Bahamas Permanent Residency for Canadian Investors

Why Canadian Investors Are Choosing Bahamas Real Estate

Canadians are the second-largest group of foreign property buyers in The Bahamas, according to the Knight Frank 2025 Wealth Report. American buyers led the foreign market throughout 2024, followed by investors from Canada and the European Union. The same report noted that roughly half of wealthy expatriates in The Bahamas now hold permanent residency, up from about 20% before the pandemic.

The Bahamas Department of Immigration administers the Economic Permanent Residency (EPR) programme under the Immigration Act, granting lifetime residency to investors who purchase qualifying real estate valued at $1,000,000 or more. The Bahamas imposes no personal income tax, no corporate income tax, no capital gains tax, and no inheritance tax. For Canadian residents taxed on worldwide income by the CRA under the Income Tax Act (Canada) — currently reaching up to 53.53% at the top combined federal-provincial rate in Ontario — this zero-tax jurisdiction represents a significant planning opportunity.

Getting to The Bahamas from Canada

Canadian citizens can stay in The Bahamas for up to 8 months without a visa, as confirmed by the Bahamas Department of Immigration and Canada's Travel Advisory (travel.gc.ca). No tourist visa is required. You need only a valid Canadian passport. Canadian permanent residents (non-citizens holding a Permanent Resident Card) can stay for up to 30 days without a visa.

Passport requirements: Your Canadian passport must be valid for at least 3 months after your return date for direct travel to The Bahamas, or 6 months if transiting through the United States. Most airlines require 6-month validity regardless of routing.

Direct flights: Air Canada, WestJet, and seasonal charter operators fly nonstop from Toronto Pearson (YYZ), Montréal–Trudeau (YUL), Ottawa (YOW), Calgary (YYC), and Halifax (YHZ) to Nassau's Lynden Pindling International Airport (NAS). Toronto to Nassau: approximately 3 hours 20 minutes.

After EPR is granted: Once you receive Economic Permanent Residency, you enter and exit The Bahamas freely without any visa or length-of-stay restrictions. You carry your EPR certificate alongside your Canadian passport. This eliminates the 8-month limitation entirely.

Travelling with minors: If a child is travelling with only one parent, a notarised letter of consent from the other parent may be requested by Bahamas immigration officers.

The EPR Program — Complete Details for Canadian Applicants

Effective January 1, 2025, the minimum qualifying investment for Economic Permanent Residency (EPR) increased from $750,000 to $1,000,000, as confirmed by the Bahamas Immigration Department, Lennox Paton (March 2025), and the Legal 500 Bahamas Real Estate Guide (March 2025). EPR is a residency classification under the Immigration Act of The Bahamas granting the right to reside indefinitely. The qualifying property must be held for a minimum of 10 years. EPR holders must spend at least 90 days per year in The Bahamas (cumulative, not consecutive). Accelerated consideration is given to investments of $1,500,000 or more.

What qualifies: Residential real estate valued at $1,000,000 or more. The investment can be a single property or multiple properties totalling the threshold. Qualifying alternatives include Central Bank of The Bahamas zero-coupon bonds, though real estate is the preferred route for most Canadian investors.

Hold period: The property must be maintained for at least 10 years from the date of EPR approval. Selling before the 10-year mark can result in revocation of your residency status.

Presence requirement: EPR holders must spend a minimum of 90 days per year in The Bahamas. This is cumulative across the year and does not need to be consecutive.

Family inclusion: Spouse and dependent children under 18 can be endorsed on your EPR certificate at $300 per person. Children who turn 18 need to apply separately.

Work rights: The standard $20,000 EPR does not include the right to work or operate a business. However, the $25,000 EPR option grants the right to engage in gainful occupation in your own business, as confirmed by the Bahamas Immigration Fee Schedule. A separate work permit is required for employment under either tier.

