Inheritance of Property in Punta Cana - Dominican Republic
The legal age to create a will in the Dominican Republic is 18 years old. Although you can seek the assistance of an attorney to draft a will, it is not a requirement. In the Dominican Republic, it is a common tradition for families to have a "generation will" that is passed down from generation to generation, usually given to the heirs in the family. This is not a mandatory process, but it is a long-standing tradition in the country.
In terms of inheritance, the order of beneficiaries is similar to that of the United States, with the exception that the children are first in line, followed by parents and siblings, grandparents, uncles and aunts, then the spouse. If there are no surviving relatives, the estate goes to the state. The money is divided equally among the beneficiaries, starting from the highest rank to the lowest. Unlike the United States, there is no provision for Elective Shares or a spouse receiving a set amount and half of the remaining money.
It is surprising to note that the spouse is only eligible to inherit after the other four options have passed away. This rule is not often relevant in the Dominican Republic, as most families with step-children consider all children to be equal and therefore deserving of inheritance.
In terms of taxes, inheritance is levied at a flat rate of 3% for properties, and gift taxes are taxed at a flat rate of 25%. Both Dominican and foreign individuals, whose last place of residence was in the Dominican Republic, are subject to Dominican inheritance taxes. The inheritance of property located in the Dominican Republic is also subject to these taxes, regardless of the nationality or residence of the deceased person.
Law #288-04 lowered the inheritance tax rate to 3% of the estate value, after deductions, as determined by tax authorities. Medical and funeral expenses, debts, and mortgages can also be deducted. The rate increases to 4.5% for beneficiaries who do not reside in the Dominican Republic.
Beneficiaries must file a declaration with the tax authorities within 90 days of the death of the decedent, with a possible extension of an additional three and a half months in complex cases. Delays in filing may result in a 2% per month penalty, up to a maximum of 50% of the owed tax.