Escrow and Deposits in Dominican Republic Real Estate: What's Normal in 2026

Escrow and Deposits in DR Real Estate: A Practical Guide for Foreign Buyers

If you're buying property in the Dominican Republic in 2026, one of the first culture shocks is that escrow doesn't work the way it does in the United States or Canada. There is no equivalent of a state-licensed escrow company sitting between buyer and seller as a neutral regulated third party. Yet deposits — sometimes large ones — are still part of every transaction.

This guide walks you through what's normal, what's negotiable, and how to keep your earnest money safe when buying property in the DR. As always: laws, taxes, and market practices change, so confirm anything material with an independent licensed Dominican attorney (abogado) before you wire money.

The Core Problem: There's No "Standard" Escrow System

In the U.S., escrow is a regulated industry. In the DR, there is no parallel system. When a real-estate agent or developer tells you "we'll put your deposit in escrow," ask what they actually mean. In practice, your deposit usually ends up in one of these places:

• The seller's attorney's trust account (cuenta de abogado) — common for resales.
• A lawyer or notary acting as a contractually appointed escrow agent — better, if it's your independent attorney or a mutually agreed neutral one.
• The developer's corporate account — common for pre-construction; this is not escrow at all, it's a direct payment to the seller.
• A U.S. or international escrow company — occasionally used in high-end Punta Cana and Las Terrenas deals, especially for North American buyers who insist on it.
• A local bank's escrow service — some Dominican banks offer formal escrow accounts, though terms vary.

None of these is automatically "wrong," but the protection you get is wildly different. The single most important rule: never wire a deposit to an account controlled solely by the seller, the seller's lawyer, or the developer's lawyer if you can avoid it.

The Typical Buying Timeline and Where Deposits Fit

A standard Dominican resale closing has three main money moments:

1. Reservation Deposit (Reserva)

After a verbal agreement on price, the seller often asks for a small reservation deposit to take the property off the market while due diligence begins. This is typically a modest fixed amount or a small percentage of the purchase price — qualitatively, think "earnest money" rather than a major payment. Get a signed reservation agreement that specifies:

• Exactly what the deposit secures (an exclusivity period, usually 15–30 days).
• Whether it's refundable if title issues are found.
• Who holds the funds and under what conditions they're released.

2. Promise of Sale (Promesa de Venta / Contrato de Promesa de Venta)

This is the binding preliminary contract, signed once your attorney has completed initial due diligence at the Registro de Títulos under Law 108-05. At signing, you typically pay a larger deposit — commonly around 10% of the purchase price, though this is negotiable and varies by deal and region.

The Promesa should specify:

• The full price, payment schedule, and closing date.
• Penalties if either party walks (often the seller returns double the deposit; the buyer forfeits it).
• Conditions precedent: clean title, no liens, current IPI taxes paid, condominium fees up to date.
• Where and how the deposit is held.

This is where escrow language matters most. Insist that the Promesa names a specific escrow agent, the conditions for release, and what happens to the funds if the deal fails.

3. Closing (Contrato de Venta Definitivo)

At closing, you pay the balance, sign the Contrato de Venta before a Notario Público, and your attorney files for the new Certificado de Título at the Registro de Títulos. The 3% transfer tax (ITI) — paid by the buyer to DGII on the higher of the contract price or the DGII appraisal — is settled here, along with stamps and registration fees. Title transfer is not instant; expect weeks to months for the new title to issue.

What's "Normal" for Deposit Amounts

There is no law mandating deposit percentages — it's market practice. As a rough guide:

• Reservation: a small flat amount or roughly 1% of price.
• Promesa de Venta: commonly around 10%, sometimes less for higher-priced properties.
• Pre-construction: developers often structure 20–40% during construction in milestone payments, with the balance at delivery.

These are conventions, not rules. Negotiate.

