Aside from the year-round tropical environment, magnificent natural beauty, and laid-back Bahamas lifestyle, the islands also provide the following advantages:
According to the Bahamas Real Estate Guide, the Hotel Development Act may waive the annual tax costs on your February Point home or condo.
For more information, contact your tax advisor.
A: You will receive a fee simple title, which implies that you will become the freeholder of the property after paying the charges and fees.
A: This is a traditional British way of formalizing a receipt. Stamp Duty in the Bahamas ranges from 8% to 12% of the property’s worth, and the amount is split evenly between the seller and the buyer. (At February Point, the buyer’s portion of the Stamp Duty cost is included in the all-inclusive rate.)
A: Budget for annual costs of around 1% of the home’s replacement value (excluding land) plus all items insured.
Can you get homeowners insurance in The Bahamas?
Because we are located in the storm belt, the Bahamas is no stranger to hurricanes. (In fact, as we type this, a Category 1 storm is bearing down on us.) As we prepare for the storm’s arrival, we can’t help but remember the devastation that our brothers and sisters in the Northern Bahamas faced last year with Hurricane Dorian, and the fear that they may be experiencing again as another hurricane approaches the archipelago.
As a result of Hurricane Dorian, 17 percent of citizens in The Bahamas were expected to be homeless after the monster storm damaged their homes, highlighting the need of obtaining home insurance. Home insurance is not required in The Bahamas at the moment. In an interview in February 2020, a Bahamas First executive stressed the need of all homeowners having complete catastrophic insurance coverage.
It’s crucial to remember that while some homeowners have insurance on their homes since it’s a requirement for getting a mortgage loan from a bank, it doesn’t always cover you as a homeowner. (Source: The Nassau Guardian.) According to a January 2020 news story, many homeowners were unable to obtain their insurance reimbursements following Hurricane Dorian because the funds were diverted to banks for debt arrears. Gowon Bowe, a former chairman of the Bahamas Institute of Chartered Accountants, stated in this report that it is critical to keep up with mortgage payments in order to avoid the bank becoming the owner of the house and obtaining the insurance payout.
This article aims to provide you with an overview of various insurance policies and provisions to help you ensure that your home and belongings are sufficiently secured.
How much is a standard homeowners insurance policy?
According to a survey released by the National Association of Insurance Commissioners (NAIC) in 2021, the average cost of homeowners insurance is $1,249 per year, or $104.08 per month.
Your homeowners insurance quote will be determined by factors such as your location, house value, coverage levels, and discounts. The Home Media reviews team discusses these topics in this review and helps you select the best option.
How much is property tax in Bahamas?
Bahamas Realty Limited is a real estate firm that provides a broad range of services. Vacant land, acreage, single-family homes, condominiums, private islands, resort properties, office/retail buildings, shopping complexes, and warehouses are among the properties we sell.
We are the official Bahamas associate for Luxury Portfolio and a member of Who’s Who in Luxury Real Estate and the Leading Real Estate Companies of the World. On the commercial side, we are the only NAI Global member.
Are brokers and sales advisors in The Bahamas licensed?
Yes. The Bahamas Real Estate Association licenses brokers and sales advisors (BREA). A written test is one of the requirements for licensing. Many BREA members are International Members of NAR and hold numerous NAR accreditations such as GRI, CRS, CRB, CIPS, and CCIM. BREA is an international member of The National Association of Realtors (NAR), and many BREA members are International Members of NAR. A few members belong to the International Federation as well (FIABCI). The public is urged to ask for and use only BREA members’ services.
What are the costs involved in buying or selling property?
VAT (Value Added Tax) on real estate transactions is a graduated tax, unlike regular VAT, which is collected and paid at a rate of 10% on the delivery of goods and services. The rate is 2.5 percent if the consideration is worth less than $100,000. When the consideration is valued at $100,000 or more, the rate is 10%.
*Unless otherwise agreed upon, the tax is usually split equally between the buyer and the seller in the Bahamas.
* For the first time On a dwelling house or unoccupied land purchased for a dwelling house, Bahamian buyers may be free from VAT up to $500,000.
