Buyers Guide

Buying real estate is one of the most significant decisions one makes in a lifetime. We realize the importance of being well informed prior to making any commitments. The following information is provided for your understanding of investing in The Bahamas. We are always willing to assist you, and when you are ready feel free to contact us. We take pride in our non-aggressive approach to sales and invite you to experience the difference.

Residency

Permanent Residency

International persons are encouraged to acquire residential properties in The Bahamas. The International Persons Landholding Act, 1993 was designed to reduce the bureaucracy associated with acquisition of real estate by non-Bahamians. Prior Government approval is not required for non-Bahamians to purchase an owner occupied property or to purchase vacant property of less than two acres for the construction of a residence. Such acquisitions are, however, required to be registered with the Investments Board and the Central Bank. The Bahamas has an active second home market making the assets of The Bahamas more easily accessible to those who enjoy living and/or doing business in paradise. Major international investors and owners of residences valued at $1.5 million or more are accorded accelerated consideration of applications for permanent residence.

The Bahamas Immigration Policy admits the grant of residency permits to non-Bahamian investors and homeowners. A homeowner’s card is available to all non-Bahamian owners of residences. The card facilitates immigration formalities at all Bahamian ports of entry and entitles the homeowner, his/her spouse and minor children to enter and remain in The Bahamas for the duration of the validity of the card.

Persons with this status prior to the Immigration Act (1975) continue to hold the status automatically. Spouses of Bahamians can receive a Certificate of Permanent Residence with the right to engage in gainful employment at any time for females and after five years of marriage for males. Spousal permits may be obtained in the meantime at a cost of $250. Permanent residency can be revoked for cause including divorce. Cost of Permanent Residence is $10,000 before issuance, with endorsements free.

Annual Residency

A head of household pays $1,000 plus $25 per dependent. Applicants for annual residency status must show evidence of financial support.

Male spouses of Bahamians pay a one time fee of $250 with no charges for dependents, and with proper documentation, may work here on a spousal permit.

Registration

The International Persons Landholding Act 1993 encourages foreigners or companies owned by them to purchase a second home in The Bahamas as this area was thought to have the most significant potential. If a foreigner acquires a single-family dwelling or vacant land to be used in the construction of such a dwelling then he no longer need obtain a permit from the Government (specifically the Investments Board) prior to the purchase. Permanent residents of The Bahamas and foreigners who inherit real estate in the Bahamas are not required to obtain a permit before acquiring land but they must register subsequently.

Permanent residents of The Bahamas and foreigners who inherit property in the Bahamas are not required to obtain a permit before acquiring land but they must register subsequently.

Permit

The foreigner will require a permit however if (1) the property is undeveloped land and of five acres in size or larger, or (2) the property is not a private residence, or it is not intended for development as such.

A registration certificate or permit must be included along with
title documents to be recorded in the Registrar General's Office
otherwise the recording will be null and void.

Mortgages

The new act provides that licensed banks, trust and insurance companies who acquire an interest in or take possession of real estate under a Court Order must register that acquisition or fact of possession. Acquisition by way of foreclosure under a mortgage or of land acquired by an authorized foreign state will not require a permit but must be registered.

Leases

Foreigners are not required to obtain permits, register leases or letting agreements unless they are for trade or business purposes and the term can exceed 21 years.

Incentives

In line with its policy of actively encouraging foreign investment, the government has included in this Act a provision that a foreigner no longer pays a double rate of stamp duty. He now pays the same single rate as a Bahamian. Furthermore, a foreigner who owns a home in the Bahamas may now obtain an annual homeowner resident card upon application and payment of a fee to the Director of Immigration. The Card authorizes the entry of the holder and his immediate family. Their stay in the Bahamas is authorized provided there are no restrictions for policy reasons or under the Immigration Act.

Schedule of Fees

• Application for registration - $25.00
• Application for permit - $25.00

Certificate of registration:

• the value of the property is $50,000 or less - $50.00
• the value of the property is over $50,000 but under $101,000 - $75.00
• the value of the property is $101,000 and over - $100.00
• Home owner resident card - $500.00

Stamp Duties & Taxes

The Government Stamp Tax on Property Conveyances A graduated tax is payable on the conveyance of all real property in The Bahamas based on the value as follows:

• Up to and including $20,000 - 4%
• From $20,000.01 to $50,000 - 6%
• From $50,000.01 to $100,000 - 8%
• From $100,000.01 and over - 10%

The usual practice in the Bahamas is for the tax to be shared equally between buyer and seller unless otherwise agreed upon.

Real Property Tax Rates - 2009

In respect of owner-occupied property: The first $250,000 is tax exempt.

• On that portion in excess of $250,000 and less than $500,000 the rate of tax is 0.75% of the market value of the property;
• On the portion in excess of $500,000and less than $5,000,000 the tax rate is 1% of the market value of the property.
• On the portionin excess of $5,000,000 the tax rate is 0.75% of the market value of the property.

In respect of unimproved property other than unimproved property exempt by virtue of Section 39 of the Real Property Tax Act:

• Upon that part of the market value that does not exceed $3,000 a fee of $30.00
• Upon that part of the market value which exceeds $3,000 but does not exceed $100,000 a tax rate of 1% per annum of the market value of the property.

In respect of any other 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 property.

Market Value is defined as the amount the property would realize, if sold in the open market, without any encumbrances or restrictions. If the return is not filed, the owner is guilty of an offense, and upon conviction thereof, may be fined up to $3,000. Persons knowingly making false statements may be liable upon conviction to a fine of up to $3,000 or six months imprisonment, or both fine and imprisonment. If the tax is not paid on or before the last day the tax becomes due, a 10% surcharge is added.

In the case of an extension of time, the Chief Valuation Officer may postpone the date on which the tax is payable in a particular case, by notice in writing.

Exemptions

Real Estate owned by Bahamians and situated in the Family Islands is exempt from property tax. Real Estate approved as commercial farm land (by the Ministers of Agriculture, Trade and Industry and Finance) is eligible for property tax exemptions.

Also exempt from property tax are:

• 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.