The Property Banks Buyers Guide to the Bahamas
A
change in residence offers numerous important tax planning
opportunities and is therefore an increasingly important aspect of
global solutions to tax and estate planning for international
clients.
Annual or Permanent Residence
Accelerated consideration of applications for annual or permanent
residence will be given to major international investors and owners
of residences valued at $500,000 or more.
International Owners of Second Homes
Overseas Investors may acquire residential properties in The Bahamas
of up to five acres without prior Government approval. Such
acquisitions are required to be registered in accordance with the
International Persons Landholding Act. Second Home Owners are
eligible for a Home Owners Residence Card, renewable annually. This
card will facilitate entry into The Bahamas and entitle the owner,
his spouse and minor children to enter and remain in The Bahamas for
the duration of the validity of the card. Application may be made to
the Director of Immigration.
Permit
A permit is required for a non-Bahamian in the following instances:
Undeveloped land of five acres in size or larger
The property is not a private residence, or is not intended for
development as such
Failure to obtain a permit will render the acquisition null and void
but the foreigner will be entitled to recover all monies paid in
consideration of the acquisition less any legitimate deductions. If
a permit has been granted for the acquisition of land and the
intended usage changes then the permit must be varied by the Board
otherwise it will be invalid.
Leases
Foreigners are not required to obtain permits, register leases or
letting agreements unless they are for trade or business purposes
and the term can exceed 21 years.
The Government Stamp Tax on Property Conveyances
A graduated tax is payable on the conveyance of all real property in
The Bahamas based on the value as follows:
Up to and including $20,000.00 – 2%
From $20,000.01 to $50,000.00 – 4%
From $50,000.01 to $100,000.00 – 6%
From $100,000.01 to $250,000.00 – 8%
$250,000.01 and over – 10%
A first time homebuyer purchasing a home valued under $250,000 may
apply for an exemption of the Government Stamp Tax.
The usual practice in The Bahamas is for the Government Stamp Tax to
be shared equally between buyer and seller unless otherwise agreed
upon.
Real Property Tax Rates - Tax Act amended as of Jan. 1st, 2003
In respect of owner-occupied property: The first $250,000 is tax
exempt.
On that portion in excess of $250,000 and less than $500,000 the
rate of tax is 0.75% of the market value of the property;
On the portion in excess of $500,000 the tax rate is 1% of the
market value of the property.
The maximum annual tax shall not exceed $35,000.
In respect of unimproved property other than unimproved property
exempt by virtue of Section 39 of the Real Property Tax Act:
Upon that part of the market value that does not exceed $3,000 a fee
of $30.00
Upon that part of the market value which exceeds $3,000 but does not
exceed $100,000 a tax rate of 1% per annum of the market value of
the property.
In respect of any other property:
Upon that part of the market value that does not exceed $500,000 a
tax at the rate of 1% per annum of the market value;
Upon that part of the market value in excess of $500,000 a tax at
the rate of 2% of the market value of the property.
“Market Value is defined as the amount the property would realize,
if sold in the open market, without any encumbrances or
restrictions. If the return is not filed, the owner is guilty of an
offense, and upon conviction thereof, may be fined up to $3,000.
Persons knowingly making false statements may be liable upon
conviction to a fine of up to $3,000 or six months imprisonment, or
both fine and imprisonment. If the tax is not paid on or before the
last day the tax becomes due, a 10% surcharge is added.
In the case of an extension of time, the Chief Valuation Officer may
postpone the date on which the tax is payable in a particular case,
by notice in writing.
Exemptions
Property owned by Bahamians and situated in the Family Islands is
exempt from property tax. Property approved as commercial farm land
(by the Ministers of Agriculture, Trade and Industry and Finance) is
eligible for property tax exemptions.
Also exempt from property tax are:
Unimproved property owned by Bahamians, meaning property without
physical additions or alterations, or any works benefiting the land
which have not increased the market value thereof by $5,000 or more;
Places of religious worship; school buildings and their gardens and
playing areas;
Property owned by foreign governments;
Property owned by foreign nations used for consular offices or
residences of consular officials and employees;
Property used exclusively for charitable or public service from
which no profit is derived.