Tax Comparison: Canada vs. The Bahamas for HNI Investors

Sources: Canada Revenue Agency (2025–2026 tax rates), TaxTips.ca, Department of Finance Canada Budget 2025, Bahamas Department of Inland Revenue, Real Property Tax Act (Bahamas).

CRA Form T1135 — Foreign Property Reporting for Bahamas Real Estate

Whether you must file CRA Form T1135 (Foreign Income Verification Statement) depends on how you use your Bahamas property. Under subsection 233.3(1) of the Income Tax Act (Canada), "specified foreign property" includes tangible property situated outside Canada, but explicitly excludes personal-use property — defined by the CRA as property used primarily (more than 50%) for personal use and enjoyment.

Personal-use exemption: If your Bahamas property is used primarily for personal enjoyment — your winter home, family vacation retreat, retirement base — it is excluded from T1135 reporting. This is a question of fact determined case by case.

When T1135 is required: If you rent your Bahamas property for profit more than 50% of the time, it becomes specified foreign property. You must file T1135 if the total cost of all your specified foreign property exceeds CAD $100,000 at any point during the tax year. The cost amount is the adjusted cost base, not fair market value.

Simplified vs. detailed reporting: Total specified foreign property cost between CAD $100,000 and $250,000 uses Part A (simplified — check boxes, top three countries). Above CAD $250,000 requires Part B (detailed — each property listed with maximum cost, year-end cost, and income).

Filing deadline: T1135 is due on the same date as your income tax return — April 30 for individuals (June 15 for self-employed, but tax owing is still due April 30).

Departure Tax, Capital Gains & Canadian Tax Obligations

If you relocate permanently to The Bahamas and cease to be a Canadian tax resident, you trigger a deemed disposition of most worldwide assets at fair market value under section 128.1 of the Income Tax Act (Canada). This means the CRA treats you as if you sold your non-exempt assets on the day you leave Canada, crystallising any accrued capital gains.

Capital Gains Inclusion Rate — 2025 & 2026

The capital gains inclusion rate remains at 50% for 2025 and 2026. The proposed increase to 66.67% for gains above $250,000 was first introduced in the April 2024 federal budget, deferred from June 25, 2024 to January 1, 2026 on January 31, 2025 by Finance Minister LeBlanc, and then cancelled outright by Prime Minister Mark Carney on March 21, 2025. Budget 2025 (tabled November 4, 2025) formally confirmed the cancellation. The Canadian Entrepreneurs' Incentive was also cancelled in Budget 2025.

Lifetime Capital Gains Exemption (LCGE): $1,250,000 for qualified small business corporation shares and farming/fishing property (effective June 25, 2024). Indexed for inflation starting 2026.

Federal tax rate reduction: The lowest federal income tax rate was reduced from 15% to 14% effective July 1, 2025 (14.5% blended rate for 2025, 14% for 2026+), per Budget 2025.

What Triggers Deemed Disposition

Taxable on departure: Non-registered investment portfolios, shares in Canadian and foreign private corporations, foreign real estate (including your Bahamas property if owned before departure).

Exempt from deemed disposition: Canadian real estate (taxed on actual sale), RRSPs, TFSAs, RRIFs, RESPs, RDSPs, FHSAs, and registered pension plans.

Deferral & Mitigation Options

Form T1244: Elect to defer departure tax payment. The deferred tax becomes payable when you actually sell the asset or if you return to Canada. Security may be required for liabilities above CAD $16,500.

Form T1161: List of Properties by an Emigrant of Canada — required if total fair market value of all property owned at departure exceeds CAD $25,000 (excluding cash, pensions, personal-use property under $10,000, and Canadian real estate).

Staying Canadian Without Emigrating

Many Canadian investors purchase Bahamas property without ceasing Canadian residency. In this scenario, there is no departure tax. You continue filing Canadian returns on worldwide income. The Bahamas property simply becomes a personal-use or investment asset reported according to standard CRA rules. This is the most common structure among my Canadian clients who plan to split time between both countries.