Legal Fees Legal fees typically 2.5 percent of the acquisition price, though this can vary.
Commission on Real Estate – 6% on renovated property, 10% on unoccupied land and companies
What is the Rate of Real Property Tax in The Bahamas?
- 0.625 percent on the portion of the market value that exceeds $250,000 but does not exceed $500,000
- 0.75 percent on the portion of the market value that exceeds $75,000 but does not exceed $500,000
How do I go about getting a mortgage?
Mortgages are available from most major banks and life insurance firms to Bahamians, permanent residents, and international investors. It’s a good idea to call your local bank as soon as you decide to buy a house. Your real estate agent can offer you with a list of service providers.
In what form is title to property given?
The great bulk of real estate is sold as a freehold property. There are a few leasehold property exclusions. Crown Land (government-owned) lands are typically leased for agricultural or development uses.
Do I need to engage the services of an attorney when purchasing property?
It is strongly advised that you choose a local attorney. When representing the buyer, the local attorney provides an Opinion on the title to the property in addition to verifying that the title paperwork are correctly drafted and in good order. Because the lawyer is accountable if the purchaser discovers a problem in the title, this Opinion is regarded as equivalent to title insurance. The title opinion is covered by the law firm’s indemnity insurance.
Why should foreign property investors consider buying a home in The Bahamas?
From massive multi-million dollar estate estates to small condominiums or residences, the Bahamas attracts a diverse range of property investors. The Bahamas’ beautiful landscapes, along with a safe investment climate, have produced a desire for investment homes with favorable property returns. The Bahamian way of life is one that attracts visitors back again and again. While keeping the Caribbean’s laidback environment, the communities here have developed to include world-class lifestyle, fitness, epicurean, and social possibilities.
Is it possible for a non-Bahamian to purchase property in The Bahamas?
Yes. If you own a home worth $750,000 or more, you are eligible to apply for Economic Permanent Residency. Applicants with an investment of more than $1.5 million are given priority consideration.
After I purchase a property will I be able to repatriate the proceeds of sale whenever I sell it?
Yes, you can repatriate the entire earnings, including any profits, as long as you register the transaction with the Central Bank’s Exchange Control Department at the time of purchase.
Is it possible as a non-Bahamian to live in the Bahamas?
Yes. You can apply for yearly residency if you own a property worth at least $250,000. Property owners with a $500k property are entitled to seek for permanent residency in the Bahamas. An investment of more than $1.5 million will be given priority consideration for Permanent Residency in the Bahamas.
What taxes do you have in The Bahamas?
To begin with, there is no income tax, capital gains tax, or inheritance tax. With the exception of VAT, there is no sales tax (value added tax).
Customs duties on all items brought into The Bahamas are the government’s primary source of revenue. This tax may be as low as 0% for computers and computer software, as high as 65 percent for all non-hybrid autos, and as high as 220 percent for cigars. The average duty rate is roughly 35 percent. In most cases, the 12 percent VAT is added on top of the duty.
Do I need any special approvals in order to build on a property or to make any changes to an existing structure?
Yes. You’ll need to get approval from the Town Planning Board as well as a Ministry of Works building permit. This is something that a local architect or engineer could help you with.
Are there qualified architects, contractors and engineers available in the islands?
Yes. Most, if not all, architects in the Bahamas have international accreditations and were educated in the United States, Canada, or the United Kingdom. For architects, there is a municipal licensing board. Although the building business is regulated, the license requirements are not nearly as stringent. Civil engineers with international accreditations or certified engineers on staff are all employed by the leading contractors. Many of the smaller contractors are graduates of a reputable apprenticeship program and are quite proficient and experienced at completing home building projects quickly and efficiently. Civil, mechanical, and electrical engineers in the Bahamas, like architects, received their education in other countries and hold international accreditations from other nations, as well as a license from their respective local boards.
May I use the services of a non-resident architect?
Yes, but without a permit, that architect cannot work in the Bahamas. A licensed architect and local engineers must sign off on any building plans submitted to the Town Planning Board and the Ministry of Works. Local customs and processes are essential in getting the project done in any jurisdiction, and it is recommended that you use the services of local professionals.
Why is home insurance so expensive?