Who Pays What

In a typical Dominican resale, the buyer pays:

• The 3% ITI transfer tax to DGII.
• Notary fees and registration fees at the Jurisdicción Inmobiliaria.
• Their own attorney's fees (commonly around 1–1.5% of the purchase price, but negotiable).
• Any escrow service fee, if a formal escrow is used.

The seller typically pays:

• The real-estate agent's commission.
• Any outstanding IPI, condo fees, and utilities through closing.
• Capital gains tax on their profit. (Note: this is not a flat 27% for individuals — it's taxed as ordinary income on a progressive scale on the inflation-adjusted gain. The 27% rate is the corporate income tax rate. Sellers should verify their exact exposure with DGII or a contador.)

Protecting Your Deposit: A Checklist

1. Hire your own independent abogado before you sign anything or send any money. Not the seller's lawyer, not the developer's lawyer, not the agent's recommended lawyer (unless you've vetted them independently).
2. Run title due diligence first. Confirm the Certificado de Título, that the property is deslindado (individually surveyed), and that there are no liens, mortgages, or pending litigation at the Registro de Títulos.
3. Name the escrow holder in writing in the Promesa de Venta, with release conditions tied to documented milestones.
4. Prefer a neutral third party — a bank escrow product, an international escrow company, or a mutually agreed attorney with a documented trust account — over the seller's lawyer.
5. Wire compliance matters. Dominican banks ask for source-of-funds documentation under AML rules. Have bank statements and a clean paper trail ready before you initiate the transfer.
6. Get receipts and reconcile. Every payment should generate a written receipt referencing the Promesa or final contract.

Special Case: Pre-Construction Deposits

Buying off-plan is where buyers lose the most money in the DR. A few honest cautions:

• Your "deposit" is usually not in escrow at all. It goes to the developer's operating account to fund construction. If the project fails, recovery is difficult.
• CONFOTUR projects (under Law 158-01, administered through the Ministry of Tourism / MITUR) offer real tax benefits, including ITI exemption for the first buyer, but the certification protects taxes, not your money. Resale buyers typically lose the transfer-tax exemption.
• Look for developers with completed past projects, escrow-style payment structures tied to verifiable construction milestones, and bank-backed completion guarantees where available.
• Read the Contrato de Reserva and the eventual purchase contract carefully with your attorney. Delivery dates in DR pre-construction routinely slip.

Common Mistakes Foreign Buyers Make

• Sending a deposit before signing anything because "the property will be gone."
• Using the seller's or developer's attorney as their own.
• Skipping the title search at the Registro de Títulos because the seller "showed them the title."
• Assuming verbal escrow promises are enforceable.
• Forgetting that the 3% ITI is computed on the higher of contract price or DGII appraisal — and budgeting only for the contract price.
• Confusing constitutional foreign-ownership rights (Articles 25 and 221 of the Constitution; presidential approval was abolished by Decree 21-98) with imaginary border or coastal restrictions. The only real coastal restriction is the 60-meter maritime zone (Law 305 of 1968), which is public land for everyone.

Short FAQ

Is escrow legally required in the DR? No. It's a contractual arrangement, not a statutory one. That's why naming the escrow holder and release conditions in the Promesa de Venta matters so much.

Can I use a U.S. escrow company? Sometimes — if both parties agree. It's more common in higher-end deals with North American buyers. Expect higher fees and more paperwork, but stronger protections.

Is my deposit refundable if title problems are found? Only if your contract says so. Build refund triggers — clean title, no liens, accurate boundaries — into the Promesa.

Should I buy through an SRL (Dominican LLC)? Many foreign buyers do, for liability and succession reasons. Discuss the trade-offs (annual filings, DGII obligations) with your attorney and contador.

A final honest note: laws, tax thresholds, and market practices in the Dominican Republic change. Treat this guide as orientation, not legal advice. Before you wire a single dollar, confirm the current rules with DGII (taxes), the Jurisdicción Inmobiliaria / Registro de Títulos (title), MITUR/CONFOTUR (incentives), and an independent licensed Dominican attorney representing only you.