Owning Property in The Bahamas: Everything You Need to Know

Owning property in The Bahamas is not just about acquiring real estate—it's about embracing a lifestyle of luxury, relaxation, and adventure. From investors to vacationers, expats to retirees, there's a perfect home for everyone in this paradise. 

For savvy investors, the Bahamas can be a profitable venture. Investing in Bahamian real estate can yield promising returns thanks to its booming tourism industry, stable economy, and capital growth. From beachfront condos to luxury villas, a diverse range of properties suit your investment strategies.

Whether you buy a second home in The Bahamas to live or to invest, let's see what owning a property in The Bahamas entails. We will go over the buying process, the costs and logistics of building or renovating a property, and the ins and outs of maintaining it as an expat. So, let's look at the ins and outs of owning property in The Bahamas.

Buying Property in The Bahamas

Buying property in the Bahamas is hassle-free, especially when you partner with seasoned realtors like ERA Dupuch Real Estate. Our experts offer invaluable guidance and insider tips for those considering a move to this tropical haven.

So whether you're in the market to buy a vacation home or eyeing a lucrative investment opportunity, follow these simple steps to find your slice of paradise in The Bahamas.

Partner with a Professional Agent:  The most crucial step in buying real estate in The Bahamas is to engage experienced local realtors. Their local insight, market knowledge, negotiation prowess, and legal know-how will help you safely and efficiently navigate the diverse real estate options across the islands.

Monitor Costs:  Carefully scrutinise your budget before making any hasty purchase decision. Remember to factor in the additional costs and fees like VAT, commissions, and legal fees.

Do your Homework:  In addition to seeking professional help, do some research yourself as well. Decide on the best island to live on and the neighbourhood and property type that suits your preferences. A luxury oceanfront villa, a convenient condo in a gated community, or a private cosy cottage by the beach—what would you like? 

Identify deal-breakers:  Differentiate your must-haves from your nice-to-haves. Factors like air transportation access, safety, healthcare facilities, pet-friendliness, schools, and lifestyle choices( golf courses, clubs, spas) are pivotal in shaping your decision.

Legal Considerations:  Non-Bahamians require permits to own certain property types. Regardless, you must get title verification, complete required registrations (like registering the property with the Foreign Investment Board), follow zoning regulations and understand the laws governing rentals and property renovations.

Tour Selected Properties:  Once you've selected a few properties, it's best to visit them in person and get a feel for the place. If you reside outside The Bahamas, reputable realtors can give you a virtual tour of your shortlisted properties.

Close the Deal:  It's best to let your agent and legal advisor take charge of the negotiations and deal closure. Your agent will negotiate the price and get you a good deal, and your lawyer will make sure you go by the book and save any hassle down the road. 

Bahamian Property Laws

Owning property in The Bahamas comes with its own set of rules and regulations, but with the right team of realtors and lawyers, navigating all the complexities is a breeze. 

At ERA Dupuch Real Estate, we will guide you every step of the way and connect you with reliable lawyers and insurance companies so you can enjoy a smooth and successful real estate transaction.

Tax Savings For Homeowners

The Bahamas' tax-neutral status directly contributes to higher profits for investors and homeowners, making it an appealing destination for property investment.

Since there's no income tax in the country, both residents and non-residents can keep their earnings without worrying about deductions. You can even pocket all the rental income irrespective of your origin or status in the country. 

Additionally, there are no capital gains or inheritance taxes, so you don't pay taxes whether you sell your property or transfer it to the next generation. 

Tax Implications of Owning a Property in The Bahamas

Although there is no income tax, you must pay a few other taxes and fees when buying or selling real estate in the country. 

Value-Added Tax (VAT):  Non-Bahamian buyers are subject to a 10% VAT on purchases exceeding $100,000 and 2.5% on those below. Both buyers and sellers pay the VAT in a 50:50 ratio.

Real Property Tax:  Property owners are required to pay an annual real property tax, which is determined based on the property's market value, usage, and ownership.

Residency and Citizenship Program

One doesn't have to be a resident or Bahamian to buy property in The Bahamas. However, if you plan to stay for an extended period, you'll need a residence permit. Owning a property in The Bahamas qualifies you for permanent residency. And if your investment exceeds $750,000, you will receive expedited consideration for residency.

Permanent residency allows you and your family to live and work in The Bahamas. You may be eligible for citizenship after 10 years of living in the country.

Cost of Owning a Property in The Bahamas

Owning a property in The Bahamas is a dream for many, but it's essential to understand the costs involved beyond the purchase price. There are several financial considerations, from initial buying costs to ongoing maintenance expenses. 

