How to buy a property/Real Estate in the Bahamas

A brief guide to the buying process for the Bahamas

Are there any special permits required when purchasing property in The Bahamas? Permits are required by non-Bahamians, as provided under the International Persons Landholding Act, if:The property being purchased is greater than 5 acres.

OR

The property being purchased is for commercial development.
Non-Bahamians who buy land for which a permit is not required must register their purchase with the Foreign Investment Board under such Act. Available as part of our service.

To purchase an apartment you do not need a permit.

How do I go about getting a permit or registering my purchase with the Foreign Investments Board?

Non-Bahamians should also register their investment with the Exchange Control at the Central Bank of The Bahamas insure that on resale they will be able to remit the net proceeds of sale outside the Bahamas in the currency of the original investment. Available as part of our service.

In what form is title to property given?
The vast majority of property is sold Freehold. There are a few exceptions of leasehold properties.

Do I need to engage the services of a local attorney when purchasing property?
No, but the appointment of a local attorney is highly recommended. Apart from insuring that the documents of title are properly prepared and are in good order the local attorney, when representing the buyer, gives an Opinion on the title to the property. This Opinion is considered to be the same as title insurance as the lawyer is liable should the purchaser find that there is a defect in the title. Local lawyers carry indemnity insurance.We can recommend a local lawyer in Nassau

Is title insurance available in The Bahamas?
Yes. There are companies in the Bahamas offering title insurance. The risk premium generally runs between .20% - .27% of value.

What are the costs involved in buying or selling property?

The Government Stamp Duty (Tax on the conveyance of real property). This is a graduated Tax. The total amount of the Tax is calculated as follows:

When the value of the consideration is less than $20,000, the rate is 2%
When the value of the consideration is equal to or greater than $20,000 and is less than $50,000, the rate is 4%
When the value of the consideration is equal to or greater than $50,000 and is less than $100,000, the rate is 6%
When the value of the consideration is equal to or greater than $100,000 and is less than $250,000, the rate is 8%
When the value of the consideration is equal to or greater than $250,000, the rate is 10%
This tax is split between the vendor and the purchaser.

The Purchaser will be responsible for:

1. 1/2 of the Government Stamp Tax as set out above.
2. The purchaser´s legal fees as detailed above. This fee includes the lawyers Opinion on the title to the property.
3. Recording fees ($3.50 per page) on the conveyance and other closing documents which need to be recorded
4. Payment of the permit under the International Persons Landholding Act if applicable

In the event that the sale is a "Net Sale" the purchaser would be responsible for payment of all of the above-mentioned fees.

After I purchase a property will I be able to repatriate the proceeds of sale whenever I sell it?

Yes. You will be able to repatriate the entire proceeds including any profits provided you register the purchase with the Exchange Control Department of the Central Bank at the time of purchase.

Do I need any special approvals in order to build on a property or to make any changes to an existing structure?

Yes. You will need to obtain approval from the Town Planning Board and a building permit issued by the Ministry of Works. A local architect or engineer would be able to assist you with this. Available as part of our service.

Are there good qualified architects, contractors and engineers available in the islands?
Yes. Most if not all architects in the Bahamas were schooled either in the United States, Canada or the United Kingdom and have international accreditations. There is a local licensing Board for architects. The construction industry is also regulated, but the qualifications for licensing are not nearly as rigorous. The leading contractors are all civil engineers with international accreditations or have certified engineers on staff. Many of the smaller contractors are products of a good apprentice system and are very adept and skilled at efficiently carrying out residential construction. Civil, mechanical and electrical engineers in the Bahamas, like the architects were schooled in other countries and hold international accreditations from those respective countries and must also have a license issued by their respective local Boards.

May I use the services of a non-resident architect?
Yes, but that architect cannot work in the Bahamas without a permit to do so. All building plans submitted to the Town Planning Board and the Ministry of Works must be signed off by a local licensed architect and local engineers. As in any jurisdiction there are local customs and procedures required in getting the job done and it is recommended that you utilize the services of the local professionals.

What is the cost of construction?
Construction costs in The Bahamas, as you might imagine, vary widely depending on the location of the construction site, the design of the building, the materials used and the finishes. Costs may be as low as $65.00 - $80.00 per square foot for low cost housing, however, a modest or minimum structure consisting of concrete block construction, timber roof framing and asphalt roof shingles will cost between $100.00 to $150.00. An average home will cost from $150.00 to $200.00, but not with top of the line finishes such as marble tile and granite or Corian countertops. A better than average home with good finishes, will cost from $200.00 to $400.00. For a luxury home the cost would be more on the order of $400.00+ per square foot for the finest finishes and details. On average you can count on the cost being approximately 40% higher than a similar home in south Florida. This is mainly due to freight, duty and delivery cost to site representing approximately 65% of the F.O.B. material cost. It should also be pointed out that building standards are higher in the Bahamas than in South Florida. The majority of homes in the Bahamas are of concrete block or poured concrete construction and are built to meet a very strict building code.

Is there local financing available to non-Bahamians and/or permanent residents?
Yes, but the loan facility may only be given in US$´s at international rates and the down payment required is generally on the order of 40% of value.

What taxes do you have in The Bahamas?
First and foremost we have no income tax, capital gains taxes or inheritance taxes. There is no sales tax with the exception of the Stamp Duty paid on the conveyance of real property.The Bahamas Governments main source of revenue is from customs duties on all goods imported into The Bahamas. This tax may be as low as 7 % as in the case of raw lumber, computer software and as high as 75% in the case of luxury automobiles, 160% on raw tobacco and 210% on cigarettes. There is an additional 7% stamp duty payable on these goods. The typical rate of duty is around 35%.

Is it possible to establish residency in the Bahamas and if so how does one go about it?
Yes. The Government of the Bahamas has set specific guidelines that allow non-Bahamians to establish permanent residency in The Bahamas. There are two categories of permanent residency: Permanent residency with the right to work and permanent residency without the right to work. One of the criteria for permanent residency is the investment of a minimum of $500,000 in The Bahamas. This investment may take the form of the purchase of real property with a minimum value of $500,000. Non-Bahamians who own property in The Bahamas may apply to the Director of Immigration for an annual homeowner´s residence card. This card is renewable annually and entitles the owner, spouse and any minor child/children endorsed on the card to enter and remain in The Bahamas for the validity of the card. It is intended to facilitate entry into The Bahamas with minimal formalities.

What are the advantages to establishing permanent residency in The Bahamas?
Apart from the opportunity to live and work in a warm and pleasant environment there are also significant tax advantages for citizens of countries with high personal and corporate income taxes as well as inheritance taxes. The advantages vary depending on the citizenship of the applicant and the tax laws of the applicant´s home country.

Is it possible to obtain Bahamian citizenship?
Yes it is possible, but it is a long and involved process. Typically favour is given to long-term permanent residents and spouses of Bahamians

Is it possible to live and work in The Bahamas?
Yes. But you must appreciate that The Bahamas has a small young population. The total population of the Bahamas is less than 300,000 with a total land area of 10,000 square miles spread over 700 islands. The policy of the Bahamas Government is to protect the well being and provide maximum employment opportunities for Bahamians. In a nutshell in order to obtain a work permit to work in The Bahamas an employer must demonstrate that there is not a Bahamian ready willing and able to fill the position. Quite obviously the Bahamas would be overrun overnight if these safe guards were not in place.

This information is provided as a guide only and subject to change. You should always consult a specialist in any area of concern.

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