Bahamas (BS)
An English-speaking Caribbean archipelago close to Florida, known for high-end tourism, no personal income tax, strong financial services, second-home communities, turquoise water and very high island living costs.
Buying Property in Bahamas
The full buying process, transaction costs, mortgage, and legal requirements.
Foreign nationals can buy property in the Bahamas but are subject to the International Persons Landholding Act (IPLA). The rules depend on property type and intended use. For a single-family residential property, no prior government permit is required — the buyer simply registers the acquisition with the Bahamas Investment Authority (BIA) after closing (registration fee BSD 250). A permit (fee BSD 500) is required for: undeveloped land of 5 acres or more, any property not intended for use as a private residence, or commercial real estate. The Bahamian dollar (BSD) is pegged 1:1 to the US dollar. Foreign buyers pay a flat 10% VAT on the property conveyance, regardless of value, compared to a graduated scale (2.5%–10%) for Bahamian citizens. As of July 2024 and July 2025, the IPLA was amended to impose 180-day VAT payment deadlines after permit grant and automatic permit extensions.
Rent vs. Buy
The Bahamas property market is highly polarised: Nassau/Paradise Island and the Family Islands each have distinct price levels, hurricane exposure, insurance costs, and rental yield dynamics. Renting first is strongly advisable unless you already know the specific island, building, and community well. Hurricane insurance for non-owner-occupied property is expensive and premiums vary significantly by island and construction type. Transaction costs for foreign buyers (VAT + legal fees + registration) can reach 12–15% of purchase price, making the breakeven period long. For buyers seeking residency, property investment above certain value thresholds can qualify for the Haitian government's annual residence permit programme.
Buying Process — Step by Step
Engage an independent Bahamian attorney before making any offer
Before offer or depositThis is the most critical step. Your Bahamian attorney will conduct title due diligence, confirm whether a permit or registration is needed under the IPLA, check Real Property Tax (RPT) assessment numbers and tax arrears, verify there are no outstanding liens, and advise on closing costs. Do not pay any deposit before your attorney has reviewed the title.
Determine IPLA permit or registration requirement
Permit applications: 4–8 weeks; registration is post-closingFor a single-family residential property: post-closing registration with the BIA (BSD 250) is sufficient — no pre-approval needed. For undeveloped land of 5+ acres, non-residential property, or commercial real estate: apply for a BIA permit (BSD 500) before closing. As of July 2025, if a permit is granted but the acquisition is not completed within 180 days, the holder must submit a Permit Extension Notice to the BIA at least 30 days before expiry for an automatic further 180-day extension.
Obtain a VAT invoice from the Department of Inland Revenue (DIR)
Before deed executionUnder the Conveyancing Amendment Act 2025, all parties (buyer, seller, attorneys, and agents) must obtain a VAT invoice from the DIR before executing the conveyance. This step is now legally mandatory and must occur before the deed is signed.
Verify title and Real Property Tax status
2–4 weeksYour attorney conducts a title search to confirm unencumbered ownership and confirms the RPT Assessment Number. No conveyance should proceed without confirming that all prior RPT bills are paid in full; arrears are attached to the property, not just the previous owner.
Agree and sign a Heads of Agreement / Sale and Purchase Agreement
1–3 weeksThe SPA sets out the purchase price, deposit amount, closing date, conditions (such as permit approval), apportionment of VAT/closing costs, and any inventory included. A deposit of 10% of the purchase price is typically held in escrow by your attorney.
Pay VAT on conveyance and execute the deed
At closingForeign buyers pay a flat 10% VAT on the property transfer value. In practice, buyers and sellers often negotiate a 50/50 split of the total VAT, making the buyer's effective cost 5%. However, this is negotiable and the full 10% may be contractually the buyer's responsibility. VAT must be paid and a DIR invoice obtained before the deed is executed.
Record the conveyance and register with BIA
2–6 weeks post-closingYour attorney records the executed conveyance at the Registrar General's Department to establish a clear chain of title. For residential property not requiring a prior permit, file the registration notice with the BIA within the required period. Update Real Property Tax records, property insurance, and utility accounts.
