOTUR), you may be exempt from the 3% transfer tax and the IPI for up to 15 years. Always request the project's approval resolution. It is not enough for the seller to say it has CONFOTUR.
What the Seller Pays, Not the Buyer
- The real estate commission.
- The IPI and any unpaid maintenance fees.
- New since June 2026: a 10% tax on capital gains, as a one-time payment. There are exemptions: if the money is reinvested in another primary residence within 6 months, or if the seller is over 65 years old and sells their primary residence.
Frequently Asked Questions
What are the closing costs in the Dominican Republic?
Between 4% and 5% of the price if purchased in cash. If financed, add the mortgage tax and bank fees.
Do foreigners pay higher taxes when buying in the DR?
No. A foreigner pays the same taxes as a Dominican and has the same property rights.
Has the 3% transfer tax been eliminated?
No. Law 30-26 reduces and eliminates the 2% on mortgages, but the 3% transfer tax remains in effect.
Who pays the agent's commission?
Typically, the seller does.
Are you thinking of buying in Cabrera or on the north coast? At Seda Realty, we provide you with a complete estimate of the closing costs before you make an offer, so there are no surprises.
📞 829-968-0060 · sedarealtydr.com
This guide is informational and does not substitute for legal or accounting advice. Rates and exempt amounts change every year.