Buying Cost

As you estimate the cost of buying a property in The Bahamas, many factors will influence your budget. Setting a realistic budget is a crucial part of owning real estate, and for that, you need to be clear about your non-negotiables. 

Property Price:  Whether you're eyeing the vibrant streets of Nassau, the extravaganza of Paradise Island, or the tranquillity of Eleuthera — residing on any island comes with a different price tag. Factors like property size, property type, amenities, and proximity to stunning beaches can tilt the scales even within the same island. 

So, while those deluxe waterfront mansions might catch your eye, consider the comfort and affordability of cosy condos. The approximate price of a condo ranges from $550,000 to $495,000 across Nassau, Exuma, and Treasure Cay, whereas a beachfront house ranges between $3,000,000 and $495,000 for the same islands. 

Distinguish your needs and wants, determine your finances, and see if you need financial assistance to own your Bahamian dream home!

Legal Fees:  You will need an attorney to purchase property in The Bahamas. The fee typically amounts to around 2.5% of the purchase price. Both seller and buyer pay their respective lawyers. 

Commission:  You may need to pay real estate commission, although sellers are usually responsible for the payment. BREA standard commissions are as follows:

  • Unimproved Property/Vacant Land: 10% of the sales price
  • Improved property/Homes/Condos: 6% of the sales price
  • Commercial property or building: 6% of the sales price
  • Business: 10 % of the sales price.

You will also need to pay a 10% VAT on the commissions.

Maintenance Cost

Maintaining a property involves various costs, from routine upkeep and repairs to addressing damage from sea air exposure and hiring someone to tackle maintenance tasks unique to the tropical environment (in your absence).

Exposure to sea air can lead to corrosion and deterioration of buildings and outdoor structures, such as wooden decks, metal fixtures, and outdoor furniture. To minimise damage, it is wise to invest in protective coatings, regular cleaning, sealing, and repainting.

The cost of upkeep can vary depending on the size and type of property, starting from around $100. For example in Grand Bahama, the upkeep cost for a condo can range from $200-$1000 a month.

Regular maintenance will preserve your dream home's condition, aesthetic appeal, and appreciation value so you can get a solid ROI (return on investment) when you decide to sell. 

Hiring a Property Manager for Extended Absence

If you plan to stay outside The Bahamas or want to keep your hands off managing the property, you can hire a reliable property manager or management company.

If you own a rental property, the manager will handle all the related tasks, from screening tenants and sorting lease agreements to handling repairs and maintenance. Other services typically include collecting rent, paying bills, making income statements, handling tenant relations, and finding new tenants when needed. 

For vacation or second homes, estate management services may encompass monthly inspections, housekeeping, mail handling, and overseeing household staff. In essence, a property manager ensures everything runs smoothly in your absence.

If you're going to be absent from the property for an extended duration or don't want to involve yourself in its upkeep or tenant relationship, budgeting for property management is a wise choice to ensure your Bahamian property is well taken care of, allowing you to enjoy peace of mind while you're away.

Hurricane Threat and Property Management

Like other coastal regions and island countries, the Bahamas can expect occasional storms and hurricanes. However, they're less of a threat than the hype. The real risk property owners should understand and safeguard against is the routine wear and tear to coastal properties due to rain and salty sea air.

Preparing for storms and hurricanes can minimise property damage. Here are a few ways to safeguard your investment against these natural threats.

Hurricane Insurance:  Many people find it costly, but it's crucial to protect your investment against potential damage caused by hurricanes. Hurricane insurance typically covers repairs and rebuilding and costs around 2% of the property value. The exact value depends on factors like proximity to the ocean, elevation, size, etc.

Hurricane Proofing:  To minimise the risk of hurricane damage, hurricane-proof your home or building. Follow the strict building codes for your safety. Install storm shutters, reinforce doors and windows with plywood, secure loose outdoor furniture and structures, and ensure proper drainage systems to prevent flooding.

Clear Surrounding:  Trim any nearby tree branches and remove any dead or weak trees that are at risk of breaking and falling during the storm. 

Permits for Building, Expansion, Renovation

Due to the country's unique geographical location and the pristine nature of many of its islands, the government has strict building, renovation, and zoning regulations. Most rules are similar for Bahamians and non-Bahamian owners, but foreigners also need to obtain additional permits. 

For example, foreign buyers will need permits to buy undeveloped properties over 2 acres, rental properties, or properties for commercial purposes. You must also register your acquisition according to the International Persons Landholding Act

We always recommend engaging a local attorney to ensure legal compliance. 

