Who doesn’t dream of picking up and moving to The Bahamas? With turquoise blue waters, and sandy white beaches, it is truly a living post card. It does not have to be simply a dream however, owning real estate in The Bahamas does not have to be out of reach, there is a property for every budget.
On top of buying a property however, there are a lot of things you need to know, including all of the expenses that go along with buying your Bahamian dream home. Let’s take a look at the most common questions people have about buying in The Bahamas.
How much is the Stamp Duty in The Bahamas?
Stamp duty is a government tax you pay when purchasing a property in many Caribbean countries, Bahamas included. This one time tax is payable upfront, and is 10% of the purchase price (on purchases over 100k US). The good news about the stamp duty in the Bahamas versus other Caribbean destinations, is the stamp duty is usually split between the buyer and seller. The downside to this however, is the cost of selling your home is 5% higher as you need to split this stamp duty with the new buyer.
Stamp duty is often charged in lieu of property taxes, however in The Bahamas there are yearly property taxes payable as well.
Property Taxes in The Bahamas
The amount of property taxes you pay, depends on the type of home you own. If you are living in the property and it is your principal residence, your taxes will be less than if it is a rental or vacation property. Here is the breakdown of the local property taxes:
Principal Residences
- The first $250,000 is tax exempt
- $250,000 to $500,000 is 0.625%
- $500,000 to $5,000,000 is 1%
- Over $5,000,000 is ½%
Other Properties
- First $500,000 is 1%
- Over $500,000 is 2%
Some exemptions may exist for your situation, talking to a lawyer may help you save on your yearly property taxes. A quality realtor is also important when purchasing.
Legal Fees for Property Purchases
Legal fees are quite costly in The Bahamas compared to North American standards. We won’t get into the costs as everyone’s situation is different depending on whether they are financing the property or paying cash. We recommend shopping around, or speaking with your agent for the best place to find a solicitor.
Selling Your Bahamian Property
Although it seems early to be thinking about selling the property you haven’t even purchased yet, it is a good idea to know what you are signing up for in advance. Real estate commissions are 6% of the sale price on improved property, and 10% on raw land. And as mentioned above, the stamp duty is usually half paid by the seller, meaning you have another 5% of costs on closing.
In summary, owning a piece of paradise is not an inexpensive venture. Educate yourself about the costs going in, so you are not caught off guard by the sticker shock of buying a slice of The Bahamas.
