Buyers Resource
What to expect when purchasing property in The Bahamas
At Berkshire Hathaway HomeServices Bahamas Real Estate, our commitment is to steer you in the optimal direction. As a comprehensive brokerage, we cater to all your needs, whether you're interested in acquiring a residential property, commercial space, vacant land, private island, resort, or condominium. Below, we outline the associated costs of purchasing a property in The Bahamas.
Developed Property is 6% while undeveloped land is 10%. Note: All commission rates are also subject to VAT. See Value Added Tax section
The following table outlines the VAT rates for Bahamians. The VAT rate on real estate transactions for foreigners is a flat rate tax of 10%.
- 2.5% Value Added Tax (VAT) applicable on all property transactions valued at $100,000 or less.
- 4% Value Added Tax (VAT) applicable on all property transactions valued at more than $100,000 but less than $300,000.
- 6% Value Added Tax (VAT) applicable on all property transactions valued at more than $300,000 but less than $500,000.
- 8% Value Added Tax (VAT) applicable on all property transactions valued at more than $500,000 but less than $700,000.
- 9% Value Added Tax (VAT) applicable on all property transactions valued at more than $700,000 but less than $1,000,000.
- 10% Value Added Tax (VAT) applicable on all property transactions valued at more than $1,000,000.
Legal Fees
In The Bahamas, every real estate transaction necessitates involvement from a local attorney. Typically, the legal fees amount to 2.5% of the final negotiated sales price, although this percentage is open to negotiation. The timeline for such transactions generally spans from three to six months, potentially being shorter based on specific circumstances. It is essential for both the buyer and seller to engage the services of a Bahamian attorney to ensure proper legal representation.
First-Time Home Buyers Who Are Bahamian Citizens
A 4% Value Added Tax (VAT) applicable on all property transactions valued more than $300,000 but less than $500,000. The stamp duty is generally split equally between the purchaser and the vendor. This is typical but is subject to change during negotiations if the buyer and seller agree to a different deal structure.
First-time Bahamian homebuyers are eligible for a reduced VAT rate when it comes to stamping their conveyances for property purchases under $500,000.
Can a foreigner own property in The Bahamas? Yes!
Foreign nationals have the option to establish full-time residency by making a minimum purchase of $250,000. This purchase allows them to apply for annual residency status. Alternatively, if an individual owns a property valued at $750,000 or more, they become eligible to apply for Economic Permanent Residency. For those who invest over $1.5 million, expedited consideration of their application is provided.
If you are an international investor who already possesses a property in The Bahamas and aims to broaden your real estate holdings, these acquisitions must receive authorization from The Bahamas Investment Authority, an organization overseen by the Ministry of Finance. Your Bahamian attorney can assist you in navigating this application process.
Bahamas Real Estate Commissions
Real estate sales and rental commissions are typically paid by the vendor or landlord. This is typical but is subject to change during negotiations if the buyer and seller agree to a different deal structure.
The commission rate for developed property is %6 and undeveloped land is 10% of the negotiated sales price. All commission rates are also subject to VAT. Please see Value Added Tax section for breakdown.
Real Property Tax
What are the Real Property Tax rates in The Bahamas?
Paying Real Property Tax is a legal obligation in The Bahamas. The payment must be settled promptly upon receipt of the bill, adhering to the guidelines outlined in the Real Property Tax Act to prevent incurring interest charges. The Department of Inland Revenue conducts property assessments to ascertain the property's value and its corresponding property taxes.
Properties enlisted on the National Register of Historical Buildings are entitled to exemption from real property tax. However, these exemptions are not granted automatically and necessitate an application, even if the property is already included in the Historical Buildings List.
Owner-occupied property
$0 - $300,000 = Exempt
$300,001 - $500,000 = 0.625%
Over $500,000 = 1%
Properties valued over $6,000,000 are capped at $120,000 a year
Commercial properties and investment properties not owner-occupied
$0 - $500,000 = 0.75%
$500,001 - $2,000,000 = 1%
Over $2,000,000 = 1.5%
Exemptions of Real Property Tax
Bahamian citizens are not taxed on unimproved property in The Bahamas.
Bahamas property owned by Bahamians and situated in the Family Islands is exempt from Real Property Tax (RPT). Property approved as commercial farmland by the Ministers of Agriculture is also eligible for Real Property Tax Exemptions. Also exempt from Real Property Tax:
Unimproved Bahamas property owned by Bahamians (in New Providence or the Family Islands), 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;
Bahamas property used exclusively for charitable or public service from which no profit is derived.
All property located in Freeport, Grand Bahama.
A 10 % Value Added Tax (VAT) is charged on all good and services. This includes legal work, real estate commissions or appraisals.
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