All real estate transactions in The Bahamas are subject to a Government Stamp Tax, which is a transfer tax levied on all property sales. The buyer is responsible for paying one half of this tax and the seller is responsible for paying the other half unless otherwise agreed. Stamp Tax is levied on transactions as follows:
- 4% on $20,000.00 or less*
- 6% on $20,001 to $50,000.00
- 8% on $50,001 to $100,000.00
- 10% on $100,000.00 and over
ANNUAL REAL PROPERTY TAX
The Annual Real Property Tax is based upon assessed market value. Returns are due on or before December 31 each year, and are filed with the Chief Valuation Officer.
On residential owner-occupied properties the rate of taxation is as follows:
- The first $250,000 of value is exempt (residential and licensed rental homes)
- 0.75% On the portion of value between $250,000 and $500,000
- 1% on the value more than $500,000
- The maximum tax payable annually is $50,000
- On the portion of value that does not exceed $7,000: $100.00
- On the portion of value which exceeds $7,000: 1.5%
LEGAL FEES & TITLE INSURANCE
Both buyer and seller will require legal representation by a Bahamian attorney. Bahamas Bar scale fee is 2.5% of the purchase price, which may be subject to negotiation on larger values and on time spent. The Attorney representing the buyer gives an Opinion on the title to the property and can arrange for Title insurance, if required. The risk premium generally runs between .20% – .27% of value.
REAL ESTATE COMMISSIONS
- 6% on Developed Property
- 10% on Undeveloped Property (vacant land)
Local banks offer mortgages to finance the purchase of real estate in the Bahamas. Stamp Duty on mortgages is payable at a rate of 1% on the amount borrowed. Loan facilities for non-Bahamians may only be given in US$. The down payment required is normally 40%-50% of market value
REGISTRATION UNDER THE INTERNATIONAL PERSONS LANDHOLDING ACT
Persons who are not resident in The Bahamas wishing to purchase property or an interest in a condominium, or to hold vacant land exceeding 2 acres, must apply to the Investments Board to register the purchase.
The application fee for a Certificate of Registration is $25.
The fee for a Certificate of Registration is:
- $50 if the property value* is $50,000 and under
- $75 if the property value is more than $50,000 but less than $101,000
- $100 if The property value is $101,000 and over
OWNER OCCUPIED RENTAL HOMES
Owners/operators of owner-occupied rental homes must operate under a license, per the provisions of the Hotels Act. Effective 1st July, 2010 the rate of hotel guest tax collected is 10% of rental amounts received. This tax is collected from the renter and paid to the Government directly, as part of Island Real Estate’s rental service at no extra charge, for vacation homes in its rental portfolio.