Owning land and property tax

Tibu

Member
Mar 19, 2002
69
13
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Hola,

I remember that somebody said, it would be better to found a company when buying land for own use (vacation home).

Can somebody tell me more about this?

I already own a lot and think about buying some more land adjacent to the existing. If it is treated as one property I might come closer to the value where I have to pay property tax.

How do I know if the government considers my house and land to have a value so high that I have pay property tax?

Thank you

Tibu
 

Fabio J. Guzman

DR1 Expert
Jan 1, 2002
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Advantages of Forming a Company to Acquire Real Estate

1. The buyer avoids paying transfer taxes (approximately 5% of the purchase price). This assumes that the seller will "contribute" the property in kind to the company and will receive back shares for his contribution. These shares are then sold to the buyer.

2. The buyer's personal liabilities, both in the Dominican Republic as in his country of residence, will not affect the property held by the company.

3. It allows for quick resales since it is much easier and less expensive to resell all the shares of stock of the asset-holding corporation than it is to convey real estate.

4. In case of death of the owner, it simplifies greatly the handling of the estate and the transfer of control to the heirs. Under Dominican law, inheritance of real property is governed by local statute which establishes that part of the estate must go to certain heirs by law (for example, a foreigner with a legitimate child must reserve 50% of the estate to that child irrespective of the existence of a will or of the law of his country of residence). This rule does not apply when ownership of real estate is held by a corporation. Also, if the title is in the name of one or several individuals and one of them dies, the procedure to change the title to the heirs is cumbersome and time-consuming.

Disadvantages

Expense to keep the company current (annual filing of tax returns, preparation of annual meeting, etc.)

Tax rate is a flat 25% instead of the graduated income tax (15%-25%) applicable to individuals.
 

Tibu

Member
Mar 19, 2002
69
13
8
Thank you for the answer.

It is possible/does it make sense to transfer a real estate from my personal property to a company I own?

Is there the same property tax for privately owned real estate as if owned by a company?

Bye

Tibu
 

Fabio J. Guzman

DR1 Expert
Jan 1, 2002
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252
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I always advise my clients NEVER to put their homes or other real estate assets into their business company so that if something goes wrong with their business their real estate will not be affected. If you wish to place your real estate into a corporation, have a new one formed to hold only your real estate.

Property tax rates don't vary depending who holds the property.
 

richard2000

New member
Mar 24, 2002
1
0
0
Taxes on house value

What is the value of a property should be before paying taxes
In pesos would be better and who decides what is the net worth of your property
 

Fabio J. Guzman

DR1 Expert
Jan 1, 2002
2,359
252
83
www.drlawyer.com
Unbuilt city lots pay IVSS (property tax) at a 0.50% rate no matter their value. Homes pay IVSS if valued at more than RD$1,400,000 pesos (approx. US$80,000) at a 0.25% rate. The government decides what your property is worth.
 

anidalys

New member
Mar 6, 2006
4
0
0
how much will be the taxes for a property I bought back in 1987 at $16000 dollars, I lived in NY and never received any tax statements and have not seen my property since 1997, I want to sell it but dont know what to do, can you help me and guide me to get a name of lawyer and how much will come to sell this property.
 

GALK

New member
Mar 12, 2006
116
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0
What is the actual limit of property tax and does one have to make a declaration even if you are off limits?
Does it make sense to change the ownership of flat and even a car on to a company to be save against claims in case of a car accident?