How to buy property
- Ensure you have financing approval prior to beginning your property search
- Create a profile of the types of properties you are looking for ie. 2 or 3 bedroom, location, price ranges, garden sizes etc.
- Select an agent that you are comfortable with and who understands your goals and your limitations on property choices.
- Have your deposit ready for when you want to make an offer – this is usually between 5 and 10% of the gross purchase price.
- Select a lawyer for when you want to make an offer. Always ask your lawyer to give you an outline of the cost of their fees. These vary greatly between different lawyers and are approximately 2% of the total gross purchase price.
- View multiple properties with your real estate agent of choice for comparative analysis.
- Make an offer on the most suitable property via your agent in writing.
- Once your offer or counter offer has been accepted in writing (and this may take several rounds of negotiations which is usual in real estate brokering), lodge your deposit with your lawyer in escrow pending the signing of a sales agreement. This shows your firm commitment to buying the property.
- A sales agreement will be drafted and sent to your lawyer by the vendors lawyer.
- Once the attorneys of both vendor and buyer are content with the sales agreement, it will be signed by both parties, and the deposit will be sent to the vendors lawyer pending signing of the conveyance.
- Sales agreements can be written for closing periods of varying amounts of time – 30 days (if financed by cash in hand); 45 days, 60 or even 90 days. Sales agreements can include specific personalized terms ie. “subject to financing” in order that you will not lose your deposit if you are unable to secure financing to buy the property.
- Once all title documents are researched and the lawyers are happy with the legal status of the property, any easements, and ownership, you will be asked to sign the covenants, at which time the outstanding funds for completion will be requested to be transferred to the vendors lawyer.
- Receive your keys and move in!
The Bahamas welcomes investment by non-Bahamians and has created a number of policy documents to facilitate the purchase of Bahamian property.
The “International Land Holdings Act 1993” in particular aims to ease the purchase of properties in The Bahamas by non-nationals. All that is required is registration with the Investments Board and the Central Bank. The cost of this registration varies from $25 - $100.
Bahamas immigration policy permits a homeowners card to non-Bahamian business or home owners. This gives them rights to enter the country at each port along with their spouse and minor children. Non-Bahamians acquiring properties over $1.5 million are also given accelerated consideration for permanent residency status. This cost of the
Home owners card is $500, and permanent residency is $10,000.00.
A non-Bahamian wishing to purchase undeveloped lands of 5 acres or more (that will not be used for a private residence) will be required to obtain a permit from the Registrar General’s office
Fees and Costs
- Purchase price of the property
- Legal fees – 2.5% of the gross purchase price and usually negotiable
- VAT - 10% of gross purchase price. (Buyer and seller usually share this cost 50/50)
NB. First time buyers are exempt from paying stamp duty for a property up to the value of $100,000.00
Annual Costs: Real Property Tax Rates – 2009
Properties in The Bahamas are subject to an annual Property Tax that is based upon the value of the property and also the status of the owner. The Property Tax office will often request an assessment of your property to properly calculate the tax due based upon value at today’s market prices.
Property tax bills are issued in October of each year and are due to be paid by December 31st in the same year to avoid a 5% interest charge.
- Where the property is “owner-occupied”: 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 and less than $5,000,000 the tax rate is 1% of the market value of the property.
- On the portion in excess of $5,000,000 the tax rate is 0.75% of the market value of the property.*
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.)
- Real Estate owned by Bahamians and situated in the Family Islands
- Real Estate approved as commercial farm land (by the Ministers of Agriculture, Trade and Industry and Finance)
- Unimproved real estate 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
- Real estate owned by foreign governments
- Real estate owned by foreign nations used for consular offices or residences of consular officials and employees
- Real estate used exclusively for charitable or public service from which no profit is derived
- Registered historical buildings
For more information on Property Tax contact:
Business Licence/Valuation Unit
P. O. Box N-13
Opening Hours: 9am to 4pm, Monday to Friday