A Complete Guide to Real Estate in The Bahamas

Previous Project: Old Fort Bay, Bahamas

The Bahamas has more to offer than stunning white-sand beaches and crystal-clear blue waters. It is a mecca for prime luxury real-estate properties and vacation homes that will take your breath away. Dotted all over the island of New Providence, the nation’s capital boasts of gated communities that cater to the elegance of island living.

Perhaps you’ve been wondering how to go about breaking into the real estate market, or how to purchase a home or build one in one of the exclusive neighborhoods. Not to worry at CMDC we’ve got you covered.

In this quick-fire guide, we’re going to outline what The Bahamas real estate market offers investors and buyers in terms of exciting opportunities for medium to long-term growth and strong rental leads. Let’s dive in.

Why Invest in Bahamas Real Estate?

Our first blog posts defined the top 10 reasons you should invest in The Bahamas and you can read more about that here. The Bahamas government has afforded foreign buyers and investors the ability to acquire free titles to real estate in The Bahamas, be it commercial or residential.

After seeing real estate prices fall by as much as 40% in some areas, The Bahamas has rebounded and is seeing a strong return to form as tourism numbers increase, and buyers are once again attracted to the market’s evergreen offering.

In the past, The Bahamas real estate market was exclusively reserved for the ultra-wealthy. However, breaking into the real estate market has become more accessible than ever thanks to a wide array of development projects, financial opportunities, and new ownership options available to prospective investors.

Additionally, The Bahamas offers an attractive relatively tax-free haven for investors, making it one of the most investor-friendly locations in the world with ownership options available to investors. Because travel and tourism underpin the economic growth and success of The Bahamas; the government allocates support and resources to the sector. Therefore, the tourism sector directly drives the success of the real estate sector. Tourism had a target of increase annually by 3% until 2024 according to World Travel & Tourism Council, but the global pandemic has dampened this growth slightly.

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.

Doing Business in the Bahamas, Real-Estate, and Taxes

In The Bahamas the government allows foreign buyers and investors to own free title to real estate. However, a government is required by non-Bahamian buyers if the real estate in question exceeds 2 acres, or if it is being purchased to let, or if the property will be used for commercial development. A foreign buyer whose purchase is not subject to the aforementioned is required to register their real estate acquisition with the Foreign Investment Board.

Additionally, all foreign buyers must register their investment with the Exchange Control at the Central Bank of The Bahamas. This guarantees that in the event of a future resale, the ability to take net proceeds of any sale out of The Bahamas in the currency of the original investment.

We strongly advise that foreign buyers use the services of a lawyer to ensure the above requirements are fulfilled enabling a smooth real estate transaction. It is well to note that round trip real estate transaction costs are relatively high in the Bahamas. However, these costs are offset by the low tax environment of The Bahamas. Transaction costs can total between 9.1%-25%. Additional fees include stamp duty which is between 4%-10% depending on property value, and realtor fees are either 6% or 10% and are fixed by The Bahamas Real Estate Association.

Buyer’s costs are between 2%-8% at the point of purchase and vendors’ costs are 7.5% and 17.5% at the point of sale. As we mentioned earlier because there are low taxes in The Bahamas it offsets a lot of these costs. There is no income tax, capital gains tax, or inheritance tax.

Rest assured the real estate market in The Bahamas is well established and ripe, and the sales process remains transparent and secure, affording foreign buyers great confidence in the market. A buyer’s attorney will check the validity of a property’s title and check for any encumbrances to the title: a break in the chain of title ownership details or any missing abstracts reduce the marketability of the 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 in any event. 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 are dominated by US interest, with Canadian, British and European interests also well represented.

Visas and Immigration for Property Investment

One of the perks of investing in real estate in The Bahamas is that a foreign buyer has no visa requirement to purchase real estate. Foreigners who own property in The Bahamas are afforded the ability to apply for a Home Owner’s Residence Card which enables them to have unrestricted access to their property throughout the year.

Applications for the Home Owner’s Residence Card must be submitted to the Department of Immigration. There is a non-refundable application fee of $100 per applicant. Upon arrival into the country, a $500 fee is payable for the issuance of the card. The Home Owner’s Residence Card is renewable annually.

Alternatively, anyone wishing to reside in The Bahamas can apply for an annual residence permit or permanent residence permit, and depending on the level of investment it may be included at a fee. 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 $1.5 million in real estate will be eligible for a quick response to their application— within 21 days of submission. Applicants must indicate and confirm that they intend to reside permanently in The Bahamas. The fees associated with permanent residency are hefty, starting at $10,000, however, achieving permanent residency makes having your home here more accessible.

Conclusion

We’ve given you lots to consider when it comes to purchasing or investing in real estate in The Bahamas. And while it may seem a dauntingly long process it can be made easy by simply allowing CMDC to guide you every step of the way.

We are not only a luxury construction company, we also offer services in real estate acquisition, property management, and consultancy.

Contact us today about investing in The Bahamas at info@cmdcompany.co and you can be that much closer to your slice of paradise.