What Is a Real Estate Trust (Fideicomiso)?
A real estate trust (Fideicomiso Inmobiliario) is a legal structure regulated by Law 189-11 of the Dominican Republic, which allows the transfer of real estate assets to a trust entity (Fiduciaria) for administration and eventual transfer to the beneficiaries.
In the context of property purchases, especially for projects under construction, the trust acts as a protection mechanism for both the buyer and the developer.
Important: Real estate trusts are regulated by the Superintendency of Banks of the Dominican Republic, ensuring supervision and transparency.
Benefits of the Trust
For the Buyer:
- Investment protection: Funds are protected in case the developer goes bankrupt
- Transparency: The trust entity supervises the correct use of funds
- Legal certainty: The process is regulated by law
- Tax benefits: Exemption from certain transfer taxes
For the Developer:
- Greater trust: Buyers feel more secure
- Access to financing: Facilitates obtaining bank loans
- Professional administration: The trust entity handles financial aspects
Parties Involved
Settlor (Fideicomitente)
The developer or owner who transfers the assets to the trust.
Trustee (Fiduciaria)
The authorized financial entity that administers the trust and funds.
Beneficiary (Fideicomisario)
The buyer or beneficiary who will receive the property upon completion.
Purchase Process
- 1
Project Selection
Choose a real estate project that operates under a trust. Verify that the trust entity is authorized.
- 2
Reservation
Sign the reservation contract and make the initial payment (usually 10-20%).
- 3
Trust Registration
You register as a beneficiary (Fideicomisario) in the trust agreement.
- 4
Scheduled Payments
Make payments according to the schedule. Funds go directly to the trust account.
- 5
Delivery and Transfer
Upon completion of construction and your payments, the trust entity transfers the property to your name.
Associated Costs
| Item | Approximate Cost |
|---|---|
| Trust administration fee | 0.5% - 1% annually |
| Legal fees | 1% - 2% of the value |
| Transfer tax | 3% of the value (may be exempt) |
| Title registration | Varies by jurisdiction |
Tax benefit: Under Law 189-11, transfers from a trust (Fideicomiso) may be exempt from the 3% transfer tax.
Important Considerations
Verify the Trust Entity
Make sure the trust entity (Fiduciaria) is authorized and supervised by the Superintendency of Banks.
Read the Contract
Carefully review the trust agreement. Consult with a specialized attorney.
Know Your Rights
As a beneficiary (Fideicomisario), you have the right to receive periodic reports on the project status.
Delivery Deadlines
Check the clauses regarding delivery deadlines and penalties for delays.
Looking for Trust-Based Properties?
Find projects with trust (Fideicomiso) in the Dominican Republic.
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