In 1993, the International Persons Landholding Act was put in place to encourage foreigners to buy second homes in the Bahamas. And it couldn’t be simpler. If a foreigner purchases a single-family house or vacant land to be used in the construction of such a dwelling, he no longer needs to obtain a permit from the government before the purchase. All he has to do is subsequently register the acquisition with the Investments Board. Permanent residents of the Bahamas and foreigners who inherit property in the Bahamas do not need to obtain a permit before acquiring land, but must register afterwards.
However, there are instances where a permit will be required for real estate in the Bahamas. First, if the property is undeveloped land and five acres or more in size. Second, if the property is not a private residence, or is not intended to be developed as such, a permit is required.
When it comes to mortgages, the law is not meant to be a roadblock. In fact, it provides that licensed banks, trusts and insurance companies that acquire an interest or take possession of property pursuant to a court order must register that acquisition. An acquisition by way of foreclosure under a mortgage or land acquired by a permitted foreign state will not require a permit but must be registered.
With leases, foreigners are not required to obtain permits, register leases or rental agreements unless they are for business or commercial purposes and the term may exceed 21 years.
Not only did the government make it easier for foreigners to own a second home, but it also included a condition that a foreigner no longer pay a double rate of stamp duty; he now pays the same flat rate as a Bahamian.
Stamp duty is a tax payable on the delivery of all real estate based on the following value: stamp duty starts at 2% for real estate valued under $20,000 but increases to 10% for properties over $250,000. The payment of this tax is generally shared equally between the seller and the buyer. There is also a 1% stamp duty on mortgages paid by the borrower. The usual practice in the Bahamas is that the tax is shared equally between buyer and seller, unless otherwise agreed.
If you enter the Bahamas, you must complete an embarkation-disembarkation card which is usually provided by your travel agency, the airline or the ship on which you are traveling. A visa and passport are not required if you are a Canadian citizen or subject of the United Kingdom, unless the stay exceeds three weeks. U.S. citizens on scheduled airlines, pre-cleared for return through U.S. Customs and Immigration at Nassau International Airport also do not require a visa (although proof of citizenship is required) .
You are entitled to a maximum stay of eight months with appropriate documentation including a return ticket and proof of financial support. If you wish to stay longer, you must apply for temporary residence with the director of immigration. If, however, you wish to make the Bahamas your permanent residence through a Bahamas property investment, then you will need to apply for permanent residence. If you plan to work in the Bahamas, a work permit must be applied for separately.
There are different levels of residency. The first is permanent residence which requires the purchase of a residence for more than $500,000, subject to a one-time payment of $10,000. Another level of residency is that of an owner occupied where no minimum purchase is required, however, your card must be renewed each year for a fee of $1,000. And the final tier of residency is an annual residency where, again, no minimum purchase is required but you must renew each year for a $1,000 fee.
Owning real estate in the Bahamas sounds incredibly easy and that’s because it is. But there are some things to keep in mind when making an investment of this size. Here are some guidelines to help you when buying property in the Bahamas:
-Consider location: Depending on where you buy, prices vary. On the main islands such as New Providence and Grand Bahama, prices are more than double the prices in Florida. If you are looking for an investment property, these would be good choices. If you are thinking of buying a quiet retreat, consider something on the family islands as they are cheaper.
-Take a look: Once you have decided where you want to buy a property, the next step is to take a look at more than one property to get an overview of the market .
-Take a second look: it’s a good idea to have the property inspected by a certified professional in case there are any hidden surprises!
Whether you are making an investment or buying a vacation home, the Bahamas will welcome you with open arms. All you have to do is prepare your ticket to paradise!