The real estate trust in the Dominican Republic

The real estate trust is a contract between the parties, the settlor, the trust and the trustee.

What Is a Real Estate Trust in the Dominican Republic?

A real estate trust in the Dominican Republic is a legal structure regulated by Law 189-11, where a trustee manages a property or development on behalf of a beneficiary until agreed conditions are met, offering extra security for both buyers and developers.

What Is Each of Them?

Let’s explain it through an example:

Suppose there is a piece of land, the person who owns that piece of land wants to obtain some benefit of it since it is an area of ​​great value. This person requests the advice of a promoter, this promoter will be the person in charge of managing the land that we are going to call trust assets and it is the asset that is going to be transferred.

Once an agreement has been reached between the owner of the land and the promoter in which it is decided to build an apartment complex, seek a lawyer and sign the contract for escrow. The owner of the land becomes the settlor and the promoter the trustee, then you may wonder:

Who Is the Trustee?

Well, once the project starts, we look for people who are interested in buying one of those apartments and that beneficiary or buyer is the one we are going to call the trustee.

The trustee is going to acquire a right in that project and must pay fees agreed in a contract. Once the construction is completed, this right will become a property title, with the trustee being the owner of the apartment that he chose.

What Is the Benefit of the Trust Law?

It gives you the opportunity to acquire a first home in the Dominican Republic at a lower cost, since a lower financial investment is required for the execution of the project and it works as a mortgage guarantee, with the exception that the taxes of the Mortgage registration therefore represents a great saving for this type of project.

Provides security to the buyer since upon completion of the construction, they become the owner of the home or otherwise and in case the project is not executed, the money and benefits must be returned to the trustee.

If you own a piece of land and are interested in this law, you must bear in mind that you should look for a trustworthy promoter, since this will be in charge of complying with and monitoring that the agreement signed in the contract is fulfilled, ensuring the interests and benefits of all parties.

If you are interested in buying a construction project, ask for advice if it is carried out under the real estate trust law, with this you will have less risk when making an investment.

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Want to learn more about buying property in the Dominican Republic? Check out our buying process guide or our simple guide to buying property from abroad.

What Is a Real Estate Trust in the Dominican Republic?

It is a legal contract regulated by Law 189-11 in which a trustee holds and manages a property or development on behalf of a buyer or beneficiary until agreed conditions, such as construction completion, are met.

How Does a Real Estate Trust Protect Buyers?

It protects buyers by keeping the funds and the property under an independent trustee, so if the developer fails to complete the project, the buyer’s investment and rights over the asset remain secured.

Who Can Be a Trustee in a Dominican Republic Real Estate Trust?

A trustee is typically a licensed trust company or financial institution authorized to manage the assets and funds involved in the project, acting independently from both the developer and the buyer.

Is a Real Estate Trust Regulated by Law in the Dominican Republic?

Yes, real estate trusts are regulated under Law 189-11, which establishes the legal framework for trust and mortgage securities in the Dominican Republic.

Do Foreign Buyers Pay Taxes on Real Estate Trust Transactions?

Yes, foreign buyers are subject to the same taxes as Dominican citizens on real estate transactions, including the Property Transfer Tax. You can find more details on the official DGII website.