Bahamas Real Estate Taxes (2026) — Complete Buyer's Guide
Verified 2026 Tax Rates

Bahamas Real Estate Taxes Complete Guide

Every tax on Bahamas property — annual property tax, VAT on conveyance, closing costs, rental tax implications, and what foreign buyers actually pay. All rates verified against official sources.

0% Income TaxOn Rental Income
0% Capital GainsOn Property Sales
0% InheritanceOn Property Transfer
8-11%Buyer Closing Costs
Glenn Ferguson
Glenn Ferguson — Licensed Bahamas Real Estate Agent, BREA, Bahamas MLS Member & Residency Consultant · 24+ years
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BREA Licensed Agent— Glenn Ferguson Bahamas MLS

The Bahamas — zero income tax, zero capital gains, zero inheritance tax

Taxes The Bahamas Does Not Charge

Before covering the taxes that do apply, it is important to understand the taxes The Bahamas does not charge — because these are the primary reason international investors choose this jurisdiction.

Zero income tax — no tax on rental income, wages, dividends, or interest earned in The Bahamas. Rental income from your property is not taxed locally.
Zero capital gains tax — sell your property at any profit margin and owe nothing to the Bahamas government on the gain.
Zero inheritance / estate tax — property passes to heirs without any local transfer tax on death. No wealth tax.
Home-country obligations remain: While The Bahamas imposes none of these taxes, U.S. citizens must report worldwide income to the IRS (including rental income and capital gains). Canadian and UK citizens have similar reporting requirements. The Bahamas has no tax treaty with the U.S. Consult your home-country tax advisor.

Annual Real Property Tax — 2026 Rates

The Bahamas levies annual property tax on all developed real property. Rates differ significantly based on whether you live in the property (owner-occupied) or use it for rental, investment, or commercial purposes (non-owner-occupied). Only one property per person or married couple can qualify as owner-occupied.

Owner-Occupied Residential Rates

Assessed ValueTax RateAnnual Tax
First $300,000Exempt$0
$300,001 – $500,0000.625%Up to $1,250
Above $500,0001%Varies
Annual cap$150,000

Non-Owner-Occupied Rates (Rental / Investment / Commercial)

Assessed ValueTax RateAnnual Tax
First $500,0001%Up to $5,000
Above $500,0002%Varies
Annual capNo cap

What You Actually Pay — Calculated Examples

Property ValueOwner-OccupiedNon-Owner / RentalDifference
$300,000$0/yr$3,000/yr$3,000
$500,000$1,250/yr$5,000/yr$3,750
$750,000$3,750/yr$10,000/yr$6,250
$1,000,000$6,250/yr$15,000/yr$8,750
$2,000,000$16,250/yr$35,000/yr$18,750
$3,000,000$26,250/yr$55,000/yr$28,750
$5,000,000$46,250/yr$95,000/yr$48,750

Rates per the Real Property Tax Act as amended 2023. Property taxes are billed in Q4 for the following year. 10% discount if paid in full by March 31. 5% surcharge per annum on late payments. Outstanding tax creates a first charge on the property. Source: Department of Inland Revenue. Use the interactive Property Tax Calculator.

Foreign-Owned Vacant Land

Non-Bahamians pay property tax on vacant land: first $7,000 at a $100 flat fee, above $7,000 at 2% of the remaining value. Bahamian citizens pay no property tax on vacant land.

How to qualify for owner-occupied rates: Submit an owner-occupied affirmation form to the Department of Inland Revenue with utility bills and residency proof. You must occupy the property exclusively as your dwelling on a permanent or seasonal basis. Companies can qualify if the beneficial owner of more than 50% of shares occupies the property and submits the required declaration.

VAT on Property Conveyance — Transfer Tax

When you buy or sell property in The Bahamas, a Value Added Tax (VAT) applies to the transaction. This replaced the previous stamp duty system. The rate depends on whether you are a Bahamian citizen or a foreign buyer.

Foreign Buyers (Non-Bahamian Citizens)

Flat 10% VAT on all property purchases regardless of value, effective July 1, 2023. Companies and IBCs also pay the flat 10% rate. This is customarily split 50/50 between buyer and seller, so the buyer typically pays 5% and the seller pays 5%. The split is negotiable.

