Our Bahamas//investor information
Real estate agents charge a 10% commission on the sale of undeveloped property. The commission for developed property, whether residential or commercial, is 6%.
As of July 1, 2015 stamp duty has been reduced to a rate of 2.5%. Property transacations over $100,000 are subject to 7.5% VAT. The Vendor and Purchaser each pay half of the stamp duty and VAT unless otherwise agreed.
In property sales, sellers generally pay commission and legal fees. Sometimes property owners list a net sales figure, in which case the agent adds those charges to the price quoted to prospective buyers.
Stamp duty on mortgages is payable at a rate of 1% on the amount borrowed. The Bahamas Bar Assoc. follows a minimum scale fee for conveyances and mortgage transactions at 2.5% of the sale price plus out-of-pocket expenses.
Value Added Tax (VAT)
As of January 1, 2015, VAT charges of 7.5% will be levied on commissions, legal fees, appraisals, property transactions over $100,000, as well as rentals and Common Area Maintenance (CAM).
Effective January 6, 2014, licenced financial institutions wishing to determine whether or not their clients are eligible for stamp duty exemption as first time Bahamian homeowners can now apply to the stamp exemption unit. Net purchases would only be allowed on homes in cases where the appraised value of the home and property does not exceed $200,000. In cases where the appraised value of the home and property exceeds $200,000 and falls below $250,000, full stamp duty exemption would be granted on the first $200,000 and on one half of the difference. In cases where the total appraised value of the home and property exceeds $200,000, stamp duty exemption would only be granted on the purchaser’s portion.
International Persons Landholding Act, 1993
Amended in 2007, The International Persons Landholding Act, 1993, made it easier for non-Bahamians and companies under their control to own property.
- A non-Bahamian or permanent resident who purchases or acquires an interest in a condominium or property to be used by him as an owner-occupied property, or for construction of premises to be used as an owner-occupied property, must apply to the Secretary to the Investments Board (IB) to register the purchase. Application for Certificate of Registration Form1 must be filed with the Bahamas Investment Authority (BIA), Office of the Prime Minister. Contact BIA for a complete list of the required documentation that must accompany the application along with the original receipt from the Public Treasury showing payment of the requisite fee of $250.
- Upon receipt of the above, the acquisition is registered and a certificate of registration issued.
- A permit to acquire property is required if the property is undeveloped land and the purchaser would become the owner of two or more contiguous acres. A permit is also required if the non-Bahamian intends to acquire land or an interest therein by way of freehold or leasehold, when the acquisition is not in accordance with item 1.
- Non-Bahamians who own homes in The Bahamas may apply to the Director of Immigration for an annual homeowner’s card that entitles the owner, spouse and dependent children to enter and remain in The Bahamas for the duration of the validity of the card (one year). This facilitates entry - it does not confer resident status in The Bahamas.
All applications for permits, Form 3, are to be submitted to BIA for consideration by the IB. If approved, a letter is issued and payment of the requisite fee of $500 is paid at the Public Treasury and the original receipt returned to BIA. The permit is then issued by the Secretary to the Board. Certificate of registration or permit (with acquisition documents) must be recorded in the Registrar General’s Dept.
Certificate of registration - $250
Permit - $500
Annual homeowner’s residence card – $250
Real Property Tax
Bahamians and non-Bahamians owning real property in The Bahamas must pay property tax. Returns are due on or before December 31 each year, and are filed with the Chief Valuation Officer. Taxes are paid to the Public Treasury and can be paid at the property tax office or online at www.bahamasgov.bs. Rates are as follows:
Property Tax Rates
- Owner-occupied residential property as of July 1, 2015.
- The first $250,000 of market value - Exempt
- On market value over $250,000 and up to $500,000* - 0.625%
- Over $500,000 - 1% (subject to a maximum of $50,000)
- Vacant/Unimproved Land (non-Bahamians)
- First $7,000 of market value - $100
- Portion over $7,000 - 1.5%
- All other properties/commercial
- First $500,000 of market value - 0.75%
- Market value over $500,000 - 2%
- Residential Property (property not owner-occupied, comprising not more than four units (exclusive of outbuildings), used solely as a dwelling, beneficially owned by Bahamians and from which no commercial enterprise is conducted.
- Property valued under $75,000 - $300
- Property valued over $75,000 - 0.625%
*First-time homewoners exempt for 5 years from date of occupancy or conveyance.
Persons owning real property in the Bahamas are entitled to make application to the Real Property Tax office for reassessment once every 5 years. Property owners can have a law firm act on their behalf or undertake the application themselves. Requirements for reassessment include presenting a copy of the most recent tax bill, a current appraisal from a licensed reputable appraiser, completion of the Property Tax Application Assessment Form (available at the property tax office or online at www.bahamas.gov.bs), along with the submission of a signed letter from the owner of record (or their attorney) requesting the reassessment of annual real property tax liability. A 10% discount is applicable on accounts that are current and paid in full by March 31 in any year.
At the time of closing a sale transaction, the attorney for the new owner of the real property registers the sale with the property tax office. A current appraisal is often requested and presented along with the registration.
Your HGChristie Appraisal Team can provide services to address property tax assessment concerns.
Outstanding Property Taxes
- The Treasurer now has the power to sell unimproved/vacant land where real property taxes are in arrears and unpaid for at least 6 months after the expiration of 30 days from becoming due.
- New surcharge of 5% on all outstanding real property taxes owing after 31st December 2009.
Planning & Subdivision Act, 2010
As of 1st January, 2011, homeowners occupying single-family homes must obtain proper business licenses and home renovation permits to alter their homes for commercial purposes. Land to be used for commercial purposes must dedicate a portion of the parcel for a park, recreation and open space.
No development of a land can be commenced or carried on unless the developer obtains (i) Land Use Plan Approval (ii) Zoning Bye-law Approval (iii) Site Plan Approval (iv) Zoning Compliance (v) Architectural Design Approval (vi) Subdivision Approval and (vii) Severance Approval.
No lots can be sold, agreed to be sold, or conveyed in a subdivision that has not received prior approval. In order to obtain approval the following must be in place (i) every road must be in accordance with the Land Use Plan; (ii) all lots must conform to the Zoning Bye-Law; (iii) submitted plans must indicate grading and contours of the land and the provision for the adequate disposal of surface and waste water, installing of all utilities, location of sidewalks and street lighting; and (iv) every lot must be surveyed with all markers in place on the ground.
All subdivision roads other than private roads must be completed and conveyed to the Government within one (1) year from the date of approval. All approved roads must be constructed to the satisfaction of the Minister who may also enter into agreements with respect to the construction, maintenance and operation of private roads including private water and sewerage works or other private road services.
Any person who breaches the subdivision requirements may on summary conviction be fined twenty thousand (B$20,000.00) dollars or sentenced to one (1) year in prison.
Property owners are permitted to divide a suitable parcel of land up to four (4) times without requiring subdivision and land use plan approval by making application for severance to the Town Planning Dept.