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Is
it possible for a non-Bahamian to purchase property in The Bahamas?
Yes. The International Persons Landholding Act, 1993, provides for the sale of
real property in The Bahamas to non-Bahamians. Click here
for a pdf download of this act.
Are there any special permits required
when purchasing property in The Bahamas?
Permits are required by
non-Bahamians, as provided under the International Persons Landholding Act, if:
1. The
property being purchased is greater than 5 acres.
2. The intention is to
rent out all or a portion of the property.
3. The property being purchased
is for commercial development. Non-Bahamians
who buy land for which a permit is not required must register their purchase with
the Foreign Investment Board under such Act.
How do I go about getting
a permit or registering my purchase with the Foreign Investments Board?
"Also see Investment
Regulations"
Non-Bahamians should also register their investment with the Exchange
Control at the Central Bank of The Bahamas insure that on resale they will be
able to remit the net proceeds of sale outside the Bahamas in the currency of
the original investment.
In what form is title to property given?
The vast majority of property is sold Freehold. There are a few
exceptions of leasehold properties. These properties are generally Crown Lands
(Government owned) properties that are leased for agricultural or development
purposes. The Government of The Bahamas does not generally sell its property.
Do I need to engage the services of a local attorney when purchasing property?
No, but the appointment of a local attorney is highly recommended.
Apart from insuring that the documents of title are properly prepared and are
in good order the local attorney, when representing the buyer, gives an Opinion
on the title to the property. This Opinion is considered to be the same as title
insurance as the lawyer is liable should the purchaser find that there is a defect
in the title. Local lawyers carry indemnity insurance.
Is title insurance
available in The Bahamas?
Yes. There are companies in the Bahamas
offering title insurance. The risk premium generally runs between .20% - .27%
of value.
What are the costs involved in buying or selling property?
A typical sale, which is called a "Gross Sale", assumes
that the vendor will be responsible for the payment of: 1.
The real estate agents commission (if an agent is involved). The commission on
the sale of residential developed property is 6% of the gross sales price. The
commission on the sale of undeveloped property is 10%.
2. The Government Stamp
Duty (Tax on the conveyance of real property). This is a graduated Tax. The total
amount of the Tax is calculated as follows:· - When
the value of the consideration is less than $20,000, the rate is 2%
- When
the value of the consideration is equal to or greater than $20,000 and is less
than $50,000, the rate is 4%
- When
the value of the consideration is equal to or greater than $50,000 and is less
than $100,000, the rate is 6%
- When
the value of the consideration is equal to or greater than $100,000 and is less
than $250,000, the rate is 8%
- When
the value of the consideration is equal to or greater than $250,000, the rate
is 10%
This
tax is split between the vendor and the purchaser. 3.
The vendor's legal fees. The legal fees on a sale or purchase are usually 2 1/2
% of the first $500,000, 2% of the next $500,000, 1% of the next $4,000,000 and
1/2% thereafter. The
Purchaser will be responsible for: 1.
1/2 of the Government Stamp Tax as set out above,
2. The purchaser's legal
fees as detailed above. This fee includes the lawyers Opinion on the title to
the property.
3. Recording fees ($3.50 per page) on the conveyance and other
closing documents which need to be recorded.
4. Payment of the permit under
the International Persons Landholding Act if applicable.
In the event that
the sale is a "Net Sale" the purchaser would be responsible for payment
of all of the above-mentioned fees. What
information is required from non Bahamians when purchasing property in The Bahamas?
We have provided a point by point breakdown of the steps necessary and information
required by non Bahamians when purchasing property in The Bahamas.
This information
was provided by attorney, Frederik F. Gottlieb, Frederik Gottlieb & Co., Marsh
Harbour, Abaco. E-mail: gottlieb@oii.net
Click "Residency
Requirements"
After I purchase a property will I be able to repatriate the proceeds
of sale whenever I sell it?
Yes. You will be able to repatriate
the entire proceeds including any profits provided you register the purchase with
the Exchange Control Department of the Central Bank at the time of purchase.
Do I need any special approvals in order to build on a property or to
make any changes to an existing structure?
Yes. You will need to
obtain approval from the Town Planning Board and a building permit issued by the
Ministry of Works. A local architect or engineer would be able to assist you with
this.
Are there good qualified architects, contractors and engineers
available in the islands?
Yes. Most if not all architects in the
Bahamas were schooled either in the United States, Canada or the United Kingdom
and have international accreditations. There is a local licensing Board for architects.
The construction industry is also regulated, but the qualifications for licensing
are not nearly as rigorous. The leading contractors are all civil engineers with
international accreditations or have certified engineers on staff. Many of the
smaller contractors are products of a good apprentice system and are very adept
and skilled at efficiently carrying out residential construction. Civil, mechanical
and electrical engineers in the Bahamas, like the architects were schooled in
other countries and hold international accreditations from those respective countries
and must also have a license issued by their respective local Boards.
May I use the services of a non-resident architect?
