A Comprehensive Guide to Buying Land in Dominica as a Foreigner

Dominica, known for its lush rainforests, natural hot springs, and pristine beaches, has become an attractive destination for foreigners seeking land investment. While the process is relatively straightforward, it involves understanding the local laws, taxes, and regulations unique to the country. This guide delves into the specifics of purchasing land in Dominica as a foreigner, from identifying the right property to navigating the legalities of ownership. Whether for personal use or investment, we provide essential insights to ensure a smooth transaction, safeguarding your interests in this vibrant real estate market.

Can foreigners buy properties in Dominica

Foreigners can purchase land in Dominica under conditions that ensure they have the same rights as local citizens. This welcoming approach reflects the country's openness to international investment. Non-residents can buy and own land outright, but they must obtain an Alien Landholding License (ALL), which involves an application process with the government. This policy has made Dominica an attractive destination for investors and individuals seeking vacation homes or retirement properties.

The process for buying land is straightforward: it involves conducting a title search to ensure the property is free of liens, executing a sales contract, and transferring the title to the new owner. All real estate transactions are conducted in English, and it is advisable to engage the services of a reputable local attorney to navigate the legal aspects of the purchase. Additionally, the government provides incentives for foreign investment, including tax exemptions under certain conditions, further enhancing the appeal of the Dominican real estate market to international buyers.

Legal requirements

Foreign nationals have the same rights as Dominican citizens when it comes to purchasing land in Dominica, thanks to the country's welcoming laws. The primary legal framework governing these transactions is the Property Registry Law. To acquire land, the buyer must ensure that the property has a clear title and that there are no liens or encumbrances. This due diligence is conducted through a title search in the appropriate Title Registry Office.

Once a property is selected, a Promise of Sale is typically drafted by an attorney. This legal document outlines the terms of the sale and is signed by both parties. The next step involves the transfer of property, which requires the execution of a Deed of Sale (Contrato de Venta) before a notary public. The notary then legalizes the transaction and the documents are submitted to the Title Registry Office for the corresponding area.

The buyer must also obtain a tax ID number (RNC) from the Dominican Tax Office. After the sale, the buyer is responsible for registering the property in their name, which includes paying the applicable transfer taxes and registering the deed. The registered deed serves as the official proof of ownership.

How to buy

To purchase land in Dominica, begin by conducting thorough research to identify the desired parcel. Engage a reputable real estate agent with experience in the local market to assist in finding suitable properties. Once a piece of land is selected, the agent will typically arrange a viewing and provide guidance on the negotiation process.

After deciding to proceed with the purchase, the next step is to make a formal offer. If the offer is accepted, a Promise of Sale (also known as "Contrato de Promesa de Venta") is drafted. This document outlines the terms of the sale, including the payment schedule, and is signed by both the buyer and the seller.

Subsequently, a title search is conducted to ensure the land is free of liens or encumbrances. Assuming the title is clear, the final contract, known as the "Contract of Sale" ("Contrato de Venta"), is prepared. This contract is then signed by both parties in the presence of a notary public.

Finally, the transfer of ownership is registered at the Title Registry Office ("Registro de Títulos"), where the new title deed ("Certificado de Título") is issued in the buyer's name, completing the purchase process.

Why to Buy Property in Dominica: Top 8 Reasons

1. Citizenship by Investment Program

Dominica's Citizenship by Investment (CBI) program is renowned for its efficiency and affordability, offering foreign investors a pathway to citizenship through substantial economic contributions. By investing in government-approved real estate or making a financial donation to the country, investors gain access to numerous benefits, including visa-free travel to over 140 countries.

To qualify for citizenship through the real estate investment option, investors must invest a minimum of $200,000 in government-approved properties. This route is one of the fastest in the Caribbean, allowing investors to sell the property after three years, thus providing flexibility and potential return on investment. The streamlined process and clear investment guidelines make Dominica's CBI program a highly attractive option for those seeking to obtain second citizenship efficiently and economically. By combining the allure of a tropical paradise with the practical benefits of a strong passport, Dominica's CBI program stands out as a top choice for global investors.

2. Natural Beauty and Climate

Dominica is often called the "Nature Island of the Caribbean" due to its stunning natural landscapes, including lush rainforests, pristine beaches, and volcanic hot springs. The island's climate is tropical, with warm temperatures year-round, making it an ideal location for those who enjoy outdoor activities and natural beauty.

3. Economic Stability and Growth Potential

The Dominican government has implemented several policies to ensure economic stability and attract foreign investment. The country has a growing tourism sector and has been investing in infrastructure development, which bodes well for property value appreciation in the future.

4. Low Cost of Living

Compared to other Caribbean islands, Dominica offers a relatively low cost of living. Real estate prices, daily expenses, and utilities are more affordable, making it an attractive option for retirees, expatriates, and those looking for a second home.

5. Legal Framework and Property Rights

Dominica has a well-established legal system based on English common law, ensuring clear property rights and a transparent purchasing process. Foreign buyers enjoy the same property rights as local citizens, making it a secure investment environment.

6. Eco-Friendly Lifestyle

Dominica is a leader in eco-tourism and sustainable living. The island's commitment to preserving its natural environment makes it an appealing destination for those who value green living and want to invest in eco-friendly properties and communities.

7. Proximity to the United States and English Language

Dominica's proximity to the United States makes it an attractive destination for American buyers. The island's official language is English, making it easier for US buyers to navigate the real estate market, communicate with locals, and integrate into the community. This accessibility, combined with the island's natural beauty and economic opportunities, makes Dominica a convenient and appealing choice for US investors looking for property in the Caribbean.