Transaction Costs
| Cost Item | Amount | Notes |
|---|---|---|
| VAT on conveyance — foreign buyer | Flat 10% of purchase price (Bahamian citizens: graduated 2.5%–10%) | Buyer and seller often split the total 10% VAT 50/50 by negotiation, making each party's share 5%. Confirm the split in the SPA. A DIR VAT invoice must be obtained before deed execution (Conveyancing Amendment Act 2025). |
| Attorney legal fees | Typically 1–2.5% of purchase price, or a fixed fee | Use independent Bahamian counsel. Attorney fees are subject to 10% VAT. |
| Real estate agent commission | Typically 6% of purchase price for improved property (higher for vacant land), plus 10% VAT | Commission is typically paid by the seller, but is effectively priced into the transaction. |
| IPLA registration (residential, no permit needed) | BSD 250 | Post-closing registration with the Bahamas Investment Authority for single-family residential purchases. |
| IPLA permit (undeveloped land 5+ acres or commercial) | BSD 500 | Required before closing for non-residential or larger undeveloped land purchases. |
| Real Property Tax (annual, owner-occupied) | Zero on first BSD 300,000; 0.625% on BSD 300,001–500,000; 1% above BSD 500,000 (capped at BSD 150,000/year) | Annual deadline December 31; 10% discount if paid by March 31. Bahamian citizens who occupy their home as a primary residence qualify for the owner-occupied rate. |
| Real Property Tax (annual, non-owner-occupied / rental / foreign-owned) | 0.75% on first BSD 500,000; 1% on BSD 500,001–2,000,000; 1.5% above BSD 2,000,000 | Non-owner-occupied and investment properties pay higher rates under the RPT Amendment Act No. 43 of 2025. |
| Hurricane / property insurance | High and risk-dependent — budget 1.5–3%+ of property value annually | Named-storm deductibles can be 2–5% of insured value. Required by most lenders and essential for all Bahamas properties. |
| Total transaction cost estimate | Approximately 10–15% of purchase price for a foreign buyer | Dominated by the 10% VAT on conveyance. Factor this into your total cash budget. |
The Notary — Mandatory for All Purchases
The Bahamas operates under English common law. There is no civil-law notary role in Bahamian property conveyancing. All property transfers are handled by Bahamian attorneys who conduct title searches, draft and review the sale agreement and deed, manage escrow, coordinate VAT payment, and register the conveyance. Both buyer and seller are strongly advised to appoint their own independent Bahamian attorney — sharing an attorney creates conflicts of interest.
Mortgage
Local Bahamas bank financing is available for foreign buyers, but non-residents typically face tighter terms: higher deposits, extensive know-your-customer (KYC) and source-of-funds documentation, and scrutiny of property type, rental use, and hurricane insurance. Interest rates are typically pegged to or track US dollar rates given the BSD/USD peg. Mortgage terms of up to 25–30 years are available for qualifying buyers. Private banking facilities are sometimes used for high-value acquisitions.
Typically 30–50% of purchase price for non-resident foreign buyers. Some lenders require higher deposits for vacation/rental properties.
All lenders require full KYC, source-of-funds documentation, proof of income, and evidence of hurricane insurance coverage. Non-residents with entirely foreign income face the most scrutiny. Property must clear all Real Property Tax arrears before a mortgage will be issued. Some buyers use international private banks or US lenders for cross-collateralised financing rather than local Bahamian bank mortgages.
Land Registry
Deeds and conveyances are recorded at the Registrar General's Department in Nassau, which maintains the public record of property ownership. Your attorney will record the deed after closing to establish a clear chain of title. Real Property Tax records and assessment numbers are held by the Department of Inland Revenue (DIR) at inlandrevenue.finance.gov.bs. Always confirm the RPT Assessment Number and verify that all tax arrears are cleared before closing — unpaid RPT attaches to the property.
Taxes
VAT on conveyance: 10% flat rate for foreign buyers (paid on the transfer); see costs section for annual Real Property Tax rates. No capital gains tax in the Bahamas. No personal income tax in the Bahamas. Rental income from Bahamas property may be subject to a business licence (if operating commercially) and VAT on rental services at 10%. US citizens and permanent residents must report Bahamas property and rental income on US federal tax returns regardless of Bahamian tax obligations — consult a US tax advisor.
New Build vs. Existing Property
New builds must comply with current Bahamas Building Code hurricane-resistance requirements; verify the construction standard (wind rating, roof attachment, impact glazing) and confirm all permits were obtained. New construction carries contractor and completion risk — use an escrow payment structure tied to completion milestones. Existing properties require a professional inspection covering: roof condition and age, hurricane shutters or impact windows, seawall condition (coastal properties), flood risk, mould, termite damage, generator provision, and cistern or water supply. HVAC and pool equipment are significant ongoing cost items.
Selling Property
Sellers pay the real estate agent commission (~6% + 10% VAT). VAT on the conveyance is negotiated in the SPA (often split with the buyer). Sellers must ensure all Real Property Tax arrears are paid in full and must provide clear title documentation. Foreign sellers repatriating proceeds should plan for bank source-of-funds documentation. No capital gains tax applies in the Bahamas on property sales.
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