The Trust figure is regulated in the Dominican Republic by law 189-11 for the Development of the Mortgage Market and the Trust in the country. It serves several purposes including the promotion of the development of the real estate market.
The Low-Cost Housing Trusts have been growing consistently in the country with the participation of the public, private or mixed sectors, whose units must have, according to the current valuation a sale price equal to or less than RD$2,469,962.00 (approx. US$50,700).
The President of the country declared the years of 2016 and 2017 as "Years of Housing Development", which showed the intention to support the development of this type of construction having received ample acceptance from financial institutions, investors and builders, since it grants tax exemptions and benefits that will allow a positive impact on the development of the construction and related industries in the Dominican Republic.
In addition to the benefits to the builders and brokers, the buyers also receive benefits when acquiring their home, in the form of a direct bonus or subsidy in proportion with the tax involved in the construction. The percentage of direct subsidy is established by the Internal Revenue Office.
Ordinary Real Estate Trust. One of the benefits presented by the Real Estate Trust Law is that it can be applied for present or future assets. It also grants the possibility of separating the assets and create an independent patrimony providing a better wealth management for the individuals and companies.
The Real Estate Trust grants different advantages to the parties:
- Protection against possible execution of creditors or third parties not related to the Trust
- Financing of up to 90% for construction
- The Trust becomes a protector of the assets involved with a separate patrimony of the trustees and fiduciaries.
- The Estate must only respond to the debts generated by the Trust business.
The use of the Trust in real estate development projects opens the door to a new way of construction with many guarantees and benefits for the organizations involved. Great opportunity for investors and financial institutions in the country.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.