Bahamian Citizens — Graduated Rates

Property ValueVAT Rate
Up to $100,0002.5%
$100,001 – $300,0004%
$300,001 – $500,0006%
$500,001 – $700,0008%
$700,001 – $1,000,0009%
Over $1,000,00010%

First-time Bahamian buyers get a special 4% rate on properties $300,000–$500,000. Source: VAT (Amendment) Act 2022, effective July 2023.

VAT on Professional Services — 10%

A 10% VAT applies to all professional real estate services: legal fees, real estate commissions, property appraisals, surveys, architectural services, and property management fees. This is in addition to the base fee. For example, legal fees of 2.5% become 2.75% after VAT. Note: VAT is not charged on property tax payments, mortgage principal and interest, or property insurance premiums.

Complete Closing Costs for Foreign Buyers

Cost ItemRateOn $500KOn $1MOn $2MOn $5M
VAT on conveyance (buyer's 50%)5%$25,000$50,000$100,000$250,000
Legal fees2.5–3.5% + 10% VAT$13,750–$19,250$27,500–$38,500$55,000–$77,000$137,500–$192,500
Title insurance0.5–1%$2,500–$5,000$5,000–$10,000$10,000–$20,000$25,000–$50,000
BIA registrationNominal~$250~$250~$250~$250
Total buyer-side8–11%$41,500–$49,500$82,750–$98,750$165,250–$197,250$412,750–$492,750

Assumes 50/50 VAT split. The split is negotiable — Glenn has secured more favourable splits for buyers in competitive situations. Use the interactive Closing Cost Calculator.

Glenn Ferguson
Glenn's note on closing costs: The 50/50 VAT split is customary but not legally required. In a buyer's market or when the seller is motivated, I negotiate a more favourable split for my clients — sometimes 60/40 or 70/30 in the buyer's favour. This can save $10,000–$50,000+ on a luxury purchase. I provide a complete closing cost projection for every property before you make an offer.

Total Annual Cost of Ownership

Annual Cost$500K Condo (Owner)$1M Condo (Owner)$1M (Non-Owner)$2M Home (Owner)
Property tax$1,250$6,250$15,000$16,250
Insurance$5,000–$10,000$10,000–$20,000$10,000–$20,000$20,000–$40,000
HOA / maintenance$6,000–$12,000$10,000–$20,000$10,000–$20,000$15,000–$30,000
Utilities$4,800–$7,200$6,000–$10,000$6,000–$10,000$8,000–$15,000
Total annual$17,050–$30,450$32,250–$56,250$41,000–$65,000$59,250–$101,250

Tax Implications of Renting Your Property

If you rent your property — even occasionally — several tax changes apply.

Property tax reclassification: Your property moves from owner-occupied to non-owner-occupied rates. On a $1M property, this increases your annual tax from $6,250 to $15,000 — a difference of $8,750 per year.

Business license: You need a Bahamas business license to operate a rental ($250–$1,250 per year depending on turnover).

No local income tax on rental: Rental income is not taxed in The Bahamas. This is a significant advantage compared to most other jurisdictions.

Home-country tax: U.S., Canadian, and UK citizens must report worldwide income including Bahamas rental income. No foreign tax credit is typically available because no Bahamas income tax was paid.

Hotel rental programs: As of January 2023, condos registered in a government-approved hotel rental program are subject to non-owner-occupied property tax rates even if the owner occasionally occupies the unit.

Get a Tax Estimate for a Specific Property

Glenn provides complete closing cost projections and annual tax estimates for any property you're considering — before you make an offer.

Call +1-242-395-8495 WhatsApp for Tax Estimate Use Closing Cost Calculator

Taxes When Selling Bahamas Property

Seller CostRateOn $1M SaleOn $3M Sale
Capital gains tax0%$0$0
VAT on conveyance (seller's 50%)5%$50,000$150,000
Real estate commission6% + 10% VAT$66,000$198,000
Legal fees2.5–3.5% + 10% VAT$27,500–$38,500$82,500–$115,500
Total seller-side~14–16%$143,500–$154,500$430,500–$463,500

All outstanding property tax must be current before sale can close. Commission is 6% for improved property, 10% for vacant land (both + 10% VAT). BIA will not issue permits if property tax is unpaid.

