When buying a home in the Dominican Republic, the legal aspects are usually explained clearly; the financial aspects, however, are almost never discussed.
When buying a home in the Dominican Republic from abroad, the money follows a path that you should understand before signing: the transaction is almost always agreed upon in U.S. dollars, sent via international wire transfer, and must be deposited into an identifiable account held by the development or the trust—never into a personal account. There are three decisions surrounding this process that have financial implications: when to convert your currency, whether or not to open a local bank account, and how to ensure the origin of the funds can be traced so that no one questions you about it two years later, when you want to sell and repatriate the funds.
What currency is used to pay for a home in the Dominican Republic?
For new construction projects on the East Coast, the contract is almost always denominated in dollars. You can send euros, which will be converted, but the actual price in your currency depends on the exchange rate on the day of each payment, not on the day of the reservation.
This matters more than it seems when you’re buying off-plan: a two-year payment plan involves several currency conversions at different times. If your budget is tight, it’s best to set it in the contract currency and accept the exchange rate fluctuation as a risk you’ll have to bear. The reference rates are published by the Central Bank of the Dominican Republic.
Who is the transfer to?
This is the question that best protects your money. The legitimate recipient is:
| Situation | Correct Receiving Account |
|---|---|
| New Construction with a Trust | The project's trust account |
| New Construction Without a Trust Fund | Corporate development account, as specified in the contract |
| Resale between private individuals | Escrow account or the method specified in the contract, in consultation with your attorney |
A seller's or agent's personal account is never the right answer. If someone offers you this, stop the transaction. To find out how to verify that the project is actually held in trust—and what documents to request—see “Real Estate Projects Held in Trust.”
Do I need to open a local bank account?
It's not essential for making a purchase, but it usually makes things easier later on: paying the maintenance fee, utility bills, and annual taxes from a local account helps you avoid repeated transfer fees.
It is possible to open one as a nonresident, though there are more documentation requirements than for a resident. Many buyers take care of this after the purchase, not before.
What level of traceability should be maintained?
Starting on the first day, keep a complete record of everything: proof of each transfer, the contract, receipts for the project, and the document proving the source of the funds in your country.
This isn't pointless red tape. The day you make a sale and want to take the money out of the country, or when your bank in Spain asks you about a large deposit, that file is what settles the matter in an afternoon instead of six months.
What about the taxes and closing costs?
In addition to the purchase price, you must budget for the 3% transfer tax on the registered value published by the DGII, legal fees, and registration costs. Projects eligible for the Confotur program are exempt from this tax under the terms of Law 158-01.
The item-by-item breakdown is under " ITBI" and "Actual Purchase Costs."
Is it possible to finance the purchase instead of paying in full?
Yes, and it’s important not to confuse two different things. The developer’s payment plan spreads out a portion of the price over the course of construction, without a bank involved. A bank mortgage usually comes into play at the end, to cover the remaining balance, and a nonresident foreigner can qualify for it under specific requirements.
How the payment is calculated and what the banks require is explained in the section on calculating a mortgage loan in the Dominican Republic.
Mistakes That Cost Money
- Transfer to a personal account.
- Paying for a reservation without a contract that specifies whether it is refundable.
- Calculate the budget based on the exchange rate on the day of the reservation, not on the day of each payment.
- Failure to keep documentation proving the source of funds.
- Wait until the day of the closing to find out about the closing costs.
None of these five scenarios is unusual: they are the ones we see time and again among people who come to buy a home in the Dominican Republic when the transaction is already well underway and without having asked about the flow of funds. All of them can be avoided by asking two questions early on and reading the contract carefully.
The complete process, including documents and powers of attorney for remote signing, is described in the section on how to buy as a non-resident.
Frequently Asked Questions
Can I buy a home in the Dominican Republic without traveling there?
Yes. You can sign using a power of attorney executed before a notary and legalized so that it is valid in the country.
Can I pay in euros?
You can send them, but the contract is usually denominated in dollars, and you're responsible for the conversion.
Is there a limit on money transfers?
There is no limit that prevents the purchase, but there are banking disclosure requirements at both the origin and destination. Check with your bank and keep your receipts.
Can I send the money back home when I sell?
Yes, as long as the purchase is properly documented and the taxes are up to date. That's exactly why you should keep records from the very beginning.
Do I need my own lawyer?
Yes, and it's best if it's not the seller's. That's the person who verifies the title and checks which account you're transferring the funds to.
Let's figure out the money part
If you're planning to buy a home in the Dominican Republic and want to review the contract, the recipient's account, and the payment schedule before transferring any funds, please contact us. You can view our portfolio of projects or contact us through the "Contact" page.