Purchasing a Home in The Bahamas

The Bahamas, which consist of over 700, cover an area of 100,000 square miles stretching in a southeasterly direction from just 50 miles off the coast of Florida to within 50 miles off the coast of Haiti and the Dominican Republic. The Bahamas gained its independence from Great Britain on July 10, 1973 and remains a member of the British Commonwealth.   The Bahamas is also one of the premier offshore financial centres in the world.  This makes The Bahamas the ideal location for expatriates looking to set up offshore business offices and potential vacation-home owners looking for their own “slice” of paradise alike.

Finding a Property

There are a multitude of Real Estate Agents available to assist you with finding the property you desire.  If you are looking for a Real Estate Agent, you may visit the Bahamas Real Estate Association’s website (http://www.bahamasrealestateassociation.com) for a list of licensed realtors within The Bahamas.

Agreement for sale

Once the property has been located and the basic terms and conditions of the sale and purchase have verbally agreed between the parties, a written contract between the vendor and purchaser must be drawn up (the Agreement for Sale). This should be done by a Bahamian Attorney as there are many legal formalities inherent to real estate transactions which can result in complications in the long run if not properly adhered to. Besides the terms and conditions of the purchase, the contract must include a description of the property and the anticipated completion date.   Since real estate transactions in The Bahamas are “caveat emptor” (meaning “may the buyer beware”) it is the purchaser's responsibility to conduct the necessary due diligence with respect to the title to the property to ensure that a) the vendor has the authority to sell the property and b) there are no extraneous factors which may impede the purchaser's ability to deal with the property as he intends.  Upon the execution of the Agreement for Sale, a deposit will typically be paid to the vendor's attorney or to the real estate agent involved (if applicable).  This sum is will be paid in escrow as a deposit and in part payment of the purchase price.  The typical amount for a deposit is 10% of the purchase price.

What are the costs involved in buying or selling property in The Bahamas?

A typical sale, called a "Gross Sale", assumes that the vendor (seller) will be responsible for the payment of:

·         The real estate agent's commission. The commission on the sale of developed property is 6% of the gross sales price. The commission on the sale of undeveloped property is 10%.

·          One half (1/2) of the Government stamp duty (tax on the conveyance of real property). This is a graduated tax. The total amount of the tax is : 
·          Value up to $20,000 the rate is 4% 
·          Value greater than $20,000 and is less than or equal to $50,000, the rate is 6% 
·          Value greater than $50,000 and is less than or equal to $100,000, the rate is 8% 
·          Value is greater than $100,000 and is less than or equal to $250,000, the rate is 10% 
·          Value is greater than $250,000, the rate is 12%

·        The vendor's legal fees. Legal fees on a conveyance of property are usually 2 ½% of the first $500,000, 2% of the next $500,000, 1% of the next $4,000,000 and ½% thereafter.  Certain circumstances may afford an attorney some leeway regarding their legal fees however, any deviation from the standard is solely at that attorney's discretion.

The purchaser will be responsible for:

·     1/2 of the Government stamp duty as set out above,

·     The purchaser's legal fees as detailed above.

·     Recording fees on the conveyance and other closing documents which need to be recorded.

·   Payment of the relevant  fees for a permit or certificate of registration under the International Persons Landholding Act, (if applicable).

The fee for obtaining a permit from the Bahamas Investment Authority under the International Persons Landholding Act is $500.00 and the fee for obtaining a certificate of registration is $250.00.  These fees apply only to non-Bahamians purchasing real estate in The Bahamas.

In the event that the sale is a "Net Sale" the purchaser would be responsible for payment of all of the above mentioned fees (both vendor and purchaser).   This is often done to negotiate a lower purchase price, namely in cases where a purchaser qualifies for exemption from payment of stamp duty as a first-time home buyer.

Completion of the transaction

At completion (closing), a conveyance is executed by the vendor in favour of the purchaser and the balance of the purchase price is paid by the purchaser to the vendor. Other items such as the stamp duty, real property tax, outstanding utility bills, and sales commissions are also settled at the time.  Investors should ensure that the title deeds to any land owned in The Bahamas are recorded in the Registry of Records in Nassau, New Providence. There is a nominal recording fee which is generally $4.50 per page, except in certain circumstances.  Your Bahamian property attorney will advise you of all formalities and will keep you apprised of the status of your transaction.

The Bahamas Real Estate Association

Prospective buyers should take advantage of the knowledge and experience offered by members of The Bahamas Real Estate Association (BREA). Effective from January 1, 1996 all real estate practitioners in The Bahamas are required to hold either a Brokers or Salesman's license. Anyone requiring the services of a realtor should ensure that the realtor is licensed. All licensed Realtors are members of The Bahamas Real Estate Association and as such are part of a network of brokers and salesmen who cooperate fully with one another and abide by a strict code of ethics.  You can get in touch with a Bahamian real estate agent by clicking here.

Disclaimer

While we have made every effort to provide accurate information, the law is always changing and affects each person differently. This information is no substitute for specific advice about you personally and we will not be liable to you if you rely on this information.If you would like more detailed advice you can contact a Bahamian property and conveyancing lawyer by clicking here.

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