Buyers Guide

FEES AND COSTS

GOVERNMENT TAXES ON CONVEYANCES

Government taxes are usually shared equally between buyer and seller in The Bahamas unless otherwise agreed.

• 2.5% Value Added Tax (VAT) on property transactions of $100,000 or less.
• 4% Value Added Tax (VAT) on property transactions of more than $100,000 but less than $300,000.
• 6% Value Added Tax (VAT) on property transactions of more than $300,000 but less than $500,000.
• 8% Value Added Tax (VAT) on property transactions of more than $500,000 but less than $700,000.
• 9% Value Added Tax (VAT) on property transactions of more than $700,000 but less than $1,000,000.
• 10% Value Added Tax (VAT) on property transactions of more than $1,000,000.

First-time home buyers who are Bahamian citizens:

• 4% Value Added Tax (VAT) on property transactions of more than $300,000 but less than $500,000.

Long Term Leases:

• 2.5% Value Added Tax (VAT) on property transactions of less than $100,000.
• 10% Value Added Tax (VAT) on property transactions of more than $100,000.

A 10% Value Added Tax (VAT) is charged on real estate services, including appraisals, legal work, commissions, and insurance. Laws and policies are subject to change.

LEGAL FEES

Both buyer and seller need legal representation by a Bahamian attorney. Legal fees vary and it is wise to shop around. Legal fees are also subject to a 10% Government VAT charge.

BAHAMAS REAL ESTATE COMMISSIONS

• Developed property: 6%
• Undeveloped property (vacant land): 10%

NB. Real Estate Commissions are usually paid by the Vendor in property sales unless otherwise stipulated and are subject to a 10% Government VAT charge.

ANNUAL REAL PROPERTY TAX RATES

Properties in The Bahamas are subject to an annual Property Tax that is based upon the value of the property and also the status of the owner. The Property Tax office will often request an appraisal of your property to properly calculate the value, and subsequently, the tax due based upon value at todays market prices. Property tax bills are issued in October of each year and are due to be paid by December 31st in the same year to avoid a 5% interest charge.

For Owner Occupied Properties:

• 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 0.5% (capped at $50,000 annually)

For Unimproved property:

• First $7,000 of market value is $100
• More than $7,000 of market value 2%

In respect of any other property:

• First $500,000 of market value is 1%
• More than $500,000 of market value is 2%

EXEMPTIONS

• Real Estate owned by Bahamians and situated in the Family Islands
• Real Estate approved as commercial farm land (by the Ministers of Agriculture, Trade and Industry and Finance)
• Unimproved real estate 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
• Real estate owned by foreign governments
• Real estate owned by foreign nations used for consular offices or residences of consular officials and employees
• Real estate used exclusively for charitable or public service from which no profit is derived
• Registered historical buildings

For more information on Property Tax contact:

Business Licence/Valuation Unit
Frederick House
Frederick St.
P. O. Box N-13
Nassau
New Providence
The Bahamas
E-mail: businesslicenceinquiries@bahamas.gov.bs
Opening Hours: 9am to 4pm, Monday to Friday

FOREIGN NATIONALS

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

The International Land Holdings Act 1993 in particular aims to ease the purchase of properties in The Bahamas by non-nationals. All that is required is registration with the Investments Board and the Central Bank. The cost of this registration varies from $25 - $100.

Bahamas immigration policy permits a Homeowners Card to non-Bahamian business or home owners. This gives them rights to enter the country at each port along with their spouse and minor children. Non-Bahamians acquiring properties over $1.5 million are also given accelerated consideration for permanent residency status.

A non-Bahamian wishing to purchase undeveloped lands of 5 acres or more (that will not be used for a private residence) will be required to obtain a permit from the Registrar Generals office