What are the Fees and Costs of Purchasing Property in the Bahamas?
- Purchase Price of the Property.
- Legal Fees — 2.5% of the gross purchase price (negotiable).
- Government Stamp Duty — 2.5% of the value of when less than $100,000.00 and 10% of the value when over $100,000.
The stamp (duty) tax is shared equally between buyer and seller unless otherwise agreed upon.
Exemption for First Time Home Owners
The exemption from stamp duty for first time home owners has now been extended to 30th June 2023. However, all applications for the exemption must be made within twelve months of the date of the conveyance to the applicant. The Affidavit sworn by the applicant which accompanies the application must now state that there is not and never has been any other dwelling house held by the applicant or on his behalf situated in or outside of The Bahamas.
Applications for first time home owner stamp duty exemption on conveyances executed on or after 1st January 2003, must be submitted on or before 31st December 2018.
Value Added Tax
The Value Added Tax Act has been amended to make all transfers of real property exempt from value added tax, with the exception of commercial leases which remain subject to value added tax.
A 12% Value Added Tax (VAT) is charged on real estate services, including appraisals, legal work, commissions and insurance.
Laws and policies are subject to change.
What is the Annual Property Tax in the Bahamas?
REAL PROPERTY TAX
The Bahamas Government has developed a modern and equitable system of property taxation:
As of 1st January 2019, an owner that resides in their property for less than six months in any given year will be required to pay real property taxes annually at the rate of 0.75% on that part of the market value which does not exceed $500,000.00 and 2% on that part of the market value which exceeds $500,000.00.
This applies to Bahamian citizens, permanent residents and second home owners who do not reside in their property for a minimum of 6 months. Accordingly, the statutory maximum annual tax of $50,000.00 which applies to owner-occupied property, will not apply in such instances.
Increased rate of Real Property Tax for Vacant land owned by Non-Bahamians
The annual real property tax payable in respect of unimproved land owned by non-Bahamians on that part of the market value which exceeds $7,000.00 has been increased from 1.5% to 2%.
Transfer of property to the Treasurer to satisfy outstanding real property taxes and surcharges
A new section has been inserted into the Real Property Tax Act that will allow persons who have outstanding real property taxes and surcharges to make application to transfer their real property to the Treasurer to satisfy unpaid sums. The application must state: (i) the applicant’s inability to pay the unpaid sums; (ii) any reasonable steps taken by the applicant to satisfy the unpaid sums; (iii) the name of all legal and equitable owners of the property; and (iv) whether there are any liens or other charges on the property.
Who Buys in the Bahamas?
The islands of the Bahamas have a unique and wonderful history behind them!
Currently, people from all over the world call Bahamas their home. Locals are very proud of their island heritage and celebrities and sports stars have purchased beach bungalows, private islands and investment opportunities and more! There is something for everyone!
Majority of international buyers are from the U.S. but there is a good mix of Canadian, European, Russian, Chinese and South American buyers.
How Can I get Financing to Purchase in the Bahamas?
The majority of international buyers are cash purchasers.
There are several local banking institutions that assist in property financing and home mortgages. Banks such as:
- CIBC FirstCaribbean International Bank
- RBC Royal Bank Bahamas Limited
- Scotiabank Bahamas Limited
These banks can provide details and requirements for USD financing and local BSD lending options.
After I purchase a property will I be able to repatriate the proceeds of sale whenever I sell it?
Yes. You will be able to repatriate the entire proceeds including any profits provided you register the purchase with the Exchange Control Department of the Central Bank at the time of purchase.