8. No Annual Taxes on Rural Land

Dominica offers the significant advantage of no annual taxes on owning land in rural areas. This policy can greatly reduce the long-term costs of property ownership, making it particularly attractive for those looking to invest in agricultural or undeveloped land. This tax benefit adds to the overall affordability and appeal of purchasing property in Dominica's rural regions.

These reasons collectively make Dominica a compelling choice for property investment, offering both tangible and intangible benefits that cater to a diverse range of buyers.

Best Places to Buy

Dominica, with its stunning landscapes and vibrant culture, offers various areas ideal for land purchases. Roseau, the capital city, is popular for those looking for urban convenience with the potential for commercial development. Portsmouth, known for its beautiful beaches and friendly community, is attractive for both residential and investment purposes. The village of Calibishie offers a more tranquil environment, perfect for vacation homes and retirement properties with stunning coastal views. Each of these areas provides unique advantages, catering to different preferences and investment strategies in Dominica's real estate market​.

Average Prices and Closing Costs

The average prices for land in Dominica can vary widely depending on the location and proximity to popular areas such as beaches or urban centers. As of the current market, land prices can range from as low as $5 to $10 per square meter in rural or less developed areas to upwards of $50 to $100 per square meter in prime locations like Roseau or Portsmouth. In more exclusive neighborhoods or resort areas, prices can even exceed this range. Anticipated closing costs for real estate transactions in Dominica typically include legal fees, transfer taxes, and notary fees. These costs usually amount to between 5% and 7% of the property value. Transfer taxes are generally 4% of the registered property value, while legal and notary fees can vary but often represent around 1% to 2% of the property value. Buyers should also account for potential additional costs such as title search fees and property valuation expenses.

Associated Risks and What to Watch Out For

When purchasing land in Dominica, buyers should be aware of several risks. Legal due diligence is crucial as clear title is not always guaranteed; title insurance can mitigate this risk. Zoning laws and land use regulations may affect development plans, so it's essential to verify these before buying. Natural disasters, such as hurricanes and earthquakes, can impact property value and usability, so consider location and construction standards. Additionally, fluctuations in the local economy can affect real estate values. Foreign buyers should also be aware of potential language barriers and differences in business practices. Engaging with a reputable local attorney and a real estate agent familiar with the area and its regulations is advisable to navigate these complexities. Lastly, be cautious of scams and ensure all transactions are conducted securely and legally.

Procedures for Purchasing Property in Dominica

To ensure a smooth property purchase in Dominica and avoid potential pitfalls, it is strongly recommended to engage a reputable real estate company, such as Blue Sky Realtors Ltd., even when dealing directly with a private owner. The process typically involves the following steps:

• Initial Offer: Provide the real estate agent with a written offer for the property you are interested in purchasing.
• Presentation to Seller: The agent presents your offer to the seller/owner.
• Acceptance and Transaction Statement: Upon acceptance by the owner, the agent will provide you with a 'letter of acceptance' and a 'statement of transaction,' detailing the purchase price, transfer fees, legal fees, and survey/valuation fees.
• Legal Agreement: If you accept the statement of transaction, a lawyer is hired to draft a Purchase & Sale Agreement.
• Property Valuation: A licensed surveyor conducts a valuation of the property. Transfer and legal fees are based on this valuation or the purchase price, whichever is higher.
• Survey Plans: A surveyor prepares new survey plans as part of the title changeover process.
• Deposit: Typically, a 10% deposit on the purchase price is required to secure the property. This deposit is made upon signing the Purchase & Sale Agreement, which also specifies the date for paying the remaining balance.
• Escrow Arrangements: The 10% deposit may be paid directly to the owner if there are no title encumbrances or held in escrow by the agent or lawyer to ensure a refund if the title is not clear.
• Final Payment and Transfer: Complete the sale by paying the remaining balance and all associated fees to the lawyer, as outlined in the Purchase & Sale Agreement.
• Title Registration: The lawyer prepares a Memorandum of Transfer (MOT), which is executed by the owner. After paying the required transfer fees at the Treasury, the MOT and other relevant documents (title forms, survey plans, valuation, and the original title) are submitted to the Land Registry to process the title in your name.

Transfer Fees

For Local Buyers

• 2% Stamp Duty
• 1% Judicial Fees
• 1% Assurance Fund
• 2.5% Legal Fees (+15% VAT)
• TOTAL: 6.5%

For Foreign Buyers

• 10% Alien Landholders Fee
• 2% Stamp Duty
• 1% Judicial Fees
• 1% Assurance Fund
• 2.5% Legal Fees (+15% VAT)
• TOTAL: 16.5%

Note: Valuation and survey fees are charged separately. Legal fees attract an additional 15% VAT if the lawyer is VAT-registered. The seller also pays a 2.5% Stamp Duty on the property's market value or purchase price, whichever is higher.

Alien Land Holders License

Under the 2008 revision of Dominica's Land Owners Act, all foreign buyers must pay an Alien Landholding Fee of 10% of the property value or purchase price, whichever is higher. Additionally, purchasing more than 1 acre for personal use or more than 3 acres for business purposes requires applying for an Alien Landholding License. This license is specific to the property and the owner and is non-transferable. The application can only be made after placing a deposit on the property and must include:

• Ownership details, location, and current property value.
• Intended use of the property.
• Land plan prepared by a licensed surveyor.
• Application fee receipt.
• Any other information required by the Minister.

For non-agricultural development, approval from the Planning Division is also required.

By following these steps and understanding the associated costs and requirements, buyers can navigate the property purchase process in Dominica with greater confidence and security.