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An Expat Guide To Buying Property In The Bahamas

The Bahamas is made up of 700 islands and 2,400 cays in the Atlantic Ocean. It is located to the north of Cuba and southeast of Florida. The archipelagic state has a population of nearly 400,000, the majority of which are people of West African descent. The rest of the population consists of descendants of European and Latin American settlers.The Bahamas is among the richest countries in the Americas, with tourism and the financial services being the prime contributors to the country’s GDP. These sectors also account for 50 percent of employment. Expats are likely to find employment in these two sectors. Not all expats move to the Bahamas for professional reasons. Many of them are also retirees who wish to spend their retirement years on the islands. In the Bahamas, expats will find an excellent healthcare system with many modern hospitals that are well-equipped and have a highly trained staff. The main language of the islands is English and the islands have several local and international schools. The Bahamas, with its tropical beaches and pristine seas, is the place to be for those who want to enjoy a relaxed lifestyle.

The Bahamas attracts a variety of property investors ranging from those who have bought large estate properties worth millions of dollars, to those who opt for condominiums or homes that fall into the price range of $150,000 – $400,000. The demand for upscale investment properties with good property returns has increased due to the choice locations, especially in the New Providence and Paradise Island regions, along with a safe investment climate. The major attraction for property buyers is the relaxed Bahamian lifestyle.

Can expats buy property in the Bahamas?

Non-Bahamians can purchase property in the Bahamas according to the International Persons Landholding Act 1993, which permits the sale of property in the Bahamas to non-citizens. The Act stipulates that certain permits are required for non-Bahamians if:

• The property being bought is more than 2 acres
• The intention is to rent out all or a part of the property
• The property being purchased will be used for commercial development

Expats who purchase land for which a permit is not necessary must register the property with the Foreign Investment Board.

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Expats are required to also register their property with the Exchange Control at the Central Bank of the Bahamas to ensure that when the resale takes place, they will be able to the remit the net amount of sale outside the Bahamas in the currency of the original investment.

Types of property

Most of the property sold in the Bahamas is freehold. The leasehold properties are usually Crown Lands (property of the state) that are used for developmental or agricultural purposes.

Do you need the services of an attorney when buying property?

It is not necessary to appoint a local attorney when buying property in the Bahamas, but it is strongly recommended. An attorney will ensure that the documents of the title are in order. A local attorney also represents the buyer and provides an opinion on the title to the property. The opinion is similar to the title insurance and makes the lawyer liable if the buyer finds that there is a problem with the title.

© skeeze on Pixabay

Costs involved in the purchase of a property

Seller costs: The practice in the Bahamas is for the sales price to be presented as a gross price. In a gross sale, the seller is required to pay 50 percent of the government stamp tax on the conveyance, the real estate agent’s fees and the seller’s legal fees.

Buyer costs: The buyer is required to pay 50 percent of the government stamp tax on the conveyance and the buyer’s legal fees.

VAT: The government, as of January 1, 2015, has imposed a Value Added Tax (VAT) of 7.5 percent on all real estate conveyances, commissions and legal fees.

Upon selling the property, expats will be able to repatriate the entire amount, which includes any profits. This can happen only if the purchase has been registered with the Exchange Control Department of the Central Bank at the time of buying the property.

Are special approvals necessary to make changes to an existing property?

Yes, expats are required to get approval from the Town Planning Board and a permit from the Ministry of Works in order to build on a property or make alterations to an existing structure. Expats can seek assistance from a local architect or engineer.

Architects, contractors and engineers

The Bahamas has many qualified architects, contractors and engineers. Most architects were trained in countries like the United States, the United Kingdom or Canada and are internationally accredited. The Bahamas has a local licensing board for architects. The qualifications for licensing are not very rigorous when it comes to contractors, but the construction industry is regulated. Most good contractors are civil engineers and are internationally accredited. They also have certified engineers working with them. A number of the smaller contractors come from an apprentice system and are highly skilled at residential construction. Like architects in the Bahamas, many civil, mechanical and electrical engineers are also trained in other countries with international accreditation and have licenses from the local boards.

Expats can use the services of a non-resident architect provided they have a permit as all building plans presented to the Town Planning Board and the Ministry of Works require the signature of a local licensed architect and local engineers.

Brokers and sales agents

Brokers and sales agents in the Bahamas are licensed by the Bahamas Real Estate Association (BREA), which is an international member of the National Association of Realtors (NAR). Many members of the BREA are international members and have various accreditations of the NAR. When buying or selling property, it is advisable for expats to use the services of a BREA member.

Can non-Bahamians and permanent residents avail themselves of local financing?

Yes, this is possible but the loan may only be granted in US dollars at international rates. The down payment required is usually 40 percent of value.