Home insurance protects you against the loss or damage of your home and its contents. It’s usually needed by mortgage lenders to preserve the value of your property, but it can also be acquired voluntarily for added peace of mindthough it’s not always cheap.
The cost of homeowners insurance varies by state, but it is on the rise everywhere. According to data from the National Association of Insurance Commissioners, the average monthly premium increased from $830 in 2008 to $1,211 in 2017. In addition to industry-wide price hikes, your house insurance estimates may be high due to your credit, the age and value of your property, the type of construction, location, and exposure to disasters, among other considerations.
Is buying property in the Bahamas a good investment?
There has never been a better moment to invest! The Bahamas is widely regarded as the most stable real estate market in the Caribbean, owing to its favorable property ownership laws for foreigners. Global Property Guides (GPG) has identified it as the best long-term real estate investment.
Interested in learning more about buying Bahamas investment property? To learn more about our knowledgeable local specialists, please contact ERA Dupuch Real Estate online or phone (242) 393 1811.
How long can a US citizen live in the Bahamas?
In The Bahamas, an American citizen can stay for up to eight months without a visa. If they wish to prolong their stay, they must apply for a stay extension with the Immigration Department.
Is it safe to buy property in the Bahamas?
Yes, foreigners can buy property in The Bahamas, and the Bahamas government encourages foreign investment. Foreign buyers are not restricted from purchasing real estate in The Bahamas, and they have the same rights as Bahamians, including the ability to purchase beachfront properties. Except for customers acquiring over 2 acres, purchasing with the goal to rent out the property, or purchasing for commercial development, a license or permit is not necessary, unlike other Caribbean resorts.
Purchasing property in The Bahamas is a reasonably straightforward process that normally entails the following steps:
- We recommend that once you’ve placed an offer on a property and it’s been accepted, you consult with a local lawyer to confirm that all title documents are in order.
- A sales contract will be drawn up, and you will be required to pay a 10% deposit once it has been agreed upon and signed.
- Buyer must transfer the remaining purchase money and pay all applicable taxes.
- Non-Bahamians should register their investment with the Central Bank of The Bahamas’ Exchange Control Department to ensure that, upon resale, the net proceeds of the sale can be remitted outside The Bahamas in the currency of the original investment.
Stamp Duty
In order to purchase real estate in The Bahamas, buyers must pay Stamp Duty, which varies depending on the property’s value:
Real estate services, including as appraisals, legal services, commissions, and insurance, are subject to a 12 percent VAT (Value Added Tax).
Real Property Tax
Property owners are required to pay an annual Real Property Tax, which is calculated based on the property’s valuation.
Property owned by Bahamians in the Family Islands, as well as property owned by foreign governments, are free from the Real Property Tax.
Is homeowners insurance based on property value?
#3 The cost of your homeowners insurance is determined by the insurance provider, not your agent. The crucial thing to remember is that you are insuring your home based on the cost of rebuilding the structure of your home, not on the market price, your mortgage, or the worth of your property.
Do I pay homeowners insurance at closing?
Your lender will normally ask you to pay your first yearly homeowners insurance premium before or at closing if you’re getting a mortgage on the house you’re buying. This is done by the lender to protect their own investment. You can pay for your house insurance in advance with or without an escrow account.
What is the average home insurance cost in Florida?
In Florida, the average annual cost of homeowners insurance for a home with $250,000 in dwelling coverage is $1,353. Depending on your proximity to the ocean, the average rate in your area may vary dramatically. Homes near Florida’s Atlantic and Gulf coasts, for example, have a higher risk of wind damage from tropical hurricanes, making them more expensive to insure. Because the danger of a major loss is higher in coastal areas, the average cost may be much higher in certain ZIP codes.
Your Florida insurance premium is influenced by a number of things. If you reside in a hurricane-prone area, for example, you might expect to pay much more. In 2018, Hurricane Michael, a category 5 catastrophic hurricane, hit the Florida Panhandle, causing $7.4 billion in insured damages. The location of your home may have the most impact on your property insurance rate and standard coverage options. Your premium is also affected by your age, gender, marital status, credit-based insurance score, and claims history.