In 1993, the Land Acquisition of International Persons Act was put into place to encourage foreigners to buy a second home in the Bahamas. It couldn’t be simpler. If a foreigner purchases a single-family dwelling or vacant land to use in the construction of such a dwelling, he or she will no longer need to obtain a permit from the government prior to purchase. He only needs to register the acquisition later with the Board of Investments. Permanent residents of the Bahamas and foreigners who inherit property in The Bahamas do not have to obtain a permit before acquiring the land but must register afterward.
However, there are instances where a permit will be required to acquire real estate in the Bahamas. First, if the property is undeveloped land of five acres or larger. Secondly, if the property is not a private residence, or is not intended for development as such, a permit is required.
In dealing with mortgages, a deed is not meant to be a roadblock. In fact, it states that licensed banks, credit and insurance companies that acquire or otherwise acquire an interest in property under a court order must register such acquisition. Acquisition by foreclosure under a mortgage or land acquired by an authorized foreign country will not require a permit but must be registered.
With leases, foreigners are not required to obtain permits or register leases or leases unless they are for business or commercial purposes and the term can exceed 21 years.
Not only has the government made it easy for foreigners to own a second home, but it has also included a requirement that the foreigner not pay a double rate of stamp duty; He now pays the same individual rate as a Bahamian citizen.
Stamp duty is a tax paid on handover of all real property based on value as follows: Stamp duty starts at 2% for properties under $20,000, but increases to 10% for properties over $250,000. This tax is usually paid equally between the seller and the buyer. There is also a 1% stamp duty on mortgages that the borrower pays. The usual practice in the Bahamas is for the tax to be shared equally between the buyer and the seller unless otherwise agreed.
If you are entering the Bahamas, you must fill out an embarkation and disembarkation card which is usually provided by the travel agent, airline or ship you are traveling on. A visa and passport are not required if you are a Canadian citizen or a subject of the United Kingdom unless the stay is more than three weeks. US citizens on regularly scheduled airlines, and precleared for return at US Customs and Immigration at Nassau International Airport, also do not need a visa (although proof of citizenship is required).
You are allowed a maximum stay of eight months with the appropriate documents including a return ticket and proof of financial support. If you wish to stay longer, you must apply for temporary residence to the Director of Immigration. However, if you want to make the Bahamas your permanent residence by investing in real estate in the Bahamas, you will have to apply for permanent residence. If you plan to work in the Bahamas, you must apply for a work permit separately.
There are different levels of accommodation. The first is permanent residence which requires the purchase of a home over $500,000, subject to a one-time payment of $10,000. Another level of residency is the homeowner level where there is no minimum purchase required, however, your card must be renewed each year for a $1,000 fee. And the last level of residency is annual residency where, again, there is no minimum purchase required but you must renew each year for a $1,000 fee.
Owning real estate in the Bahamas seems very easy because it is. But there are a few things to keep in mind when making an investment of this size. Here are some guidelines to help you when buying property in the Bahamas:
-Think about location: Depending on where you buy, prices will vary. On the main islands like New Providence and Grand Bahama, prices are more than twice as high as in Florida. If you are looking for an investment property, these would be good options. If you are thinking of buying a quiet getaway, consider something on the family islands as they are less expensive.
– Take a look: Once you have decided where you want to buy a property, the next step is to look at more than one property so that you can get a comprehensive picture of the market.
– Take a second look: It’s a good idea to get a certified professional to look at the property just in case there are hidden surprises!
So whether you are investing or buying a vacation home, the Bahamas welcomes you with open arms. All you have to do is make your ticket to heaven!