Post Taxes to Pay in the Bahamas

The Bahamas, with its white sandy beaches and crystal-clear waters, attract many real estate investors. In addition to the natural beauty, one of the major advantages of real estate investment in this archipelago is its attractive tax system. However, it is essential to understand the different fees and taxes to be paid, whether in the context of a real estate purchase or other transactions. Here is a comprehensive overview.

1. Property Taxes

Stamp Duty

The stamp duty, also known as "Transfer Tax," is a mandatory tax when purchasing a property in The Bahamas. It is typically split equally between the buyer and the seller, unless otherwise agreed upon in the sales contract. Here are the applicable rates:

• Effective July 2019: the rate is set at 10% of the transaction value.
• The first $100,000 USD for the purchase of a primary residence may be exempt under certain conditions.

Legal Fees

Purchasing a property in The Bahamas requires the services of a lawyer for title verification and contract drafting. Legal fees typically range between 2% and 3% of the purchase price.

Land Registration Fees

Land title registration is a mandatory step, and this cost is included in the stamp duty fees. No separate additional fees are required for this process.

Annual Property Taxes

The Bahamas do not impose income, wealth, or capital gains taxes. However, there is an annual property tax called "Real Property Tax," calculated as follows:

• Exemption: The first $250,000 USD of property value is exempt for a primary residence.
• Between $250,001 USD and $500,000 USD: rate of 0.625%.
• Above $500,000 USD: rate of 1%.

For properties intended for commercial or non-residential use, the rates differ and can go up to 2%.

Other Fees to Consider

• Real Estate Agency Fees: Typically, agency fees are 6% for residential properties and 10% for vacant land.
• Insurance: While not a tax, hurricane and other weather-related insurance are essential, especially in The Bahamas.

2. General Taxes in The Bahamas

Income Taxes

The Bahamas is known for its lack of income tax. This means that residents, whether local or foreign, do not pay any personal income tax.

Business Taxes

Businesses registered in The Bahamas are not subject to corporate income tax or similar taxes. This makes The Bahamas very attractive to international investors looking to expand their commercial activities.

VAT (Value-Added Tax)

Introduced in 2015, VAT applies to most goods and services in The Bahamas. The general rate is currently 10%, although some products and services are exempt or subject to reduced rates.

Customs Duties

Customs duties are significant in The Bahamas due to the absence of certain traditional taxes. Duty rates range from 0% to 45%, depending on the imported items. Vehicles, for example, are subject to substantial duties, as are appliances and other durable goods.

Environmental Taxes

Some environmental taxes apply to specific products, such as batteries and tires, to fund recycling and conservation initiatives.

Licensing Fees

Local and foreign businesses must pay an annual license to operate in The Bahamas. The cost of the license depends on the nature and size of the business.

3. Tax Benefits for Foreign Investors

The Bahamas offer several tax incentives to attract international investors. Among them:

• No capital gains tax.
• No VAT or similar tax on rental income.
• Possibility of obtaining permanent residence for any real estate purchase of at least $750,000 USD.
• Stable and predictable tax system.

Purchasing real estate in The Bahamas and engaging in economic activities in the country can offer significant opportunities due to an attractive tax framework. However, it is advisable to work with local experts—lawyers, real estate agents, and tax advisors—to ensure a compliant and tax-optimized transaction.

Contact us for more information and assistance in your real estate or economic project in The Bahamas!