Similarly, the Physical Planning and Subdivision Act (P&S) governs development, planning, refurbishment, zoning, and land-use regulations. Under this act, the Department of Physical Planning oversees development matters from minor adjustments to major resort projects. Once approved, the Town Planning Committee oversees development and land use.

In case of new construction or additions and alterations such as adding decks, sheds, retaining walls, and fences, approval for a building permit from the Ministry of Works & Urban Development is necessary. 

This permit ensures compliance with safety standards, covering structural integrity, fire safety, sanitation, and more. It's valid for eighteen months, with the option for an extension if needed.

Finally, be aware of the zoning and environmental restriction regulations to avoid inconvenience later. 

Hiring Local Architects, Contractors, and Engineers

Local architects, contractors, and engineers are crucial for designing and constructing buildings due to their specialised knowledge of the local environment, regulations, and construction methods. Hiring local experts and workforce has its own set of benefits:

Specialised Knowledge:  Architects and engineers in the Bahamas typically have international accreditations and are locally licensed. Moreover, contractors often have civil engineering backgrounds and excel in residential construction due to apprenticeship training.

Understanding of Local Conditions:  They are most familiar with the distinctive environmental factors of the Bahamas, like tropical weather, hurricane risks, and coastal conditions, ensuring that buildings are designed to withstand these challenges.

Compliance with Regulations:  Local professionals are well-versed in Bahamian building codes and local customs, zoning laws, and permit requirements, ensuring that designs meet all regulatory standards and receive necessary approvals.

Connections and Networks:  They already have work relationships with local suppliers, subcontractors, and authorities, streamlining the construction process and ensuring sufficient labour, facilitating efficient project management.

Prior Experience with Island Construction:  Due to their experience in island construction, they can efficiently navigate logistical challenges, transportation issues, and access to materials effectively.

Cultural Sensitivity:  They understand the cultural norms and architectural preferences of The Bahamas, which ensures that building designs resonate well with the local community. Such properties blend seamlessly into the island landscape.

Investment Opportunities For Property Owners

The Bahamas is a prime destination for property investment, especially for international buyers, owing to its inviting property ownership regulations. Renowned for its stable economy and robust tourism industry, the Bahamian real estate market consistently sets bars as the top choice in the Caribbean. 

Global Property Guides (GPG) has consistently ranked it No. 1 among long-term real estate investment destinations, reinforcing its status as a lucrative and secure market for investors.

Owning a vacation home in The Bahamas can help you save on hotel expenses when you visit the country, earn rental income, and sell it for profit due to the value appreciation over the years. 

The ROI of your property depends on its location and type. Notably, rental income can be a significant source of revenue in touristic destinations like Nassau, Paradise Island, and other family islands. These areas attract visitors year-round, creating a high demand for vacation rentals and short-term accommodations.

For example, in Nassau, Windsor Lake, rental rates are expected to start from $3,200 monthly for townhomes and $6,000 to $10,000 for homes. Likewise, new marina units at Palm Cay may rent for $10,000 or more. 

Similarly, in Sandyport, small two-bedroom rentals cost $3,500 a month, while a luxurious canal-front home in Sandyport may cost around $10,000.

Goldwynn Phase 2, an opulent beachfront community, is a single-bedroom rental at $4,500 per month with a price tag of $750,000 for a one-bedroom unit, and two-bedroom units reaching up to $1 million.

However, small islands offer a peaceful lifestyle and lucrative ROI. In Cat Island, communities like Pigeon Cay, Hawks Nest, Greenwood, and Fernandez Bay offer a secluded getaway but without gated communities or high-end amenities. 

Moreover, communities like Tar Bay, Tropic of Cancer Beach, Emerald Bay, Rolleville, Rolletown, and George Town within Exuma Cays are popular for short-term rentals. 

Lastly, commercial investment opportunities abound in bustling commercial districts such as downtown Nassau and Freeport and in Eleuthera, Exuma Cays, Abaco, Long Island and others where businesses thrive due to the steady flow of tourists and locals. The lowest-priced around $65.000 to a whopping $90,000,000

Additionally, areas undergoing revitalization, such as the historic downtown districts, offer potential for long-term commercial growth and investment.

Owning property in The Bahamas offers more than just a piece of real estate; it's an invitation to a lifestyle of luxury, relaxation, and adventure. With its straightforward buying process, tax advantages, and potential for high returns, The Bahamas appeals to investors, vacationers, expats, and retirees alike. For expert guidance and assistance in finding your perfect Bahamian property, contact ERA Dupuch Real Estate today and start your journey to paradise.

Posted by Helen Dupuch on
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