Bahamas vs Other Jurisdictions — Tax Comparison

Tax TypeBahamasCayman IslandsTurks & CaicosFlorida (US)
Income tax0%0%0%0% state / federal applies
Capital gains0%0%0%0% state / federal applies
Inheritance/estate0%0%0%0% state / federal applies
Purchase transfer tax10% VAT (split 50/50)7.5–10% stamp duty6.5–10% stamp duty~0.7% (doc stamps)
Annual property tax0.625–2%NoneNone~1.02% avg (no cap)
Property tax cap$150K/yr (owner-occ)N/AN/ANo cap

View the full 5-jurisdiction tax comparison.

Property Ownership and Tax Residency

PathHORCStandard EPRAccelerated EPR
Min. investmentAny value$1,000,000 USD$1,500,000+ USD
ProcessingStandardMonths~3 weeks
Annual fee$500 + $25/dep$20,000 app + $300$20,000 app + $300
Hold periodMust own10 years10 years
PresenceNo minimum90 days/yr90 days/yr

EPR threshold increased to $1M on Jan 1, 2025 (from $750K). Property ownership alone does not establish tax residency — but combined with the 0% income tax environment, it can provide significant planning benefits. Full Residency Guide.

Why Work with Glenn on Bahamas Tax Questions

Glenn Ferguson is a BREA-Licensed Bahamas Real Estate Agent, Bahamas MLS member, and Residency Consultant with 24+ years. He provides closing cost projections and annual tax estimates for every property, coordinates with Bahamas attorneys on conveyance, and manages residency applications. Glenn is not a tax advisor — he connects you with qualified professionals for tax-specific questions while ensuring you understand the complete cost picture before committing.

BREA Licensed— Glenn Ferguson Bahamas MLS
Glenn Ferguson
Glenn Ferguson — Expert Quote: In 24 years of helping foreign buyers, the tax question I hear most is "what do I actually pay?" The answer surprises most people: The Bahamas charges zero income tax, zero capital gains, and zero inheritance tax — but the costs that do apply are front-loaded. You pay 8-11% at closing (mostly VAT on conveyance), then $32,000-$56,000 per year on a $1M condo in property tax, insurance, HOA, and utilities. The biggest trap I see is buyers who rent their property without realising it reclassifies their tax rate from owner-occupied to non-owner — nearly tripling the property tax line on a $1M property. I flag this in every cost projection because knowing the real numbers is the difference between a confident purchase and a nasty surprise.

Glenn Ferguson — BREA Licensed Real Estate Agent #1247 / Bahamas MLS Member / Residency Consultant / 24+ Years All Islands

Get Your Bahamas Tax Estimate

Tell Glenn the property you're considering. He'll provide closing costs, annual property tax, and a complete cost-of-ownership projection.

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Frequently Asked Questions — Bahamas Real Estate Taxes

What taxes do you pay on real estate in The Bahamas?

Three main taxes: VAT on conveyance (10% for foreign buyers, split 50/50), annual property tax (owner-occ: 0.625–1%, non-owner: 1–2%), and VAT on professional services (10%). No income tax, no capital gains, no inheritance tax.

What is the annual property tax rate?

Owner-occupied: first $300K exempt, 0.625% to $500K, 1% above ($150K cap). Non-owner: 1% first $500K, 2% above (no cap). $1M owner-occ = ~$6,250/yr. $1M non-owner = ~$15,000/yr. Property Tax Calculator.

How much VAT do foreign buyers pay?

Flat 10% on all purchases (effective July 2023). Split 50/50 customarily — buyer pays 5%, seller pays 5%. Split is negotiable. Companies/IBCs also pay flat 10%.

What are total closing costs for foreign buyers?

8–11% of purchase price: VAT 5% (buyer share), legal 2.5–3.5% + VAT, title 0.5–1%. On $1M = ~$83K–$99K. Closing Cost Calculator.

Is rental income taxed?

Not in The Bahamas. But your property reclassifies to non-owner-occupied tax rate, business license required ($250–$1,250/yr), and home-country tax obligations apply (US, Canada, UK).

Is there capital gains tax?

No Bahamas capital gains tax. Seller pays their 50% VAT share (5%) plus commission (6% + VAT) and legal fees. Home-country capital gains reporting applies.

Is there inheritance tax?

No Bahamas inheritance or estate tax. Property passes to heirs without local transfer tax. US citizens subject to federal estate tax (2026 exemption $13.99M). UK citizens may face IHT.

How do I qualify for owner-occupied rates?