Canada–Bahamas TIEA

Canada and The Bahamas signed a Tax Information Exchange Agreement on June 17, 2010 (in force November 16, 2011). This is not a full double taxation treaty but provides for mutual exchange of tax information. Because The Bahamas imposes no income tax, double taxation does not arise in practice.

Rental income: Not taxed in The Bahamas. However, as a Canadian tax resident, you must report worldwide income including Bahamas rental income on your Canadian return. As a non-resident of Canada who has emigrated, Bahamas rental income is not subject to Canadian tax since it is not Canadian-sourced.

CPP and OAS: If you emigrate, CPP and OAS pension payments continue but are subject to 25% non-resident withholding tax under Part XIII of the Income Tax Act. No TIEA reduction available (a full treaty would be required).

Alternative Minimum Tax (AMT) — 2025–2026 Changes

Even with the 50% capital gains inclusion rate, Canadian investors may face higher Alternative Minimum Tax (AMT) exposure. The revised AMT rules (effective January 1, 2024) increased the federal AMT rate from 15% to 20.5% and raised the capital gains inclusion for AMT purposes to 100% (from 80%). The AMT exemption increased to $177,882 for 2025. If you realise large capital gains — including on the deemed disposition at departure — the AMT calculation could result in a higher tax bill than the regular calculation. Discuss AMT exposure with your cross-border tax advisor before triggering any large capital gains events.

Underused Housing Tax (UHT) — Repealed: Budget 2025 repealed the 1% annual UHT that previously applied to certain non-resident property owners in Canada. This does not affect your Bahamas property (UHT only applied to Canadian residential property), but it simplifies the Canadian compliance burden for Canadians who own property in both countries.

Closing Costs for Canadian Buyers in The Bahamas

Foreign buyers should budget approximately 8–10.5% of the purchase price for total closing costs. All transactions are in Bahamian Dollars (BSD), pegged 1:1 to the US Dollar. Canadian buyers wire funds from their Canadian bank (RBC, TD, Scotiabank, BMO, CIBC all handle Bahamas transfers). The buyer pays zero agent commission — the seller pays 6% + VAT.

Property Tax Schedule (Owner-Occupied)

Sources: Bahamas Real Property Tax Act, Department of Inland Revenue, DuPuch Real Estate calculator, Graham Thompson Attorneys.

Properties That Qualify for Canadian Investor EPR

Any residential real estate in The Bahamas valued at $1,000,000 or more qualifies for Economic Permanent Residency. The investment can be a single property or multiple properties totalling the threshold. Properties must be purchased in the applicant's personal name or through a Bahamas-registered company.

Citizenship Pathway for Canadians

After holding Economic Permanent Residency for 10 years and residing in The Bahamas for at least 6 of those years, you may apply for Bahamian citizenship through naturalisation under the Bahamas Nationality Act. The decision is discretionary, granted by the Minister responsible for immigration.

Dual citizenship: The Bahamas does not formally recognise dual citizenship. Technically, you would be required to renounce your Canadian citizenship upon naturalisation. However, enforcement has historically varied. For Canadians: Canadian citizenship is not automatically lost upon acquiring another nationality under the current Citizenship Act (Canada). Voluntarily renouncing Canadian citizenship is irrevocable and affects access to healthcare, CPP, OAS, and the right to live/work in Canada.

Most Canadian investors maintain EPR indefinitely rather than pursuing naturalisation, preserving both their Canadian passport and Bahamas residency rights. EPR provides the primary benefits of residing in The Bahamas without dual citizenship complications.

How Canadian Investors Obtain Bahamas Residency

Glenn Ferguson

BREA #1247 · Bahamas MLS · Residency Consultant · 24+ Years

BREALicensed Agent

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24+Years Experience

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Glenn has guided hundreds of Canadian investors from Toronto, Montreal, Vancouver, Calgary, and Ottawa through Bahamas property acquisition and EPR applications. His expertise includes cross-border transaction coordination with Canadian accountants, T1135 structuring, and departure tax timing.

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