Rule of thumb schedule for taxes for land sale

[ltsnyder]

I know this topic has probably been discussed before, but I tried a search on "land sale" and it did not seem to come up with the information I was looking for.

When a purchase is made of a parcel of land, as I see it there are a number of taxes involved. One tax is the 5% tax for the transfer of title, there are other taxes involved in the closing which are typically presented in a table included with the title. That is, when I receive the title, I also have a transfer document included which states who legal title was transfered from, and also a third page which tablizes all taxes paid at to where they went. My lawyer seems to use a rule of thumb of about 9% of purchased value for everything, is that about right, and what are the other taxes associated in a transfer of title?

For what I am dealing with, I am buying a portion that is currently labled as a "Resto of Parcela" in Puerto Plata proper which will mean that it will need to be Surveyed and process as a new titled lot in a Manzanna.

-Lee

[Fabio J. Guzman]

9% is not the right figure by a long shot. It’s actually around 5%. I cannot give you an exact percentage because some items are not proportional but fixed. The breakdown of the proportional items is as follows:

Transfer tax 4 %
Surcharge (12% of the 4%) 0.48
Document Stamps (7 per thousand) 0.7

Total 5.18%

Fixed expenses (sundry stamps, cost of certified check, certifications at DGII, tips, etc.) are at present around RD$1750 pesos. For a $50,000 US purchase, therefore, total taxes will be approximately $2590 (5.18% of 50,000) + $58.33 (RD$1750) = $2648.33, equivalent to 5.3% of the purchase price.

The percentage payable in document stamps is adjusted for inflation every year. I expect that beginning in January 2004, instead of 7 per thousand we will be paying 9 per thousand.

[mido]

Hello Fabian,

just came back from paying some transfer taxes and the calculation was:


4% tax
+ 0.48% tax on the tax
+ 0.7% (or 7 pesos for every 1000 pesos
for stamps)
________

= 5.18%
========

They accepted the lower price in the contract and there were some minor extra but fixed costs.

LOL

MIDO

[Fabio J. Guzman]

You are correct. 7 per thousand is 0.7% not 0.007% as I mistakenly stated above before I corrected it.