Submit affirmation form to DIR with utility bills and residency proof. Occupy exclusively as dwelling (permanent or seasonal). One property per person/couple. Companies can qualify if 50%+ beneficial owner occupies.

What is VAT on professional services?

10% on legal fees, commissions, appraisals, surveys, architectural services, property management. Legal at 2.5% becomes 2.75% effective. Not charged on property tax, mortgage payments, or insurance.

Are there any tax exemptions?

Owner-occupied: first $300K exempt. Bahamians: no tax on vacant land. First-time Bahamian buyers: 4% VAT ($300K–$500K). Historical buildings: eligible for exemption. Pensioners (65+): 50% reduction up to $1M value.

How does Bahamas compare to Cayman or TCI?

Cayman: no property tax but 7.5–10% stamp duty (10% for CI$2M+, Jan 2026). TCI: no property tax but 6.5–10% stamp duty. Bahamas has annual property tax but 0% income/gains/inheritance. Full comparison.

What happens if I don't pay property tax?

5% surcharge per annum. Creates first charge on property (priority over mortgage). BIA won't issue permits, DIR won't stamp conveyances, building permits blocked. 10% discount if paid by March 31.

Do I pay tax when I sell my Bahamas property?

No capital gains tax. Seller pays 50% VAT share (5% of sale price), commission (6% + VAT for improved property), and legal fees (2.5–3.5% + VAT). Total seller costs ~14–16%. All property tax must be current before closing.

Can property help with tax residency?

Property ownership supports HORC ($500/yr, any value) and EPR ($1M+, Jan 2025). Combined with 0% income tax, provides planning benefits. Not automatic tax residency — consult advisor. Residency Guide.

Who can help me with Bahamas tax questions?

Call Glenn Ferguson at +1-242-395-8495 for closing cost and tax estimates. BREA Licensed Agent, 24+ years. Glenn coordinates with Bahamas attorneys and recommends home-country tax advisors for cross-border implications.

View Glenn's credentials →

Sources

  1. Department of Inland Revenue, Bahamas (inlandrevenue.finance.gov.bs) — RPT rates, FAQs, payment portal
  2. Real Property Tax Act, as amended 2023 — owner-occupied and non-owner tiers, $150K cap, vacant land rates
  3. VAT (Amendment) Act, 2022 — 10% flat rate for foreign buyers effective July 2023, graduated Bahamian rates
  4. Bahamas.gov.bs — Real Property Tax overview, exemptions
  5. Alexiou Knowles & Co. (bahamaslaw.com) — RPT legal overview, surcharges, first charge provisions, hotel rental program classification
  6. Bahamas Immigration Department — HORC and EPR requirements
  7. Fragomen Advisory, January 2025 — EPR threshold increase to $1M
  8. Bahamas Investment Authority (BIA) — foreign investment registration
  9. Central Bank of The Bahamas — Exchange Control registration, BSD:USD peg
  10. ERA Dupuch Real Estate — VAT structure, foreign buyer guide, closing costs
  11. PwC Tax Summaries (taxsummaries.pwc.com) — Bahamas individual other taxes
  12. Taxes for Expats (taxesforexpats.com) — 2026 Bahamas tax guide for US expats
  13. Graham Real Estate — property tax payment guide, rate breakdown
  14. Coldwell Banker Bahamas — buyer's guide, tax rates, residency thresholds

Know Your Costs Before You Commit

The Bahamas tax environment is genuinely advantageous — zero income, capital gains, and inheritance tax is rare in the Caribbean. But the costs that do apply (8–11% closing, 1–2% annual property tax, 1–3% insurance) add up significantly. The only way to make a sound decision is to see the complete picture for your specific property, at your specific price point, with your specific ownership structure. Glenn Ferguson provides that picture for every buyer — before you make an offer.

Get Your Complete Tax Projection

Tell Glenn the property and price. He'll give you closing costs, annual tax, insurance estimate, and total cost of ownership.

Call +1-242-395-8495 WhatsApp — Get Tax Projection Submit Enquiry
Disclaimer: This page is for informational purposes only and does not constitute legal, tax, or financial advice. Tax rates, government fees, and policies are subject to change. All rates verified against official sources as of March 2026. Consult a qualified Bahamas attorney and your home-country tax advisor. Glenn Ferguson is a licensed Bahamas Real Estate Agent (BREA) and Residency Consultant — not a lawyer, accountant, or tax advisor.

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