The Bahamas has no income tax, capital gains taxes or inheritance taxes. There is also no sales tax, except for Stamp Duty + Value Added Tax imposed on the conveyance of property. The VAT (7.5 percent), which was implemented by the Bahamian government on January 1, 2015, is a consumption tax and is payable on all property conveyances, commissions and legal fees. With no income tax, capital gains taxes or inheritance taxes, the government earns revenue from customs duties that are imposed on goods imported into the Bahamas. The average rate of duty is approximately 35 percent, and the 7.5 percent VAT is in addition to duty in most cases.

Stamp duty tax
Stamp duty, which is a tax on the conveyance of property, is a graduated tax and the total amount of tax is imposed as follows:

• The rate is 2.5 percent when the value of the consideration is less than $100,000.
• The rate is 10 percent when the value of the consideration is $100,000 and above
• VAT registrants can claim as a credit or net off the 7.5 percent VAT on commercial property sales valued at above $100,000.

In the Bahamas, it is customary for the buyer and seller to share the tax equally, unless other terms are decided. Those who are buying property for the first time may be exempted from the Stamp Duty tax on a residential property or vacant land bought for residential purposes, up to the value of $500,000.

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Real property tax

The latest selling price determines the taxable value of a property. In case of undeveloped land, the buyer is expected to report the value of the improvements as they occur. Those who have an annual homeowner’s permit may deem their primary residence to be owner occupied.

The rates of tax on real property are as follows:

• The first $250,000 of market value is tax exempt.
• On the value of owner or occupied properties between $250,000 and $500,000, the rate is 3/4 of one percent.
• On the portion over $500,000, the tax rate is 1% of the market value of the property.
• More than $5,000,000 of market value is .25%

For unimproved Bahamas property other than that exempt under the provisions of Section 39 of the Real Property Tax Act:

• Upon that part of the market value that does not exceed $7,000 a fee of $100.00
• Upon that part of the market value which exceeds $7,000, a tax rate of 1.5% per annum of the market value of the Bahamas property.

For commercial property:

• Upon that part of the market value that does not exceed $500,000 a tax at the rate of 1% per annum of the market value;
• Upon that part of the market value in excess of $500,000 a tax at the rate of 2% of the market value of the Bahamas property.

The market value of a property is the amount the property will receive if it is sold in the open market where there are no restrictions. If the owner does not file the return, he is guilty of an offence and may have to pay a fine upon conviction. False statements are also liable to fines, imprisonment, or both. A surcharge is added in case the tax is not remitted on or before the due date.

Establishing residency in the Bahamas

The Bahamian government has laid down certain guidelines that permit non-Bahamians to establish residency. Permanent residency is of two types; permanent residency with the right to work, and permanent residency without the right to work. One of the stipulations for establishing permanent residency is the investment of at least $500,000 in the Bahamas. This investment can be the purchase of real property with a minimum value of $500,000. Expats who own property in the Bahamas can submit an application to the Director of Immigration for a homeowner’s residence card, which can be renewed yearly and makes the owner, spouse and minor children endorsed on the card eligible to enter and live in the Bahamas for the duration of the validity of the card. The card is a way to gain entry into the Bahamas with the least amount of formalities.

Apart from enjoying a relaxed lifestyle in a pleasant environment, the Bahamas also offers the benefit of tax advantages to citizens of countries where there are high personal and corporate income taxes and also inheritance taxes. The tax benefits differ based on the applicant’s citizenship and the tax regulations in the applicant’s home country.

Bahamian citizenship

It is possible to obtain citizenship of the Bahamas, but it tends to be a long-winded process. Long-term permanent residents and spouses of Bahamians will find it easier to establish citizenship.

Finance for buying property in the Bahamas

Finance is easily available for buying property on the islands. Most major banks and life insurance companies provide mortgages for Bahamians and permanent residents. Some of them offer terms right up to 25 years with only a 10 percent down payment.

Major banks and lending institutions grant mortgages to foreign nationals, but the interest rates, restrictions and down payments may differ from one institution to another.

Bahamian architecture
The traditional architecture in the Bahamas is colonial with island accents. Residential properties usually feature dormer windows with characteristic high-pitched wood shingle roofs. The upper levels traditionally have wooden covered verandahs and French doors, with double hung windows and louvered shutters. Commercial properties tend to have a grand entrance with columns in the colonial style, with dormer windows. Many modern makeovers have taken away the covered verandahs and double hung windows. Today, buildings feature a more efficient use of space.

Areas of the Bahamas that are popular among expats are the gated residential communities on New Providence and Paradise Island. The top residential communities include Harbour Island, Eleuthera; Hope Town, Abaco; and George Town, Exuma and The Exuma chain of islands.

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