Yes, but
that architect cannot work in the Bahamas without a permit to do so. All building
plans submitted to the Town Planning Board and the Ministry of Works must be signed
off by a local licensed architect and local engineers. As in any jurisdiction
there are local customs and procedures required in getting the job done and it
is recommended that you utilize the services of the local professionals.
Are Brokers and sales agents in The Bahamas licensed?
Yes.
Brokers and sales agents are licensed by The Bahamas Real Estate Association (BREA).
Qualifications for licensing include sitting a written exam. BREA is an international
member of The National Association of Realtors (NAR) and many BREA members are
International Members of NAR and hold various accreditations offered by NAR including
GRI, CRS, CRB, CIPS and CCIM. A few members are also members of the International
Federation (FIABCI). The public is urged to ask and only use the services of a
BREA member.
What is the cost of construction?
Construction
costs in The Bahamas, as you might imagine, vary widely depending on the location
of the construction site, the design of the building, the materials used and the
finishes. Costs may be as low as $65.00 - $80.00 per square foot for low cost
housing, however, a modest or minimum structure consisting of concrete block construction,
timber roof framing and asphalt roof shingles will cost between $100.00 to $150.00.
An average home will cost from $150.00 to $200.00, but not with top of the line
finishes such as marble tile and granite or Corian countertops. A better than
average home with good finishes, will cost from $200.00 to $400.00. For a luxury
home the cost would be more on the order of $400.00+ per square foot for the finest
finishes and details. On average you can count on the cost being approximately
40% higher than a similar home in south Florida. This is mainly due to freight,
duty and delivery cost to site representing approximately 65% of the F.O.B. material
cost. It should also be pointed out that building standards are higher in the
Bahamas than in South Florida. The majority of homes in the Bahamas are of concrete
block or poured concrete construction and are built to meet a very strict building
code.
Is there local financing available to non-Bahamians and/or permanent
residents?
Yes, but the loan facility may only be given in US$'s
at international rates and the down payment required is generally on the order
of 40% of value.
What taxes do you have in The Bahamas?
First and foremost we have no income tax, capital gains taxes or inheritance taxes.
There is no sales tax with the exception of the Stamp Duty paid on the conveyance
of real property.
The Bahamas Governments main source of revenue is
from customs duties on all goods imported into The Bahamas. This tax may be as
low as 7 % as in the case of raw lumber, computer software and as high as 75%
in the case of luxury automobiles, 160% on raw tobacco and 210% on cigarettes.
There is an additional 7% stamp duty payable on these goods. The typical rate
of duty is around 35%.
There is also property tax. The rates are as
follows:
On owner occupied properties:
First $100,000 - nil
Next $400,000 - 1%
Excess over $500,000 - 1.5%
The rates of
tax on other properties is:
First $100,000 - 1%
Next $400,000 -
1%
Excess over $500,000 - 2%
Is it possible to establish residency
in the Bahamas and if so how does one go about it?
Yes. The Government
of the Bahamas has set specific guidelines that allow non-Bahamians to establish
permanent residency in The Bahamas. There are two categories of permanent residency:
Permanent residency with the right to work and permanent residency with out the
right to work. One of the criteria for permanent residency is the investment of
a minimum of $500,000 in The Bahamas. This investment may take the form of the
purchase of real property with a minimum value of $500,000. Non-Bahamians who
own property in The Bahamas may apply to the Director of Immigration for an annual
homeowner's residence card. This card is renewable annually and entitles the owner,
spouse and any minor child/children endorsed on the card to enter and remain in
The Bahamas for the validity of the card. It is intended to facilitate entry into
The Bahamas with minimal formalities. For complete details regarding permanent
residency, homeowners permits and citizenship:
See also "Residency
Requirements"
What are the advantages to establishing permanent residency in The
Bahamas?
Apart from the opportunity to live and work in a warm and
pleasant environment there are also significant tax advantages for citizens of
countries with high personal and corporate income taxes as well as inheritance
taxes. The advantages vary depending on the citizenship of the applicant and the
tax laws of the applicant's home country.
Is it possible to obtain
Bahamian citizenship?
Yes it is possible, but it is a long and involved
process. Typically favour is given to long-term permanent residents and spouses
of Bahamians.
See also "Residency
Requirements"
Is it possible to live and work in The Bahamas?
Yes.
But you must appreciate that The Bahamas has a small young population. The total
population of the Bahamas is less than 300,000 with a total land area of 10,000
square miles spread over 700 islands. The policy of the Bahamas Government is
to protect the well being and provide maximum employment opportunities for Bahamians.
In a nutshell in order to obtain a work permit to work in The Bahamas an employer
must demonstrate that there is not a Bahamian ready willing and able to fill the
position. Quite obviously the Bahamas would be overrun overnight if these safe
guards were not in place.
See also "Residency
Requirements"
This material
is based upon information that we consider to be reliable, but we cannot represent
that it is accurate and complete, and it should not be relied upon as such. When
buying, selling or listing property for sale in The Bahamas one should first consult
with the relevant local authorities or request an attorney to do so on your behalf.
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