REAL PROPERTY COSTS
The Bahamas remains committed to a tax neutral platform upon which
international persons receive the same tax benefits as Bahamians.
GOVERNMENT TAXES ON CONVEYANCES
- 2.5 % Government Stamp Duty on all real estate transactions
- 7.5% Value Added Tax (VAT) on all property transactions valued at $100,000 or more
On a “Gross” sale, the Stamp Duty and conveyance VAT is typically shared equally between buyer and seller unless otherwise agreed upon. So, Buyer and Sell would each pay 5% total Stamp Duty/VAT.
VALUE ADDED TAX (VAT)
- When considering the purchase of a property in The Bahamas, there are various professional services involved that will incur VAT. These include fees for appraisals, title search fees, legal fees, and real estate commissions.
- Although not a professional fee incurred during the purchase of a residential property, a buyer needs to bear in mind that homeowner association fees are also subject to VAT.
- Both buyer and seller are required to have legal representation by Bahamian attorney.
- There is a 7.5% Value Added Tax (VAT) on Legal Fees.
BAHAMAS REAL ESTATE COMMISSIONS
- Developed property: 6%
- Undeveloped property: 10%
- Rentals: 10%
- A 7.5% Value Added Tax (VAT) is charged on all real estate services.
ANNUAL REAL PROPERTY TAX RATES
In respect of owner-occupied property:
- The first $250,000 of market value is tax exempt
- More than $250,000 and not exceeding $500,000 of market value: 0.625%
- More than $500,000 and not exceeding $5,000,000 of market value: 1%
- More than $5,000,000 of market value: ½%
In respect of unimproved property: (other than unimproved property exempt by virtue of Section 39 of the Real Property Tax Act)
- First $7,000 of market value is $100
- More than $7,000 of market value 1½%.
In respect of any other property:
- First $500,000 of market value is 1%
- More than $500,000 of market value is 2%
- Property owned by Bahamians and situated in the Family Islands is exempt from property tax. Property approved as commercial farm land (by the Minister of Agriculture and Marine Resources, and the Minister Finance) may be eligible for property tax exemptions.
- Unimproved property owned by Bahamians, meaning property without physical additions or alterations, or any works benefitting 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