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Owning property in paradise
What you need to know before buying in The Bahamas
If owning your own slice of paradise seems too good to be true, think again. Buying property in The Bahamas is easier than you may think.
For one thing, you don’t have to be a resident of The Bahamas to purchase property here, whether it’s a home or land. The International Persons Landholding Act of 2009 makes it simple for non-Bahamians and their companies to buy real estate without risk. The property could be for your own use or an investment, and because real estate is held freehold, it grants owners permanent and absolute tenure of the property, so it may be used, sold or assigned in a will without restrictions.
Before purchasing property in The Bahamas, keep in mind that it’s important to deal with a realtor accredited by the Bahamas Real Estate Association (BREA). There are several BREA-accredited agents who can help you with the steps you need to follow to purchase your property. They are particularly helpful with recommending a lawyer and a local bank, several of which offer loans to foreign nationals, whether they are a resident of The Bahamas or not.
However, it is important to know that the government collects a one-time stamp duty on mortgages at a rate of one per cent of the amount borrowed. Also, real estate agents charge a 10 per cent commission on the sale of undeveloped property and six per cent on developed residential or commercial property. Agents charge 10 per cent commission for Family Island property, whether land, home or commercial.
In addition to fees for lawyer’s and real estate agent services, permit applications are required to ensure a smooth property purchase.
A non-Bahamian who buys or acquires an interest in a condominium or property to be used as an owner-occupied property must apply to the Secretary to the Investments Board to register the purchase. An application for registration (Form 1) must be filed with the Bahamas Investment Authority, Office of the Prime Minister, along with proof of ownership, payment of stamp duty and real property tax and a banker’s draft or money order for $25 made payable to the Public Treasury. Upon receipt, the acquisition is registered and a certificate of registration is issued.
A permit to acquire property is needed if the property is undeveloped land and comprises two or more acres, a commercial property or if the residence is intended for rental.
The schedule of fees for a certificate of registration and permit are:
Application for registration…$25
Application for permit…$25
Upon issue of certificate of registration or issue of permit where the property value is:
$50,000 and under…$50
More than $50,000 and less than $101,000…$75
More than $101,000…$100
Additional fees are charged for the purchase of property in The Bahamas. A government stamp tax, a one-time payment due at closing, is usually split 50/50 by buyer and seller, unless otherwise agreed.
Government stamp duty on property conveyances or realty transfers is as follows:
$0-$20,000…4%
$20,000.01-$50,000…6%
$50,000.01-$100,000…8%
$100,000.01-$250,000…10%
Over $250,000…12%
In property sales, the lawyer who prepares the conveyance typically charges a fee of 2.5% of the sale price or a minimum fee, whichever is greater.
Effective until July 2013, first-time homeowners may apply for an exemption to the Government Stamp Tax.
Homeowners wishing to purchase energy-saving appliances and fixtures will be entitled to reduction or elimination of duty on those items. Duty-free exemption is also granted on solar equipment.
Residency permits
Non-Bahamians who wish to reside in The Bahamas on an annual basis may qualify under one of four categories, subject to formal application and approval process.
These include an independent economic resident, a resident homeowner or a seasonal resident homeowner.
In the case of an independent economic resident, the applicant must provide a financial reference from a reputable bank verifying economic worth and two written character references. For an annual residence permit, a head-of-household pays $1,000 and each dependent, $25.
A resident homeowner or seasonal resident homeowner who owns a second home in The Bahamas may apply to the director of immigration for an annual homeowner’s residence card. The card is renewable annually and entitles the owner, spouse and minor children to enter and remain in The Bahamas for the period specified on the card. The fee is $500 per year and is intended to facilitate entry in The Bahamas for a stay of up to one year.
These permits and cards do not allow the owner, spouse or dependents to be employed in The Bahamas.
Accelerated consideration of applications for annual or permanent residence is given to major international investors and owners of residences valued at $500,000 or more.
Property tax
Property tax must be paid by Bahamians and non-Bahamians owning real property and is due on or before Dec 31 each year. Returns are filed with the Chief Valuation Officer and paid to the Public Treasury.
Tax rates are based on “market value” (the amount the property would realize if sold in the open market without encumbrances or restrictions) and are as follows:
Owner-occupied property (residential and licensed rental homes)
• The first $250,000 of market value…Exempt
• Between $250,000 and $500,000…3⁄4%
• Between $500,000 and $5 million…1%
• Over $5 million…3⁄4%
Vacant land owned by non-Bahamians:
• First $7,000…$100
• Over $7,000…11⁄2%
All other properties/commercial:
• First $500,000…1%
• Over $500,000…2%
In Grand Bahama, no property taxes are collected from owners of properties located within the Grand Bahama Port Authority area of Freeport/Lucaya, but an annual fee is levied for trash removal, street maintenance and landscaping services.
Helpful contacts
Bahamas Chamber of Commerce: Shirley St and Collins Ave, PO Box N-665, tel (242) 322-2145, e-mail info@thebahamaschamber.com, www.thebahamaschamber.com
Bahamas Real Estate Association (BREA):10 Dowdeswell St, PO Box N-8860, tel (242) 356-4578 or (242) 325-4942, e-mail junebrea@coralwave.com,www.bahamasrealestateassociation.com
Bahamas Bar Association:Elizabeth Ave, PO Box N-4632tel (242) 326-3276,www.bahamasbarassociation.com
Association of International Banks & Trust Companies (AIBT):Goodman's Bay Corporate Centre, West Bay St, PO Box N-7880, (242) 356-3898, e-mail info@aibt-bahamas.com, www.aibt-bahamas.com
Central Bank of The Bahamas:Frederick St, PO Box N-4868, tel (242) 302-2600, e-mail centralbankbah@batelnet.bs, www.centralbankbahamas.com
Bahamas Investment Authority (BIA): Office of the Prime Minister, Sir Cecil Wallace-Whitfield Centre, West Bay St, Cable Beach, PO Box CB-10980,
tel (242) 327-5826/8 or (242) 327-5940/44, www.bahamas.gov.bs
Immigration Dept:Main office: Hawkins Hill, PO Box N-831, tel (242) 322-7530/32 or (242) 322-8504, www.bahamas.gov.bs
Registrar General’s Dept (Civil Registry): 50 Shirley St, PO Box N-532, Nassau, tel (242) 323-0596, www.bahamas.gov.bs
Treasury Dept:British American House, George St, PO Box N-7524, tel (242) 322-4561/5, www.bahamas.gov.bs
Lands & Surveys Dept:Bay and Armstrong Sts, PO Box N-592, (242) 502-1200, www.bahamas.gov.bs
Professional Architects Board:143 Nassau St, PO Box CB-13040, tel (242) 326-3114, e-mail bdmanager@coralwave.com, www.bahamasarchitects.com
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Owning property in paradise
What you need to know before buying in The Bahamas
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