Can a non-Bahamian purchase property in The Bahamas?

Yes, overseas investors may acquire residential properties in The Bahamas of up to 5 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.

Are there any special permits required when purchasing property in The Bahamas?

Permits are required for non-Bahamians, as provided under the International Persons Landholding Act, if one or more of the following applies:

1. 1. The property being purchased is greater in size than 5 acres.
2. 2. The intention is to rent out any or all of the property.
3. 3. The property being purchased is for commercial development.

Non-Bahamians who buy land not requiring a permit must register their purchase with the Foreign Investment Board.

How do I get a permit or register my purchase with the Foreign Investment Board?   

We can help you with this as part of your purchase.  Non-Bahamians are advised to register their investment with the Exchange Control at the Central Bank of The Bahamas to ensure that on the resale of their property all proceeds be returned in the currency of their original investment if they so choose.

In what form is title to property given?

The vast majority of property is sold freehold. There are a few exceptions which are leasehold properties. Leasehold properties are generally government owned properties (Crown Lands), that are leased for agricultural or development purposes. The Government of The Bahamas does not generally sell its property.  The property being sold on Rum Cay through Paradise Is Mine is sold freehold.

What are the closing procedures in The Bahamas and how is the purchaser protected?   

Step 1 - The purchaser’s funds are escrowed with a licensed United States or Bahamian attorney after a Purchase and Sale Contract is executed.

Step 2 - If a U.S. based attorney is holding escrowed funds, then the closing is coordinated with a Bahamian attorney who consummates the transaction in accordance with Bahamian law. The Bahamian attorney issues an Opinion of Title ensuring good and marketable title to the purchaser.

Step 3 - The Bahamian closing attorney will pay the required applicable Stamp Tax, obtain a Bahamian Government stamp, and then will record to purchaser’s deed to complete the closing. The funds for the Stamp Tax will be withdrawn from the attorney’s trust account to pay the Stamp Tax. The deed will be returned to the purchaser from either the coordinating attorney or the closing attorney. This process generally takes one month to complete.

How is purchasing real estate in The Bahamas different than in the United States?

The Bahamas is a commonwealth country with laws similar to England, Australia, Canada and other members of the British Commonwealth. In The Bahamas it is commonplace for the attorney closing real estate transactions to provide the purchaser with an Opinion of Title guaranteeing good and marketable title. This is, in many occasions, provided in lieu of title insurance. The closing attorney performs the title searches and indemnifies the purchasers against title claims through the Errors and Omissions component of his/her liability insurance policies. Bahamian law requires all practicing attorneys to maintain liability insurance in The Bahamas.

Purchasers are protected up to $1,000,000 US (One Million US Dollars) in the unlikely event of any title issues arise. This is, for the most part, the significant difference US purchasers encounter when they purchase Bahamian real estate. Many international property owners are familiar with this process as it is usual and customary in many places throughout the world.

Do I need to engage the services of a Bahamian attorney when purchasing property?

It is not mandatory, but we can provide a list of Bahamian attorneys to help you with this process.  The Bahamian attorney, apart from insuring that the legal documentation is properly prepared, provides an Opinion of Title indemnifying the purchaser against any title defects.  Lawyers in The Bahamas are legally required to carry Errors and Omissions insurance which further protects purchasers from an unlikely oversight. Many times U.S. attorneys coordinate this process with their Bahamian counterparts.

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 can assist you with this process which is very similar to the steps required within the United States, Europe and many places in South America.  We can provide approved building professionals who can assist with this process.   

What are the costs involved in buying or selling property?

The seller is generally responsible for legal fees and real estate commissions. Commissions are more or less 6% for residential transactions and 10% for commercial transactions or for undeveloped property sales. The Purchaser will be responsible for:

• 1. The lawyer’s Opinion Of Title to the property
• 2. Recording fees ($3.50 per page) on the conveyance and other recordable closing documents.
• 3. Payment of the permit fees under the International Persons Landholding Act if applicable.
• 4. The Government Stamp Duty which is tax on the conveyance of real property. This graduated 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 between $20,000 and $50,000, the rate is 4%
• When the value of the consideration is between $50,000 and $100,000, the rate is 6%
• When the value of the consideration is between $100,000 and $250,000, the rate is 8%
• When the value of the consideration is over $250,000, then the rate is 10%

When I resell a property can I repatriate the proceeds of the sale?  

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

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 engineer. As in most places, there are local customs and procedures required in getting the job done efficiently and it is recommended that you utilize the services of the local professionals.

Are there qualified architects, contractors and engineers available in the islands? 

