The following information answers many of the main concerns prospective buyers have when looking to invest in property in The Bahamas. We have tried to make this a comprehensive guide to the general rules and regulations, but if you have other questions, please e-mail them to us at email@example.com, and we shall endeavor to answer them for you.
What kind of properties do you sell in The Bahamas and what islands are they on?
Bahamas Realty Limited is a full-service real estate company. We sell both residential and commercial properties, include vacant land, acreage, single-family homes, condominiums, private islands, resort properties, office/retail buildings, shopping centers, and warehouses.
We are the exclusive associate in The Bahamas for Luxury Portfolio and a member of the Leading Real Estate Companies of The World and Who’s Who in Luxury Real Estate. On the commercial side we are the exclusive member of NAI Global.
Are brokers and sales advisors in The Bahamas licensed?
Yes. Brokers and sales advisors are licensed by The Bahamas Real Estate Association (BREA). Qualifications for licensing include sitting a written exam. BREA is an international member of The National Association of Realtors (NAR) and many BREA members are International Members of NAR and hold various accreditations offered by NAR including GRI, CRS, CRB, CIPS and CCIM. A few members are also members of the International Federation (FIABCI). The public is urged to ask and only use the services of a BREA member.
What are the costs involved in buying or selling property?
VAT (Value Added Tax) - Unlike standard VAT, which is charged and paid at a rate of 10% on the supply of goods and services, the VAT on real estate transactions is a graduated tax. When the value of the consideration is less than $100,000, the rate is 2.5% When the value of the consideration is $100,000 and over, the rate is 10%.
*The usual practice in the Bahamas is for the tax to be shared equally between buyer and seller unless otherwise agreed upon.
* First-time Bahamian buyers may be exempted from VAT on a dwelling house or vacant land purchased for a dwelling house, up to the value of $500,000.
Legal Fees – Although this can vary, legal fees average 2.5% of the purchase price
Real Estate Commission – 6% on improved property, 10% on vacant land and businesses
*The seller is typically responsible for paying the real estate commissions.
What is the Rate of Real Property Tax in The Bahamas?
Owner-occupied property (owner resides and uses exclusively as a dwelling):
* 1st $250,000 of property value: Exempt
* Next $250,000 of property value: 0.625% of the next $250,000 of property value
* Above $500,000 of the property value (balance): 1% of the remaining part of the value
Residential properties (has 4 units or less, and used solely as a dwelling place):
* 1st $75,000 of property value: $300 flat fee
* Anything above the first $75,000 of the property value (balance): 0.625% of remaining property value
Commercial properties (above 4 units even if used as a dwelling place):
* 1st $500,000 of property value: 0.75% of property value
* Anything above $500,000 (balance): 2% of remaining property value
Vacant land for foreigners:
* 1st $7,000 of property value: $100 flat fee
* Anything above $7,000: 2% of remaining property value.
Bahamian citizens are not taxed on unimproved property in The Bahamas
How do I go about getting a mortgage?
Most major banks and life insurance companies offer mortgages to Bahamians, permanent residents and foreign investors. It is advisable to contact your local bank as soon as you decide upon purchasing a property. Your real estate advisor can supply a list of providers.
In what form is title to property given?
The vast majority of property is sold freehold. There are a few exceptions of leasehold properties. These properties are generally Crown Land (Government-owned) properties that are leased for agricultural or development purposes.
Do I need to engage the services of an attorney when purchasing property?
The appointment of a local attorney is highly recommended. Apart from ensuring that the documents of title are properly prepared and are in good order the local attorney, when representing the buyer, gives an Opinion on the title to the property. This Opinion is considered to be the same as title insurance, as the lawyer is liable should the purchaser find that there is a defect in the title. The opinion of title is insured under the indemnity insurance of the law firm.
Is title insurance available in The Bahamas?
Yes. There are companies in the Bahamas representing major international title insurance companies offering title insurance.
Why should foreign property investors consider buying a home in The Bahamas?
The Bahamas attracts a very wide range of property investors, from large multi-million dollar estate properties to modest condominiums or homes. The exquisite locations of properties in the Bahamas, coupled with a safe investment climate, have created a demand for investment properties with positive property returns. The Bahamian lifestyle is one that draws people back time and time again. Communities here have expanded to encompass extensive lifestyle, fitness, epicurean and social opportunities that are world-class while maintaining the relaxed atmosphere famous to the Caribbean.
Is it possible for a non-Bahamian to purchase property in The Bahamas?
Yes. Overseas Investors may acquire residential properties in The Bahamas of up to five acres without prior Government approval. Such acquisitions are required to be registered in accordance with the International Persons Landholding Act.
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.
Is it possible as a non-Bahamian to live in The Bahamas?
Yes. As an owner of a property valued at a minimum of $250,000 you can apply for annual residency. An owner of a property valued at $750,000 or greater qualifies you to apply for Economic Permanent Residency. Accelerated consideration is given to applicants whereby the investment exceeds $1.5 million.
What taxes do you have in The Bahamas?
First and foremost we have no income tax, capital gains taxes or inheritance taxes. There is no sales tax with the exception of VAT (value added tax).
The Bahamas Government’s main source of revenue is from customs duties on all goods imported into The Bahamas. This tax may be as low as 0% as in the case of computers and computer software, and as high as 65% in the case of all non-hybrid cars, and 220% on cigars. The typical rate of duty is around 35%. The 10% VAT is applied on top of duty in most instances.
Do I need any special approvals in order to build on a property or to make any changes to an existing structure?
Yes. You will need to obtain approval from the Town Planning Board and a building permit issued by the Ministry of Works. A local architect or engineer would be able to assist you with this.
Are there qualified architects, contractors and engineers available in the islands?
Yes. Most, if not all architects in the Bahamas were schooled either in the United States, Canada or the United Kingdom and have international accreditations. There is a local licensing Board for architects. The construction industry is also regulated, but the qualifications for licensing are not nearly as rigorous. The leading contractors are all civil engineers with international accreditations or have certified engineers on staff. Many of the smaller contractors are products of a good apprentice system and are very adept and skilled at efficiently carrying out residential construction. Civil, mechanical and electrical engineers in the Bahamas, like the architects, were schooled in other countries and hold international accreditations from those respective countries and must also have a license issued by their respective local Boards.
May I use the services of a non-resident architect?
Yes, but that architect cannot work in the Bahamas without a permit to do so. All building plans submitted to the Town Planning Board and the Ministry of Works must be signed off by a local licensed architect and local engineers. As in any jurisdiction, there are local customs and procedures required in getting the job done and it is recommended that you utilize the services of the local professionals.