Buying in The Bahamas FAQ
Why invest in the Bahamas?
Besides ideal climate and lifestyle with many exquisite islands and cays to explore, some of the worlds best beaches there are more reasons why foreign investors should invest in the Bahamas:
- No taxes on capital gains, inheritance, withholding, profit remittance, Corporate, Royalties, Personal Income, Dividends, Payroll and Interest Taxes;
- Safe investment climate that has created a demand for up-scale investment properties with positive property returns.
- Modern infrastructure such as roads, ports and airports.
- Close proximity to the US, a common time zone with New York and Toronto
What are the costs involved in buying/selling a property in the Bahamas?
Seller Costs: In a gross sale the seller is responsible for the payment of 50% of the government VAT on the conveyance, the seller’s legal fees and Real Estate Agent’s Commission which is 6% for developed or 10% for undeveloped properties;
Buyer Costs: The buyer is responsible for the payment of 50% of the government VAT on the conveyance and the buyer’s legal fees.
Please refer to our Closing Costs and Property Taxes under Investing in The Bahamas page for more detailed information.
What property taxes do you have to pay?
The Government Tax on Property Conveyances
The Government tax on the conveyance of real property is a graduated tax. The total amount of the tax is calculated as follows:
• Purchases with a value under $100,000.00 are assessed at 2.5% of the consideration.
- Purchases with a value over $100,000.00 are assessed at 10% of the consideration.
The usual practice in the Bahamas is for the tax to be shared equally between buyer and seller unless otherwise agreed upon.
Government Value Added Tax (VAT )
As of July 1, 2018 the Bahamas Government has imposed a 12% Value Added Tax (VAT) on all products and services including real estate services, appraisals, legal work, commissions and insurance.
Annual Real Property Tax
On owner-occupied properties:
- First $250,000 – Exempt
- Between $250,000 to $500,000 the tax rate is 3/4 of one percent.
- On the portion over $500,000, the tax rate is 1% of the market value of the property.
On vacant land (owned by non-Bahamians):
- First $7,000 of market value , the tax rate is $100
- More than $7,000 the tax rate is 2% of the market value
For commercial and other improved properties:
- First $500,000 of market value, the tax rate is 1% of the market value;
- On the portion over $500,000 the tax rate is 2% of the market value.
Can a non-Bahamian purchase a property in The Bahamas?
The International Persons Landholding Act, 1993, Amended in 2007 gave non- Bahamian nationals the right to purchase property in the Bahamas. Typical form of ownership is freehold.
Does a foreign investor require a permit to acquire a property in the Bahamas?
No prior government approval is required for Non-Bahamians who wish to acquire an interest in land or a condominium to be used as an owner-occupied property, provided that such land is undeveloped and it is less than two adjoining acres. Such acquisitions are required to be registered in accordance with the International Persons Landholding Act, 1993 Amended in 2007. Application for Certificate of Registration Form I must be filed with the Bahamas Investment Authority (BIA), Office of the Prime Minister. Contact BIA for a complete list of the required documentation.
A Permit to Acquire Property is required by non-Bahamians, as provided under the International Persons Landholding Act, if:
- The property being purchased is greater than two acres.
- The intention is to rent out all or a portion of the property.
- The property being purchased is for commercial development.
Bahamians are also required to apply for a permit where the intended use is not as an owner-occupied property.
Do I need any special approvals in order to build on a property or to make any changes to an existing structure?
Yes. To build or restore a property, you will need to obtain an approval from the Town Planning Board and a building permit issued by the Ministry of Works. A local architect or engineer would be able to assist you with this.
May I use the services of a non-resident architect?
Yes, but that architect cannot work in the Bahamas without a permit to do so. All building plans submitted to the Town Planning Board and the Ministry of Works must be signed off by a local licensed architect and local engineers. As in any jurisdiction, there are local customs and procedures required in getting the job done and it is recommended that you utilize the services of the local professionals.
Is it possible to establish residency in the Bahamas and if so how does one go about it?
Yes, non-Bahamian nationals whopurchase a residence valued in excess of $750,000.00 are eligible to apply for a permanent residence or an annual permit to reside in the Bahamas.
Is it possible to obtain Bahamian citizenship?
Yes it is possible, however this is a long process typically favor is given to long-term permanent residents and spouses of Bahamians.
Is it possible to live and work in The Bahamas?
Yes, it is possible, however the policy of the Bahamas Government is to protect the well being and provide maximum employment opportunities for Bahamians. In order to obtain a work permit in The Bahamas an employer must demonstrate that there is not a Bahamian ready willing and able to fill the position.
Can investor repatriate the proceeds of sale of a property?
Yes, investors can repatriate the entire proceeds of sale including any profits because there are no capital gain taxes in the Bahamas,. Please note, you must register the purchase with the Exchange Control Department of the Central Bank at the time of purchase. Your Real Estate attorney will register the purchase for your at your request.
Is finance easily available for buying Bahamian properties?
Some major international banks have a significant presence in The Bahamas, including HSBC, Credit Suisse, Pictet Bank & Trust, UBS, SG Hambros, Cititrust, Ansbacher, JP Morgan, Royal Bank of Canada, Scotiatrust and CITCO. Most of them offer mortgages to Bahamian nationals and permanent residents up to 25 years and as little as 10% down. Downpayment and other conditions vary, so please consult a local banker for the latest offers.
Can foreign nationals qualify for local mortgages and what are the restrictions?
Lending institutions may grant mortgages to foreign nationals; interest rates, restrictions and down payment requirements may vary from institution to institution.
Is title insurance available in The Bahamas?
Yes. There are companies in the Bahamas offering title insurance. The risk premium generally runs between 0.20% – 0.27% of value.
Do I need to engage the services of a local attorney when purchasing property?
An appointment of a local attorney is highly recommended. Apart from ensuring that the documents of title are properly prepared and are in good order the local attorney, when representing the buyer, gives an Opinion on the title to the property. This Opinion is considered to be the same as title insurance as the lawyer is liable should the purchaser find that there is a defect in the title. Local lawyers carry indemnity insurance.
Are Brokers and sales agents in The Bahamas licensed?
Yes. Brokers and sales agents are licensed by The Bahamas Real Estate Association (BREA). BREA is an international member of The National Association of Realtors (NAR) and many BREA members are International Members of NAR and hold various accreditations offered by NAR including GRI, CRS, CRB, CIPS and CCIM. A few members are also members of the International Federation (FIABCI).
Can I ship furniture and household items?
This is easily handled by a shipping or airfreight company which makes moving and decoration quite easy. A detailed inventory of items with approximate value is need and we suggest using local customs broker to assist with clearing your items.
Where are most popular communities in the Bahamas?
The most sought after areas in the Bahamas at the moment are gated residential communities in New Providence and Paradise Island, such as: Lyford Cay, Old Fort, Sandyport, Ocean Club Estates, Nautica, Port New Providence. Popular residential communities in the family islands include: Harbour Island, Eleuthera; Hope Town, Abaco; and George Town, Exuma and The Exuma chain of islands.