Yes. Most if not all architects in The Bahamas were educated 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 and contractors must qualify for licensing. Civil Engineers, Mechanical Engineers, Electrical Engineers and Architects complete their higher education in other countries and hold international accreditations and must be licensed by their respective local Boards.  We can provide you with the licensed contractors that we work with as part of this process.

 

Are Brokers and Sales Agents in The Bahamas licensed? 

Yes. Brokers and Sales Agents are licensed by The Bahamas Real Estate Association (BREA). Qualifications for licensing include course work and passing a rigorous written exam. BREA is an international member of The National Association of Realtors (NAR) and many BREA members are International Members of NAR holding various accreditations offered by NAR which may include GRI, CRS, CIPS and CCIM. Paradise Is Mine only utilizes licensed BREA members for its closings.

Is there local financing available to non-Bahamians and/or permanent residents?  

Yes, but loans are given in US Dollars at international rates and the down payment required is generally on the order of 40% of value.

What is the cost of construction?

Construction costs in The Bahamas vary widely depending on the location of the construction site, the design of the structure, the materials used and the finishes. In general a modest home costs around $150.00 per square foot; an average home costs $200.00 per square foot; a superior home with high end finishes costs from $200.00 to $400.00 per square foot; and for a super luxury home the cost would be more than $400.00+ per square foot for the finest finishes and details. On average, the cost is approximately 20% higher than a similar home in South Florida. Rum Cay is one of 5 Bahamian islands with a tax abatement on building materials for three more years. On other islands the increased costs are due to freight, duty and delivery to the site which represents approximately 65% of the F.O.B. material cost. Building standards are higher in The Bahamas than in South Florida. The majority of homes are built to meet a very strict building code.

What personal taxes are there in The Bahamas?  

There are no personal income taxes, capital gains taxes, inheritance taxes, or corporate taxes.There are no sales taxes with the exception of the Stamp Duty which is paid when you first purchase real property. The Bahamas Government's main source of revenue is from customs duties on all goods imported into The Bahamas. This duty may be as low as 7 % as in the case of raw lumber or computer software. Duties are as high as 75% in the case of luxury automobiles, 160% on raw tobacco and 210% on cigarettes. 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?  

The opportunity to live and work in a warm and pleasant environment in addition to significant tax advantages for foreign nationals with high income who desire not to be taxed. The advantages vary depending on the citizenship of the applicant and the tax laws of the applicant's home country. We can direct you as part of this process.

Is it possible to obtain Bahamian citizenship?  

Yes. It is possible. When obtaining citizenship, favour is typically given to Bahamas property owners or investors and their immediate families. Purchasing property is easy for foreign nationals. We can assist you with this process. If you have ever owned land in The Bahamas it is easy. If you have not it is just as easy.

How long does the residency process take?

Accelerated consideration of applications for annual or permanent residence will be given to major international investors and fit and proper owners of residence valued at $500,000 or more within six months.

Is it possible to live and work in The Bahamas?  

Yes. 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 order to obtain a work permit an employer must demonstrate that there is not a Bahamian ready willing or able to fill the position.  

Information required from non-Bahamian purchasers of real estate in The Bahamas: 

• 1. Full names and addresses, and content info for all individual purchasers on title.
• 2. Present occupation and nationality of person taking title if any.
• 3. Immigration status in The Bahamas of persons on title, if any.
• 4. If title is to be taken in name of company then the registered office, the company name and contact person must be provided.
• 5. Dates and places of birth of any person who will be on title if the title is not in a company's name.
• 6. List and description of any other real estate you own in Bahamas owned by person on title.
• 7. Purpose for which the property being purchased. i.e. personal residency, rental property, or other purpose.
• 8. How the property will be titled; joint tenants with a survivorship rights; tenants in common with or without survivorship such as partners; etc.
• 9. A standard purchase contract, similar to ones found within the United States and Europe, must be provided to The Bahamas Government as part of this process.
• 10.If you desire to purchase more than 5 acres, or want to rent your property, then a special permit is required. This takes a little more time but is easy to obtain.

 

Miscellaneous dynamics of purchasing properties include:  

Companies incorporated outside of The Bahamas will have to be registered as a foreign corporation as of 1992.
The cost for foreign incorporation is approximately $1,500.
The time required to obtain a permit to rent your property is between two to six weeks.
Permits will also be required when more than one person is taking title to a property.
Permits are also required if you own other real estate in the same locale which is used as personal place of residence.
Turn key solutions including construction, transportation, and professional services can be provided.
Paradise Is Mine LLC can guide you with every step in this process. Click here for details.