How to Buy a House in The Bahamas

With its incredible draw, you may be wondering, "Can anyone buy a house in The Bahamas?"  The simple answer is Yes! 

Anyone can buy a house in The Bahamas as you can acquire residential properties in The Bahamas of up to five acres without prior Government approval. All is possible because of the International Persons Landholding Act 1993: An Act to repeal the Immovable Property (Acquisition by Foreign Persons) Act, Chapter 125 and to facilitate the holding of land by non-Bahamians and by companies under their control.

Buying Real Estate in The Bahamas by non-Bahamians

The International Persons Landholding Act 1993 (“the Act”) which repealed the former Immovable Property (Acquisition by Foreign Persons) Act governs the acquisition or holding of real estate in the Commonwealth of The Bahamas by non-Bahamians and permanent residents of The Bahamas. “NonBahamian” means a person who is not a citizen of The Bahamas; or a company incorporated in The Bahamas where any of its shares or other capital is beneficially owned by a person who is not a citizen or where it is controlled by such person or persons; or a company incorporated outside of The Bahamas or an international organization. The Act came into operation on the 1st day of January, 1994.

The Act provides that a non-Bahamian (other than a permanent resident or a non-Bahamian acquiring an interest in land under a devise or inheritance) who acquires a condominium or property for the use as a single dwelling does not require a permit but must register the acquisition with the Investments Board of The Bahamas (“the Board”) unless the non- Bahamian would be the holder of two or more contiguous acres of land. Upon receipt of the application fee the acquisition will be registered and a certificate issued to the applicant.

A permanent resident who acquires land must also have the acquisition registered with the Board.

A non-Bahamian who acquires land under a devise or by inheritance need only register the acquisition with the Board.

A non-Bahamian (other than a permanent resident or a non-Bahamian acquiring an interest in land under a devise or inheritance) who intends to acquire, whether freehold or leasehold, land for use other than a condominium, single dwelling or where it comprises two acres or more, must obtain a permit from the Board to make the acquisition. The Board may use its discretion in granting or refusing a permit.

There are standard application forms for the Certificate of Registration and the Permit. A fee of $250.00 must accompany the application for the Certificate of Registration. Upon the approval of the Permit a fee of $500.00 is payable for the issue of the same.

There are comparable provisions where a business lease exceeding twenty-one years is concerned.

The Certificate of Registration or Permit must be recorded in the Registrar General’s Department with the documents whereby the acquisition was made by the non-Bahamian. If the acquisition is recorded without the requisite Certificate of Registration or Permit that registration becomes null and void and without effect for all purposes of law.

The Act enables a non-Bahamian who owns and maintains a home in The Bahamas to obtain an annual home owner’s resident card upon application and payment of a fee to the Director of Immigration. The entry of the non-Bahamian and his immediate family into The Bahamas will be authorized unless their entry is otherwise barred under the Immigration laws. 

The Islands of The Bahamas

How much does it cost to buy a home in The Bahamas? Well there are three sets of expenses that you will have to consider in addition to your purchase price when you buy a home in The Bahamas, they are:

• Government Value Added Tax or VAT
• Attorney Legal fees
• Real estate commission

VAT (Value Added Tax) - Unlike standard VAT, which is charged and paid at a rate of 10% on the supply of goods and services, the VAT on real estate transactions (Deed of conveyance, assignment, or transfer of real property) is a graduated tax based on the value of the property. 

• 2.5% where the value does not exceed $100,000 
• 4% where the value exceeds $100,000 but does not exceed $300,000 
• 6% where the value exceeds $300,000 but does not exceed $500,000 
• 8% where the value exceeds $500,000 but does not exceed $700,000 
• 9% where the value exceeds $700,000 but does not exceed $1,000,000 
• 10% where the value exceeds $1,000,000. 

Bahamian Citizens purchasing a home for the first time enjoy a VAT a lower rate of VAT on the stamping of their conveyances for purchases under $500,000.

• $0 - $300,000 = 0% 
• $300,001 - $500,000 = 4% 

In addition, if you purchase vacant land and complete construction on your home within 18 months, you may be eligible for a partial VAT refund! 

Who pays for the VAT tax, the vendor or the buyer?

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

Legal Fees  – Although this can vary, legal fees average 2.5% of the purchase price.

Real Estate Commission – 6% on improved property, 10% on vacant land and businesses.

*The seller is typically responsible for paying the real estate commissions.  

What is the rate of Real Property Tax in The Bahamas?  

Owner-occupied property (owner resides and uses exclusively as a dwelling): 

• $0 - $300,000 =  Exempt 
• $300,000 - $500,000 = 0.625% 
• Over $500,000  = 1% 

The ceiling for Properties valued over $6,000,000 = $120,000 

 
Commercial Properties (more than 4 units that are not owner-occupied): 

• $0 - $500,000 = 0.75% 
• $500,001 - $2,000,000 = 1% 
• Over $2,000,000 = 1.5% 

*Bahamian citizens are not taxed on unimproved property in The Bahamas.