Do I pay income or capital gains tax on Bahamas real estate?

No — The Bahamas has no income, capital gains or inheritance tax; the main real estate taxes are annual Real Property Tax and VAT on conveyances.

What are the owner-occupied property tax brackets?

First $300,000 exempt; next $200,000 at 0.625% per annum; balance above $500,000 at 1% per annum (per DIR).

How is VAT charged on conveyances in 2025?

Individuals: 2.5% (≤$100k), 4% ($100,001–$300k), 6% ($300,001–$500k), 8% ($500,001–$700k), 9% ($700,001–$1M), 10% (>$1M). Companies/other entities: typically 10%.

When did the 2025 legal changes take effect?

Real Property Tax (Amendment) Act effective 1 July 2025; select VAT (No. 2) provisions effective 1 September 2025.

How do I qualify as owner-occupied?

Use the dwelling as your residence exclusively and keep occupancy documentation for DIR; see 2025 amendments for clarified definitions.

Annual Real Property Tax (Owner-Occupied)

Brackets per the Department of Inland Revenue (DIR). Confirm your latest assessment and status each year.

Market Value (BSD)	Rate / Treatment
First $300,000	Exempt
Next $200,000	0.625% per annum
Balance above $500,000	1.0% per annum

Tip: Keep proof of occupancy and ensure the property is used exclusively as your dwelling to maintain owner-occupied status.

Residential (≤4 Units) & Other Classes

Residential (≤4 units, not owner-occupied) and other classes (investment, commercial, or foreign-owned vacant land) carry different bands and often higher effective rates than owner-occupied. Always verify classification before you model cash-flow.

Residential (≤4 units) may include a flat-fee tier at the low end with percentage bands thereafter.
Investment/commercial properties often model at ~1–2% effective bands depending on value.
Foreign-owned vacant land may attract higher holding costs; check status before closing.

For exact brackets and current caps, confirm with DIR.

Conveyance VAT at Closing (Buying/Selling)

VAT on the supply of real property is charged at closing. For individuals, rates are graduated by value; for companies/other entities, a 10% rate typically applies.

Buyer Type	Value	VAT
Individual	≤ $100,000	2.5%
Individual	$100,001 – $300,000	4%
Individual	$300,001 – $500,000	6%
Individual	$500,001 – $700,000	8%
Individual	$700,001 – $1,000,000	9%
Individual	> $1,000,000	10%
Company / Other Entity	Any	10%

Bahamian first-home concessions can apply within certain bands. Your attorney will confirm eligibility and documentation.

2025 Legal Updates You Should Know

Real Property Tax (Amendment) Act, 2025 — effective 1 July 2025; clarifies definitions (including owner-occupied) and strengthens administration/enforcement.
VAT Amendment (No. 2), 2025 — effective 1 July 2025 (with select items effective 1 Sept 2025); confirms the Comptroller’s powers to assess VAT on real property supplies and priority of VAT over certain fees/commissions.

Translation: documentation, declarations, and timely payments matter more than ever. Get your file clean early.

Practical Timeline & Compliance Checklist

Before offering/closing: Confirm property class (owner-occupied vs investment), current assessment, and any concessions.
At contract: Model total cash at close (VAT, legal, commission, search, recording) and verify who pays what.
Post-closing: Register changes, declare improvements, and update billing address/email in the DIR portal.
Annual rhythm: Review assessment, pay by due dates, file for exemptions where eligible, and keep occupancy proof.

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Investor Notes (Cash-Flow & ROI)

No income or capital-gains tax can improve net yields vs. many jurisdictions — but include property tax and closing VAT in your pro-forma.
Owner-occupied status is powerful. If you won’t qualify, budget the higher non-owner bands.
For development/major works, coordinate early on VAT treatment and documentation.

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FAQs

Do I pay income or capital-gains tax in The Bahamas?: No. The Bahamas does not levy personal income, capital-gains, or inheritance tax. Your key real-estate taxes are annual Real Property Tax and conveyance VAT at closing.
How do I qualify as owner-occupied?: Use the home exclusively as your residence and meet the occupancy requirements. Keep documentation; the 2025 amendment clarifies definitions and strengthens compliance.
When are property tax bills due?: The bill becomes due once produced; pay per the Real Property Tax Act to avoid interest. The DIR portal shows balances, discounts, and surcharges.
Can I get a discount for early payment?: Early-payment discounts and late surcharges are periodically published by DIR. Check the current year’s circular before you pay.
Do first-time Bahamian buyers get relief?: Yes — concessions can apply within certain bands. Your attorney will confirm eligibility and documents required at closing.

Official & Reference Links

This page is an educational summary. It is not legal or tax advice. Verify all figures with the Department of Inland Revenue and your Bahamian attorney.

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