Buyer’s Guide

Government Stamp Tax on Property Conveyances

• 2.5 % Government Stamp Tax on all real estate transactions under $100,000.
• 10% Government Stamp Tax on all real estate transactions over $100,000.

The usual practice in the Bahamas is for the stamp tax to be shared equally between buyer and seller unless otherwise agreed upon.

First time Bahamian purchasers can be exempted of their portion (5%) on their first dwelling or vacant land purchase up to the value of $500,000.

Attorney Fees
Attorney fees vary, but average around 2.5% of the selling price of the property. There is also a small recording fee when the title deeds are recorded at the Public Registry. Buyer and Seller are normally responsible for their own attorney fees. Legal fees are also VAT taxable.

Value Added Tax
As of July 1, 2018, the Bahamas Government has imposed a 12% Value Added Tax (VAT) on all real estate related professional services, such as commissions and legal fees.

Financing Options
For Bahamians and permanent residents, most of the major banks, credit unions and life insurance companies offer mortgages with some offering terms up to 30 years and as little as 10% down.

Lending institutions do grant mortgages to foreign nationals; interest rates, restrictions and down payment requirements may vary from institution to institution. The loan facility may only be given in US$ at international rates and the down payment required is generally on the order of 40% of value.

The Bahamas has no income tax, capital gains taxes or inheritance taxes. There is no sales tax with the exception of the government tax (value added tax) paid on the conveyance of real property. In Freeport, Grand Bahama, properties are exempt from real property tax.

Real Property Tax
Real property taxes are assessable on all real estate in the Bahamas outside of Freeport, Grand Bahama unless the owner is exempt.

Owner Occupied Property

• First $250,000 of market value – Exempt
• The portion of market value between $250,000 and $500,000 – 0.75%
• The portion of market value between $500,000 and $5,000,000 – 1%
• The portion of market value exceeding $5,000,000 – 0.25%

Unimproved Vacant Property (other than exempt properties)

• On market value up to $7,000 – $100.00
• The portion of market value exceeding $7,000 – 1.50%
• On the market value where the property remains undeveloped and two year have elapsed since the non-Bahamian became holder of the property – 7%

Commercial Property:

• First $500,000 of market value – 1% of the market value;
• On the portion over $500,000 – 2% of the market value.

Exemptions:

• Property owned by Bahamians in the Family Islands.
• Property approved as commercial farmland by the Ministry of Agriculture
• Unimproved property owned by Bahamians (in New Providence or the Family Islands) valued below $5,000
• Property used exclusively for charitable or public service from which no profit is derived.
• All property located in Freeport, Grand Bahama.

Effective July 1, 2019, the statutory maximum annual real property tax for owner-occupied properties is $60,000.

The Bahamas welcomes investment by non-Bahamians and has created a number of policy documents to facilitate the purchase of Bahamian property.

Permits are required by non-Bahamians, as provided under the International Persons Landholding Act, if:

• The property being purchased is greater than 2 acres.
• The intention is to rent out all or a portion of the property.
• The property being purchased is for commercial development.

Non-Bahamians who buy land for which a permit is not required must register their purchase with the Foreign Investment Board under such Act.

Non-Bahamians should also register their investment with the Exchange Control at the Central Bank of The Bahamas to ensure that upon resale they will be able to remit the net proceeds of sale outside the Bahamas in the currency of the original investment.

Permanent Residency
The Bahamas has a liberal process for granting Economic Permanent Residency (EPR) that makes it easier for individuals to “follow their money” with respect to where they live and work. There are many personal benefits to Bahamas Permanent Residency with the main ones being The Bahamas has no capital gains taxes, capital transfer taxes, personal income tax or estate tax.

Persons with permanent residence are for all intents and purposes treated like Bahamians, except for the right to vote. Acceleration of the permanent residence application is available for persons who spend a minimum of $500,000 on a residence. For more substantive investments of $1.5 million or greater, applications will be reviewed within 21 days. Permanent Residence allows the holder to pass freely through Immigration. There is no requirement to be in the Bahamas for a minimum or maximum number of days. Spouses and children are endorsed on the permit for a one-time government fee of $10,000.

Permanent residence is a status issued to an individual for the duration of his/her life, unless revoked, and gives him/her the right to live and or work, but not the right to vote in The Bahamas.

Annual Residency
Annual residency cards are available to homeowners owning Bahamian Real Estate at any price point and can be renewed annually. The annual residency card allows the permit holder and their family to reside in The Bahamas for the duration of the permit. This card does not confer permanent residency privileges but does permit the holder to move freely through Immigration at any port of entry.

Entry Visas
Citizens of the United States of America, Canada, and the United Kingdom are not required to have an entry visa as long as their stay is less than 8-months and they can show proof of a return ticket departing the Bahamas. Visitors cannot engage in gainful employment without a permit issued by The Bahamas Department of Immigration.