Frequently Asked Questions Concerning Buying and Selling in the Bahamas.
The International Persons Landholding Act, 1993, provides for non-Bahamians
to be able to purchase real property in the Bahamas.
According to the International Persons Landholding Act, 1993, permits
are required by non-Bahamians if:
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The property being purchased is 5 acres or more.
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The purchaser intends to rent out a portion or all of the property.
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The purchaser intends to use the property for a commercial development.
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In addition, under the above named act, a non-Bahamian who purchases
land that does not require the issuing of a permit must register their purchase
with the Foreign Investment Board.
Non-Bahamians should register their investment with the Exchange
Control Department at the Central Bank of the Bahamas so that in the event
that they choose to sell their property, they will be able to repatriate
the proceeds in the currency of their original investment.
Click on the link (http://www.opm.gov.bs/legislation.php) to view the following:
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The International Persons Landholding Act
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The International Persons Landholding Act Guidelines
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Application for Permit
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Application for Certificate of Registration
Most of the properties are sold on a Freehold basis; however, there
are some properties that are sold on a leasehold basis which are usually
Crown Lands (Government owned properties). Although the Government of
the Bahamas does not usually sell its property, it sometimes leases some
of its Crown Lands for agricultural / development purposes.
All Real Estate transactions must be handed by a Bahamian Lawyer, or
they will not be registered and the sale will not be considered final.
The Bahamian government charges a stamp tax on all real estate
sales or transfers. This tax is split between the buyer and the seller
unless otherwise specified or agreed to by both parties. The amount of
the tax varies according to the value and they are as follows:
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Up to and including $20,000 - 2%
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From $20,000.01 to $50,000 - 4%
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From $50,000.01 to $100,000 - 6%
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From $100,000.01 to $250,000 - 8%
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From $250,000.01 and over - 10%
The Bahamas Real Estate Association establishes Real Estate commissions
and they are as follows:
Lawyers' fees by the Bahamas Bar Association for handling the sale and
purchase of real estate and the scale fees are as follows:
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2 ½% of sale price
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There are the principle costs in buying
and selling real estate. There are other considerations and
expenses related such as the conversion
from Bahamian Dollars to U.S. Dollars and vice versa,
surveying fees if boundary markers are not in place or a survey
plan is needed.
Appraisal or valuation if required is charged by the extent
of the job.
If you registered the purchase of your property with the Exchange
Control Department at the Central Bank of the Bahamas at the time of purchase
and later decide to sell your land you will be able to repatriate the proceeds.
Real estate brokers and sales agents are required to be licensed
by the Bahamas Real Estate Association (B.R.E.A.) which is an international
member of The National Association of Realtors (N.A.R.).
Local financing is available however, the loan facility may only
be given in US$ at international rates and the down payment required is
usually in the area of 40% of the value.
The Bahamas has no income tax, capital gains tax, inheritance tax
or sales tax with the exception of the Stamp Duty on the conveyance
of real property.
The government's primary source of revenue is from duties charged
by customs on all imported goods into the Bahamas.
There is also Real Property Tax. The following are the Real Property
Tax Rates:
In respect of owner-occupied property:
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The first $250,000 is tax exempt.
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On that portion in excess of $250,000
and less than $500,000 the rate of tax is 0.75% (¾%) of the market
value of the property; On the portion in excess of $500,000 the tax rate
is 1% of the
market value of the property.
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The maximum annual tax shall not exceed $35,000.00.
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In respect of unimproved property other than unimproved property
exempt by virtue of Section 39 of the Real Property Tax Act:
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Upon that part of the market value that does not exceed $3,000
a fee of $30.00
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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:
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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;
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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.
Property owned by Bahamians and situated in the Family Islands
is exempt from property tax. Property 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:
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Unimproved property 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; Property owned by foreign
governments;
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Property owned by foreign nations used for consular
offices or residences of consular officials and employees;
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Property used exclusively for charitable or public
service from which no profit is derived.
As with many emerging nations, the policies of The Bahamas Government
are aimed at ensuring reasonable security, well-being and economic progress
of The Bahamas and its people. However, due to our status as an offshore
financial center which is utilized by persons from various parts of the
world, The Government does give consideration to application for citizenship,
permanent residency and work permits subject to applicable immigration
laws and governmental policies.
Persons seeking permanent residence must be of good character and
prepared to show evidence of financial support. Application is
made to the Ministry of Public Safety and Immigration and must
be accompanied by the necessary information. Accelerated consideration
may be given to fit and proper applicants for permanent residence
who demonstrate a genuine intention to reside in The Bahamas at
least part of the year and which applicants either already own
or intend to purchase a home in The Bahamas with a value in excess
of $500,000. Any successful applicant, where applicable, may have
his spouse and/or minor children endorsed on his permanent residence
certificate.
Non-Bahamians are at liberty to apply for work permits but they must be
able to demonstrate a special skill or expertise such that at the time of
application there are no suitable Bahamian persons capable of holding the
position for which the permit is being applied for. Certain categories of
Work Permit applicants may request a permit for longer periods than the
standard one-year period. Upon each renewal sought the criteria that was
applicable to a new applicant will be required to be met. Should Work Permit
applicants wish to be accompanied by their spouse and/or minor children,
separate Residency Permit applications must be made.
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