Bahamas Real Estate and Investment Property in The Bahamas
Why Bahamas Real Estate?
Despite being negatively impacted by the global economic downturn the Bahamas has rebounded particularly strongly, and today offers investors many exciting opportunities for medium to long-term growth, and for strong rental yields.
- Foreign buyers are allowed to own free title to real estate in the Bahamas.
- Having seen prices fall by as much as 40% in some centers, the Bahamas is now enjoying a very strong return to form as tourism numbers increase, and buyers are once again attracted to the evergreen offering.
- Once a market almost exclusively reserved for the extremely wealthy, the Bahamas is much more accessible nowadays thanks to a broad range of development projects, financing opportunities, and even ownership options that are available to investors.
- The Bahamas is a tax-attractive, investor-friendly destination, making it even more appealing specifically from an investment perspective.
- Travel and tourism underpins the economic success of the Bahamas; the government understands this, invests in and supports the sector.
- In turn, the tourism sector drives the success of the real estate sector.
- Both tourism and real estate have been enjoying strong growth since the downturn, and analysts predict 2015 to be the year when the entire Caribbean region enjoys renewed confidence and sales levels returning to pre-crisis levels.
- Tourism in the Bahamas is on target to rise annually by in excess of 3% to 2024 according to the World Travel & Tourism Council.
- One of the most common investment approaches is to rent stock to the tourism market. This approach has been greatly enabled with the development of resorts in the Bahamas offering complete packages to investors requiring financing, perhaps fractional ownership, and even full rental and management packages.
- A stable economy, a low-crime environment, international accessibility, a flexible immigration policy and inimitable natural appeal makes the Bahamas one of the most attractive destinations for investment in the world.
Real Estate Investment, Taxes and Doing Business in Bahamas
Please contact us for prices of real estate for sale in Bahamas, as well as current rental rates.
- Foreigner buyers are able to own free title to real estate in the Bahamas.
- A government permit is however required by non-Bahamian buyers if the real estate in question exceeds 2 acres, or if it is being purchased to let, or if it is for commercial development.
- A foreign buyer whose purchase is not subject to the above must register their acquisition with the Foreign Investment Board.
- Furthermore, all foreign buyers should register their investment with the Exchange Control at the Central Bank of The Bahamas. This ensures that in the event of a future resale, they will be able to take net proceeds of any sale out of the Bahamas in the currency of the original investment.
- Buyers are strongly advised to use the services of a lawyer to ensure the above requirements are fulfilled easily, and to enable a smooth real estate transaction.
- Round trip real estate transaction costs are high in the Bahamas, however these are offset by the fact that the Bahamas is a low tax environment.
- The transaction costs can total between 9.1% and 25.5%.
- Stamp duty is between 4% and 10% depending on the value of the property, and realtors’ fees are either 6% or 10% and fixed by The Bahamas Real Estate Association.
- A buyer’s costs are between 2 and 8% at the point of purchase, and a vendor’s are between 7.5 and 17.5% at the point of sale.
- The good news is that there is very little in the way of tax in the Bahamas – there is no income tax, capital gains tax or inheritance tax.
- The real estate market in the Bahamas is mature, and the sales process is transparent and secure, affording buyers great confidence in the market.
- A buyer’s attorney will check the validity of a property’s title and check for encumbrances to the title: a break in the chain of title ownership details or any missing abstracts reduce the marketability of property, therefore the onus is on a vendor to ensure their real estate’s history is comprehensively and accurately documented.
- Whilst the rental market is weighted in a landlord’s favor, most investment purchasers target the short-term tourism market anyway.
- The Bahamian dollar is pegged 1:1 to the US dollar, and the Bahamian economy is very closely linked to the American economy meaning that any positive or negative influences experienced in the US have a direct knock on effect in the Bahamas.
- The investment and foreign owned real estate market across the Bahamas is dominated by US interest, with Canadian, British and European interest also well represented.
Bahamas Property Investment Visa
- A foreign buyer does not require a visa to purchase real estate.
- Those who own property in the Bahamas can apply for a Home Owner’s Residence Card to enable them to have unrestricted access to their property at any time.
- An application for the Home Owner’s Residence Card has to be submitted to the Department of Immigration.
- There is a non-refundable application fee of $100 per applicant. Upon approval a further $500 is payable for the issuance of the card.
- The card is annually renewable.
- Alternatively, anyone wishing to reside in the Bahamas could apply for an annual residence permit, or a permanent residence permit.
- Documents required for an annual residence permit include proving ownership of or a lease for a home for the period applied for, a police record, a return ticket, a medical certificate, a financial reference from a bank, proof of income and testimonials of good character.
- A permanent residence permit is available for financially independent individuals or investors.
- Those who invest over $1.5m in real estate will be eligible for a response to their application within 21 days of submitting an application.
- Applicants must confirm that they intend to reside permanently in The Bahamas. The fees for processing the application start at $10,000.
- Achieving permanent residency can be tax attractive.
[Source: Bahamas Government Website]
Bahamas Real Estate Markets of Interest
Abacos: The Abaco Islands (The Abacos) are in the Northern Bahamas region and are made up of a group of islands and cays that form a 120-mile chain stretching over 650 square miles. The Abacos are popular on the tourism and real estate trail: Great Abaco Island and Little Abaco are considered the ‘mainland’ destination for all the islands.
Marsh Harbour is also popular; it has a lively downtown area and high-end amenities. Investors could also consider Treasure Cay because of its incredible beaches; alternatively Elbow Cay and Green Turtle Cay are appealing because of their beautifully preserved colonial architecture.
Eleuthera: 50 miles east of Nassau, the capital of the Bahamas, lies the 110 mile long island of Eleuthera. With its pink and white sandy beaches and precious reef system the island is a natural tourism hub. Its investment property market is very strong too. Eleuthera embodies everything positive that one associates with the Bahamas – from a stunning climate to miles and miles of breathtaking coastline, from very welcoming locals to a high-end yet relaxed lifestyle.
Exumas: Exuma is a district of the Bahamas consisting of over 360 islands, many of which are much lesser explored than the tourism hotspots such as Grand Bahama and Nassau. Investors looking for untouched Bahamas will find it in these exotic islands.
Grand Bahama: As possibly the best-known island in the Bahamas, unsurprisingly Grand Bahama is home to every conceivable amenity and property type. Real estate available is some of the most sumptuous in the Bahamas: prices reflect the appeal and demand.
Nassau: This is the capital of the Bahamas and it’s located on New Providence, a 21-mile long island which is linked to neighboring Paradise Island by a bridge. Nassau is also the name often given to the whole of New Providence. Together New Providence/Nassau and Paradise Island represent the tourism and investment heart of the Bahamas.
Turks and Caicos: The Turks and Caicos islands lie just outside the Bahamas, but from an investor’s perspective they share many traits with the Bahamian islands, therefore we are including them here.
The Turks and Caicos enjoyed an increase in sales by dollar volume of 287% between 2009 and 2013, and the islands are now almost back to prerecession prices and represent a fantastic opportunity to investors looking for a tax-free environment.
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