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By Ester
Napoli
White sand beaches, clear blue waters, tax breaks, real estate and property;
the Bahamas never looked so good. And yes, I said real estate. Bahamian real
estate is hotter than ever.
In 1993, the International Persons Landholding Act was put into motion to
encourage foreigners to purchase a second home in The Bahamas. And it
couldn’t be simpler. If a foreigner buys a single family dwelling or vacant
land to be used in the construction of such a dwelling, then he no longer
needs to obtain a permit from the Government prior to the purchase. He only
needs to register the acquisition later with the Investments Board. Permanent
residents of the Bahamas and foreigners who inherit property in the Bahamas
don’t have to obtain a permit before acquiring land but must register
afterward.
However, there are cases where a permit will be needed for Bahamas real estate.
First, if the property is undeveloped land and of five acres in size or
larger. Secondly, if the property is not a private residence, or it is not
intended for development as such, a permit is needed.
In dealing with mortgages, the act is not meant to be a road block. In fact,
it provides that licensed banks, trust, and insurance companies who acquire
an interest in or take possession of property under a court order must
register that acquisition. An acquisition by way of foreclosure under a
mortgage or of land acquired by an authorized foreign state will not require
a permit but must be registered.
With leases, foreigners are not required to obtain permits, register leases,
or letting agreements unless they are for trade or business purposes and the
term can exceed 21 years.
Not only has the government made owning a second home easy for foreigners,
they have also included a condition so that a foreigner no longer pays a
double rate of stamp duty; he now pays the same single rate as a Bahamian.
The stamp duty is a tax that is payable on the delivery of all real property
based on the value as follows: Stamp duty starts at 2% for real estate valued
under $20,000 US, but increases to 10% for real estate over $250,000 US.
Payment of this tax is usually 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 for the tax to be shared equally between
buyer and seller unless otherwise agreed upon.
If you are entering the Bahamas, you must fill out an embarkation-
disembarkation card which is usually provided by your travel agent, the
airline, or the ship you are traveling on. A visa and passport is not
required of you if you are a Canadian citizen or subject of the United
Kingdom unless the stay exceeds three weeks. U.S. citizens on regularly
scheduled airlines, pre-cleared for return at U.S Customs and Immigration at
Nassau International Airport also do not require a visa (though proof of
citizenship is required).
You are allowed a maximum stay of eight months with proper documents which
includes a return ticket and evidence of financial support. If you would like
to stay longer, then you have to apply for temporary residency to the
Director of Immigration. If, however, you would like to make the Bahamas your
permanent residence by way of Bahamas property investment, then you will have
to apply for permanent residency. If you plan on working in the Bahamas, a
work permit must be applied for separately.
There are different levels of residency. The first is permanent residence
which requires a purchase of a residence of more than $500,000, subject to a
$10,000 one-time payment. Another level of residence is that of a homeowner
where no minimum purchase is required, however, your card must be renewed
every year for a fee of $1000. And the last level of residence is an annual
residence where, again, no minimum purchase is required but you must renew
every year for a fee of $1000.
Owning Bahamas real estate sounds spectacularly 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 a few guidelines to help you out when buying Bahamas property:
Think location: Depending where you buy, prices will vary. On the main islands
such as New Providence and Grand Bahama, prices are more than double the
prices in Florida. If you’re looking for an investment property, these would
be good choices. If you’re looking into buying a quiet retreat, consider
something on the family islands as they are less expensive.
Have a look: Once you have decided where you would like to buy a property, the
next step is to have a look at more than one property so you can get an
overall picture of the market.
Take a second look: It’s a good idea to get a certified professional to look
over the property just in case there are hidden surprises!
So whether you’re making an investment or buying a vacation home, the Bahamas
will welcome you with open arms. All you have to do is make your ticket to
paradise!
Ester Napoli: They say if you want to be happy, you have to do something you
are passionate about. One of my passions is traveling and the one place I
fell in love with was the Bahamas; the white sand, clear waters, friendly
environment. It is paradise on earth. I enjoy all aspects of the Bahamas; the
culture, the history, the countless sports and activities to keep you busy,
and of course, the fabulous weather.
info@gloriousbahamas.com (mailto:info@gloriousbahamas.com)
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