"Buying Real Estate in the Bahamas Is A Simple Process it can be timely but it's so worth it!"
Finding That Special Piece of Property:
This is where a real estate agent becomes very important. Why Have An Agent? Peace of mind, reassurance, decreased frustration and savings in time and money are just a few advantages of working with a competent and trustworthy real estate professional. Knowledge, experience, (at least three years full time), integrity and a good sound reputation are credentials to look for when selecting an agent. Good rapport and communicate are essential. After all, the realtor must understand your wants and needs in order to advise you in making the right future investements.
The Buying Process:
Once you have chosen your property to purchase, a sales agreement needs to be signed and a ten percent deposit of the purchase price (this is the norm) will be required and held in escrow in order to take the property off of the market. Once both buyer and seller sign the agreement specifying the terms of the transaction it becomes a binding contract. It is necessary to hire a Bahamian attorney who will complete the title search, conveyance (exchange of ownership), handle the exchange and disbursements of all monies as well as oversee the signing and registration of all documents. The Closing and conveyance will occur after good title has been shown and the balance of the purchase has been paid. All closing costs, including legal fees, government stamp tax, real estate commissions, vat tax and recording fees are then disbursed.
Real Estate Commission Fees:
- Unimproved property = 10% of the gross sales price
- Improved property = 6% of the gross sales price
- Commercial property, building or business = 10 % of the gross sales price
- Seller is responsible for real estate commissions and 7.5% Vat Tax if applied.
- Buyer and seller typically share the stamp tax and are responsible for their individual attorney's fees. These are established by the Bahamas Bar Association, and typically amount to maximum 2.5% of the gross sale price of the property plus 7.5% Vat Tax. There is also a small recording fee when the title deeds are recorded at the Public Registry. If you do not have a Bahamian lawyer your realtor can provide you with recommendations and references.
Stamp Duties & Taxes:
Bahamas Government Stamp Tax on Property Conveyances are as follows:
- Up to and including $0 - $20,000 = 2.5% with no Vat Tax
- Over $100,00.00 is 2.5% plus a 7.5% Vat Tax= 10%
Buyer and seller split the Government stamp tax. 50/50
Exemption from Government Stamp Duty tax is for “the first and only home” of a purchaser and where the overall value of the transaction is $500,000.00 or less. The purchaser’s 50% of the overall stamp duty will be exempted. (If they reside in the dwelling-house for a minimum period of 6 months per year.)
Registration of Property and Permits:
Under the International Persons Landholding Act, permits are required for land purchases made by non-Bahamians only if the property being bought is larger than five contiguous acres or if the buyer intends to rent out all or a part of the real estate or to develop for commercial purposes.
Non-Bahamians must register their purchase of any type of property with the Secretary to the Foreign Investments Board. The fee to apply to register a property or to apply for a permit is $25.00. Once the certificate of registration or permit is issued the additional fees due depend on the value of the property.
$50,000.00 or less = $50.00
More than $50,000.00 and under $101,000.00 = $75.00
More than $101,000.00 = $100.00
The market value is defined by the last sale price of the property.
Real Property Tax:
All real estate owners must pay this once a year which is due on or before December 1st of each year.
For owner occupied property (must reside therein 6 months or more to qualify) the first $250,000.00 is tax exempt. A five year exemption is available from the date of occupancy certificate for a first time owner/mortgagor but only for homes valued more than $250,000.00 but less than $500,000.00 which are used exclusively as a dwelling house (not a part of which is rented out.)
Unimproved property is tax exempt if owned by a Bahamian.
Property owned by a Bahamian in the family islands is also tax exempt.
Fees & Regulations:
Vacant land owned by Non-Bahamians is as follows of the full market value:-
- First $3,000.00 = $30.00
- The portion worth more than $3,000.00 and up to $100,000.00 = 1%
- On the portion worth more than $100,000.00 = 1.5%
- On the portion of value between $250,000 and up to $500,000= 0.75%
- On the portion of value between $500,000 and up to $5,000,000=1%
- On the portion of value In excess of $5,000,000 is now capped at $50,000.00
All other Properties including commercial is as follows: - (which most foreign 2nd home owners are now categorised as)
- First $500,000.00 = 1%
- Balance = 2%
There are many options and as everyone has unique circumstances this is a topic for discussion with your agent.
For more information about investing in The Bahamas and local real estate transactions please visit the following useful web sites: