Looking to buy? Currently, the real estate market in The Bahamas is doing really well, and it’s a buyer’s market, particularly for properties in excess of $700,000. There are hundreds of properties for sale on several islands in every price range.
In this guide, we’ll break down the real estate costs so you’ll know what to prepare for on your home buying journey.
Need Financing?
Local banks offer BSD$ and US$ Mortgages to finance the purchase of a home or property in The Bahamas. Generally, a 30% deposit is required with interest rates slightly higher than in the US prime rate.
Real Estate Commissions
In The Bahamas, there is a 6% commission for developed property and 10% commission for vacant land.
Legal Fees
Both the buyer and the seller must be represented by a Bahamian attorney. Fees vary.
Bahamas Government Value Added Tax (VAT)
As of July 1, 2018 The Bahamas Government has imposed a 12% Value Added Tax (VAT) on Real Estate Commissions and Legal Fees.
Government Taxes on Property Conveyances
There is a 10% Government Stamp Duty on all property transactions valued at $100,000 or more.
Unless otherwise agreed upon, the usual practice in The Bahamas is for the tax to be shared equally between the buyer and seller. A 12% Value Added Tax (VAT) is charged on real estate services, including appraisals, legal work, and commissions.
The laws and policies are subject to change.
Annual Property Tax Rates
As of 2018, the rates of tax on property are as follows:
Tax rates 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 0.625%
- More than $500,000 and not exceeding $5,000,000 of market value is 1%
- More than $5,000,000 of market value is ½%
Tax rates 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%.
Tax rates of any other property:
- First $500,000 of market value is 1%
- More than $500,000 of market value is 2%
Tax Exemptions
- Property owned by Bahamians that is located in the Family Islands is exempt from any property tax.
- Unimproved property owned by Bahamians, meaning property without physical additions or alterations, or any works benefiting 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
- 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.
Foreign Buyers: Obtaining Permanent Residency Status
Foreign buyers investing in a residence valued at $750,000 and over, may apply to the Department of Immigration for Permanent Residency status. Holding a Permanent Residency certificate can lead to significant tax advantages in your home country. The purchase of a residence costing $1.5 million provides accelerated consideration for the application.
Foreign Buyers: Annual Homeowners Residence Card
Available to any homeowner in The Bahamas. Obtained from the Director of Immigration, it allows the permit holder, and family, to enter and remain in The Bahamas for the period of the permit.