Buying or selling in Palm Cay and wondering what you will actually owe at closing? You are not alone. Between VAT, legal fees, community charges and administrative steps, the numbers can feel opaque. This guide breaks down what’s typical in Palm Cay, who usually pays what, and the timing you should expect so you can plan with confidence. Let’s dive in.
What closing costs cover in Palm Cay
When you close on a Palm Cay property, your total costs usually include:
- VAT on the property transfer (conveyance VAT)
- Legal fees for buyer and seller, plus VAT on services
- Brokerage commission and VAT on services
- Mortgage duty and lender-related charges (if financing)
- Registry, recording and search fees
- Palm Cay HOA balances, any transfer or processing fees, and utility prorations
- Permits and validation steps for non-Bahamian buyers
VAT on property transfers
How VAT works
Conveyance VAT is the largest variable closing cost in The Bahamas. For Bahamian individuals, the rate follows a sliding scale from 2.5% up to 10%, based on the property value. Many transfers to non-Bahamians and most companies are charged 10%. You can review current rules and legal guidance on the Department of Inland Revenue’s VAT pages under the supply of real property guidance. See the Value Added Tax legal resources for details on rates and administration at the Department of Inland Revenue’s VAT legal page: VAT legal guidance for real property.
Market practice often sees buyer and seller splitting conveyance VAT 50/50, but this is negotiable. Your sales agreement should state exactly who pays what. Qualifying Bahamian first-time buyers may apply for VAT relief; start early and follow the Department of Inland Revenue’s required process for documents and approvals: First Home Exemption and zero-rating.
When VAT is paid
Your attorney will obtain a VAT invoice through the Department of Inland Revenue’s VAT stamp process. Payment must occur within the statutory timeframes set by recent amendments, and conveyances must be recorded promptly after completion. For current steps and timing, review the VAT stamp portal: DIR VAT stamp and invoicing.
Other government charges
Mortgage duty and recordings
If you are financing, expect stamp duty on the mortgage instrument, commonly around 1% of the mortgage amount. You will also see per-page recording fees, title searches and other registry charges. These disbursements vary by file and document count; your attorney will itemize them. For context on typical searches and lender requirements, see this overview of title-related services: Title, recording and search fees overview.
Real property tax adjustments
Real property tax is annual, not a one-time closing cost, but it must be current for settlement. Buyers and sellers typically prorate the current year’s tax at closing if needed, and sellers clear any outstanding balances. To understand assessment categories and rate bands, review the Department of Inland Revenue’s guidance: Real Property Tax overview.
Professional fees you should expect
Legal fees
Each party usually pays their own attorney. Many local practitioners quote fees around 2.5% of the purchase price for a conveyance, though rates are negotiable and depend on value and complexity. Legal services attract standard VAT, which will appear on your attorney’s invoice.
Brokerage commission
In residential sales, the seller typically pays the brokerage commission. Market norms often range around 6% for improved residential property and 10% for vacant land. Brokerage services are subject to VAT, which will be added to the commission invoice.
Other third-party costs
Depending on the property and lender, you may also need a survey, appraisal, insurance binders, bank application or processing fees, and courier charges. Ask for quotes early so your estimates are complete.
Palm Cay specifics to review
HOA statements and transfer procedures
Palm Cay is a gated, managed community with HOA dues and a Members Beach Club. Before closing, request a written ledger from Palm Cay management confirming any outstanding HOA balances, special assessments, and any resale or transfer processing fees. If you are new to the community, management can outline current membership and access procedures; start with the development’s published FAQs: Palm Cay FAQs.
Marina slips and separate transfers
Palm Cay’s marina is reserved for owners, and slips follow community rules. If your purchase includes a marina slip, confirm whether it transfers with the residence or requires separate documents and fees. Review current owner and slip information here: Palm Cay marina rates and details.
Membership and capital levies
Some amenitized communities levy a one-time transfer, initiation, or enhancement fee on resales. Palm Cay does not publish a single, fixed transfer percentage. Management will confirm any applicable administrative charges in writing during your contract period, so build that request into your due diligence.
Non-Bahamian buyers: permits and sequence
Non-Bahamian purchasers typically apply for a Permit to Acquire under the International Persons Landholding Act. Your attorney will prepare the application and advise on timing relative to closing. You can review the statutory route through the government services portal here: Permit to Acquire overview. For a broader legal view on process and recent amendments affecting conveyances, you can also consult this comparative guide from a leading Bahamian law firm: Real estate comparative guide.
Timeline and documents
- Contract and allocation: Your agreement should clearly state who pays conveyance VAT, commission and HOA items.
- Applications: File for any First Home VAT relief if eligible and prepare any non-Bahamian permit applications early. See the First Home Exemption guidance and the permit overview.
- VAT invoice: Your attorney submits the conveyance for a VAT invoice via the DIR portal and arranges payment within the required window. See the VAT stamp process.
- Settlement: Palm Cay management issues the HOA/club ledger and any transfer or processing instructions, then funds and documents are exchanged.
- Recording: Documents are lodged for recording and your attorney delivers final copies after the Registry completes registration.
Quick checklists
Buyer checklist
- Confirm your VAT rate and whether you qualify for First Home relief.
- Get written quotes for legal fees, mortgage duty, and third-party costs.
- Ask Palm Cay management for an HOA ledger and any transfer or initiation requirements.
- Verify if a marina slip is included and how it transfers.
- If non-Bahamian, prepare your permit application package early.
Seller checklist
- Decide how VAT and commission will be allocated in the contract.
- Clear any outstanding real property tax and HOA balances.
- Provide recent utility bills for prorations and proof of paid assessments.
- If a marina slip is included, assemble all related ownership documents.
- Coordinate closing and recording timelines with your attorney.
A smooth Palm Cay closing starts with clarity. If you want a tailored estimate and a closing plan that aligns with your goals, connect with our team for concierge guidance from offer to keys. For private assistance, reach out to Ryan Knowles.
FAQs
Who pays VAT on a Palm Cay sale?
- Market practice often splits conveyance VAT between buyer and seller, but it is negotiable and should be stated clearly in your contract.
What VAT rate applies to non-Bahamians buying in Palm Cay?
- Many transfers to non-Bahamians and most companies are charged 10% VAT on the conveyance; confirm specifics for your transaction at the Department of Inland Revenue’s VAT legal page.
Do legal and agent fees also have VAT in The Bahamas?
- Yes. Professional services like legal fees and brokerage commissions attract standard VAT, which your providers add to their invoices.
How are HOA dues handled at a Palm Cay closing?
- Management issues a ledger; you will prorate dues at settlement and pay any outstanding balances. Ask early about any transfer or processing fees using Palm Cay’s FAQ.
When do I receive the VAT invoice and how long do I have to pay?
- Your attorney obtains a VAT invoice via the DIR VAT stamp portal, and payment must occur within statutory timelines set by recent amendments; see the VAT stamp process for current steps.
