Foreign nationals are encouraged to acquire residential properties in The Bahamas. Underscoring the new attitude towards investors, the Government repealed the Immovable Property Act which required prior approval for the purchase, transfer or inheritance of real property by non-Bahamians.
It has been replaced by the International Persons Landholding Act, 1993. The new act considerably eases the process of foreign ownership of homes and real estate.
Prior Government approval is not required for non-Bahamians to purchase residential properties of less than two acres. Such acquisitions are, however, required to be registered with the Investments Board and the Central Bank.
The new act has begun to fuel the revival of the second home market in The Bahamas and makes the assets of The Bahamas more accessible to those who enjoy living and/or doing business in paradise.
The Government has also adopted an accommodating stance on the granting of residency permits to non-Bahamian investors and homeowners. Major international investors and owners of residences valued at $1.5 million or more are accorded accelerated consideration for annual or permanent residency permits.
A homeowner's card is available to all non-Bahamian owners of residences. The card facilitates immigration formalities at all Bahamian ports of entry and entitles the homeowner, his/her spouse and minor children to enter and remain in The Bahamas for the duration of the validity of the card.:
Purchasing Costs
All real estate commissions in the Bahamas are based on the total gross sales price of the property and are fixed by the Bahamas Real Estate Association (BREA). It is required by law that all advertised property prices are gross prices which includes sales commission, sellers stamp tax and legal fees. The buyer has to pay his half of the stamp tax and his legal fees on top of that.
Stamp Tax
A graduated tax is payable on the conveyance of all real property in the Bahamas based on the value as follows:
When the value of the consideration is less than or equal to $20,000, the rate is 4%
When the value of the consideration is greater than $20,000 and is less than or equal to $50,000, the rate is 6%
When the value of the consideration is greater than $50,000 and is less than or equal to $100,000, the rate is 8%
When the value of the consideration is greater than $100,000 and is less than or equal to $250,000, the rate is 10%
When the value of the consideration is greater than $250,000, the rate is 12%
The usual practice in the Bahamas is for the tax to be shared equally between the buyer and the seller unless otherwise agreed upon.
Legal Fees
The fee charged by the lawyer who prepares the conveyance is normally 2 1/2% of the gross sales price.
Registration fees for non-Bahamian purchasers
Application for registration - $25
Application for permit - $25
Certificate of Registration:
(i) the value of the property is $50,000 or less - $50
(ii) the value of the property is over $50,000 but under $101,000 - $75
(iii) the value of the property is $101,000 and over - $100
Home owner resident card - $50
Annual Real Property Tax
The rates of tax on real property are as follows
In respect of owner-occupied property:
The first $250,000 of market value is tax exempt
More than $250,000 and not exceeding $500,000 of market value is ¾%
More than $500,000 and not exceeding $5,000,000 of market value is 1%
More than $5,000,000 of market value is .25%
In respect of unimproved property other than unimproved property exempt by virtue of Section 39 of the Real Property Tax Act:
First $7,000 of market value is $100
More than $7,000 of market value 1½%.
In respect of any other property:
First $500,000 of market value is 1%
More than $500,000 of market value is 2%
Market value is defined as the amount the property would realize, if sold in the open market, without any encumbrances or restrictions. If the return is not filed, the owner is guilty of an offense, and upon conviction thereof, may be fined. Persons knowingly making false statements may be liable to fines, imprisonment, or both fines and imprisonment. If the tax is not paid on or before the last day the tax becomes due, a surcharge will be added.
In the case of an extension of time, the Chief Valuation Officer may postpone the date on which the tax is payable in a particular case, by notice in writing.
Exemptions
Property owned by Bahamians and situated in the Family Islands is exempt from property tax. Property approved as commercial farm land (by the Minister of Agriculture and Marine Resources, and the Minister Finance) may be eligible for property tax exemptions.
Unimproved property owned by Bahamians, meaning property without physical additions or alterations, or any works benefitting the land which have not increased the market value thereof by $5,000 or more;
Places of religious worship; school buildings and their gardens and playing areas;
Property owned by foreign governments;
Property owned by foreign nations used for consular offices or residences of consular officials and employees;
Property used exclusively for charitable or public service from which no profit is derived.