By Claudia Castillo
Special for El Inmobiliario
Maintaining an empty house or apartment involves a high cost, so it should be analyzed to determine whether this should be resolved with a sale or rental.
Let's be clear: a home continues to incur taxes and other maintenance obligations. In addition, it deteriorates more rapidly when it's not in use.
Many homeowners wonder why owning a vacant house is so expensive. Here's why:
1. Real Estate Property Tax (IPI):
This tax is levied on the total assets of trusts, and in the case of individuals, it is levied on the total assets exceeding RD$9,520,861.00, plus 1% of the excess value of real estate intended for housing or commercial, professional, and industrial activities, and/or urban lots, whether developed or not. Real estate with a value lower than the indicated amount is exempt from this tax.
2. Home insurance:
This is optional, but unexpected events can occur. Therefore, we should have home insurance, a policy with a variable cost depending on what we want to insure and the type of coverage.
Our advice is that if you know for sure that your property will be empty, opt for minimum coverage insurance, since the risk of some of the events explained in the contract happening will be much lower because you will not be living in the premises.
3. The Maintenance Fee:
As is reasonable, the amount of the maintenance fee will depend on the services provided, as well as the size of the common areas. Contrary to popular belief, this payment is indeed stipulated by law. Law #5038 of the Condominium Regime establishes that vacant apartments must pay the same maintenance fee. This law also outlines the process for increasing or implementing extraordinary fees, which must be approved by two-thirds of the owners' assembly. Furthermore, in some "criminal" cases, apartments will pay a lower fee based on their size.
Failure to make this payment will result in penalties, and in extreme cases, even the registration of mortgages on the property and it may be subject to seizure for non-payment.
4. Possible renovations or repairs:
The renovations or repairs needed in an empty property will be less extensive, as there's no risk of misuse of its infrastructure. However, factors such as weather, rainstorms, deteriorating installations, damaged pipes, etc., can affect the property, and it may eventually require some refurbishment to remain marketable in optimal condition. Recommendation: Even if you don't live there, visit the property regularly to ensure there are no issues with dampness, pests, etc.
5. Mortgage:
This point will depend on whether you already own the property or if, on the contrary, you are still paying for it. Obviously, if you are in the second situation and have to pay a mortgage, the expense of your empty property is quite a burden!.
The author is:
Real estate advisor at Plusval Dominicana, architect, appraiser, former President of AEI, Director of AEI Women.
