Buying a home in paradise?
WHAT-TO-DO - FREEPORT/LUCAYA & GRAND BAHAMA ISLAND - JAN 2007
Buying a home in paradise?
BREA agents make it easy
Bewitched by the subtropical climate of Grand Bahama and the friendliness of its natives, thousands of foreigners have purchased a second home on the island in recent years.
Of course, there?s more than sunny skies to tempt would-be buyers. The Bahamas boasts nearly 300 years of democratic rule; it has a solid economy built on tourism, banking and financial services; better prices than neighbouring Florida and a historic respect for private ownership. Property is conveyed in fee simple here?meaning ownership in perpetuity, rather than leasehold for a specified term.
When you?ve decided to buy, there are formalities to follow, just as there are everywhere around the world. The important thing is to ensure that your real estate agent is fully accredited by the Bahamas Real Estate Association (BREA). Along with a Bahamian attorney, the agent will steer you safely through the steps.
Financing
You can arrange financing back home but several Bahamian banks will draw up mortgages for foreign nationals, just ask your agent.
By local custom, the buyer usually deposits 10 per cent of the purchase price in the attorney?s escrow account when the seller agrees to an offer.
Barring unusual circumstances, it takes between 60 and 90 days to complete the various approvals required before the sale is finalized.
Stamp taxes
As with real estate purchases in other countries, certain fees and taxes are associated with the purchase of property.
The Bahamian stamp tax is a one-time fee paid at the time of purchase. Customarily, the buyer and seller split the bill, but this is often a matter of negotiation between them. The tax is assessed on the sale price of the property as follows:
? up to $20,000 ? 2%
? $20,001-$50,000 ? 4%
? $50,001-$100,000 ? 6%
? $100,001-$250,000 ? 8%
? $250,001 or more ? 10%
Annual property taxes are also based on the value of your property. For owner-occupied residential homes the rates are:
?up to $250,000 ? exempt
?$250,001-$500,000 ? 3?4%
?$500,001 or more ? 1%
Vacant land owned by non-Bahamians is taxed as follows:
?up to $3,000 ? $30
?$3,001-$100,000 ? 1%
?$100,001 or more ? 11?2%
The real estate agent?s commission is normally paid by the seller, and the usual fee is 6 per cent for improved property and 10 per cent for raw land.
Lawyers generally charge 2.5 per cent of the purchase price for their services. This includes title searches and an application in your name for all required permits.
If you?re planning to live in The Bahamas full time, you?ll need a residency permit.
As a homeowner, you can obtain an annual homeowners residence card from the immigration department, which allows the homeowner, spouse and minor children to live in The Bahamas for the duration of the permit.
Owners of homes worth more than $500,000 may apply for permanent residency status. This requires a due diligence security and character check that may take several months to complete, although the immigration department announced in late 2006 that it was streamlining the process. Both permits restrict employment in The Bahamas.
For a complete rundown on real estate investment, residency, permits and expenses, check the Blue Pages of the 2007 edition of the Bahamas Handbook and Businessman?s Annual.
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