Buying Real Estate in the Bahamas as a Foreign Buyer: Permits, Taxes & Fees
Complete guide for non-Bahamian citizens purchasing residential or commercial property: International Persons Landholding Act rules, VAT, closing costs, and residency incentives.
With its close proximity to North America, stable economy, and absence of personal income or capital gains taxes, The Bahamas has long been an attractive destination for foreign real estate investment. However, non-Bahamian purchasers must comply with specific statutory rules under the International Persons Landholding Act.
1. The International Persons Landholding Act Framework
Foreign buyers are welcome to acquire real estate in The Bahamas; however, the regulatory process depends on the property’s size and intended use:
A. When a Certificate of Registration is Required
A non-Bahamian purchasing property needs only to obtain a Certificate of Registration from the Bahamas Investments Authority (BIA) if:
- The property is an existing single-family residence, condominium, or vacant land of less than two (2) contiguous acres; AND
- The property is purchased solely for personal residential use.
In this scenario, the transaction proceeds to closing first, and the attorney registers the deed with the BIA afterward.
B. When a Government Permit is Mandatory
A foreign buyer must obtain prior approval and a formal Permit from the Investments Board before closing if:
- The property exceeds two (2) contiguous acres in size; OR
- The property is intended for commercial development, hotel, or rental operations; OR
- The property is acquired through shareholding in a company holding Bahamian real estate.
2. Breakdown of Real Estate Closing Costs in The Bahamas
Purchasers should budget approximately 5% to 8% above the purchase price for closing fees:
| Fee / Tax | Rate / Schedule | Standard Allocation |
|---|---|---|
| Value Added Tax (VAT) on Conveyance | Sliding scale: 2.5% (under $100k) up to 10% (over $100k) | Customarily shared 50/50 between Buyer and Seller |
| Legal / Attorney Fees | Customarily 2.5% of purchase price + 10% VAT | Paid independently by each party |
| BIA Registration / Permit Fee | Statutory application fee (approx. US$25 – $1,000) | Paid by Purchaser |
| Real Estate Agent Commission | 6% (improved property) / 10% (vacant land) + VAT | Paid by Seller |
3. Annual Real Property Tax (RPT)
Under the Real Property Tax Act, foreign property owners pay annual real property tax based on assessed market value:
- Owner-Occupied Residential Property: The first $300,000 of value is tax-exempt. Value between $300,000 and $500,000 is taxed at 0.625%, and excess over $500,000 is taxed at 1% (subject to a maximum tax ceiling).
- Vacant Land Owned by Non-Bahamians: Taxed at 2.0% on full assessed market value annually.
4. Permanent Residency Incentives for Property Investors
Foreign purchasers acquiring real estate in The Bahamas valued at US $750,000 or greater are eligible for expedited consideration for Permanent Residency Status (without the right to work) through the Department of Immigration. This status affords the investor and their immediate family the right to reside permanently in the country.
Frequently Asked Questions
Can foreigners buy beachfront property in The Bahamas?
Yes. Non-Bahamians are legally permitted to purchase beachfront and luxury resort real estate, subject to standard BIA registration or permit procedures.
Do I need Exchange Control approval to buy land in The Bahamas?
Yes. Foreign currency investments must be registered with the Central Bank of The Bahamas Exchange Control Department. This guarantees that your original investment and future sale proceeds can be freely repatriated in US Dollars or foreign currency.
Can I rent out my Bahamian vacation home to tourists?
Yes, but foreign owners renting out residential property must obtain a Hotel Licensing Board approval and collect and remit Bahamas Value Added Tax (VAT) on short-term vacation rentals.
Join the discussion on our Community Forum Thread.
Comments