VAT, Property Taxes, Legal Fees and Commission
Costs of Real Estate Ownership in The Bahamas
Here's what you need to know about the various costs associated with purchasing real estate in The Bahamas.
Government VAT (Value Added Tax)
On Property Conveyances
This is a tax imposed by the government on the stamping of the conveyance each time a property changes ownership.
As of July 1, 2022 The following rates* came into effect:
2.5% VAT on all property transactions under $100,000
4% VAT on all property transactions valued at more than $100,000 but less than $300,000
6% VAT on all property transactions valued at more than $300,000 but less than $500,000
8% VAT on all property transactions valued at more than $500,000 but less than $700,000
9% VAT on all property transactions valued at more than $700,000 but less than $1,000,000
10% VAT on all property transactions valued at more than $1,000,000
Bahamian First-Time Home Buyers are eligible for the following rates:
4% VAT on a property transaction valued at more than $300,000 but less than $500,000
0% VAT on a property transaction valued at under $300,000
Property purchased in a company name will attract 10% VAT no matter the sale value.
Usually, the VAT charge is split between the buyer & seller unless otherwise agreed upon.
On Real Estate Services
10% VAT is charged on all real estate services (commissions, appraisals, legal work, and insurance).
*All rates are subject to change
Real Property Taxes
Real Property Taxes are imposed by the government, and charged annually, in December, based upon the current market value of your home. If the Real Property Taxes are paid in full before March 31 each year, a 10% discount is applied.
Current Real Property Tax Rates*
Owner-Occupied Property:
EXEMPT- Property of which the market value is less than $300,000
0.625% - Property of which the market value is more than $300,000 but less than $500,000
1% - Property of which the market value is more than $500,000
Ceiling for properties of which the market value is over $6,000,000 - $120,000 per annum
Unimproved Property:
$100 Tax - On first $7,000 of market value
2% - Properties with market value over $7,000
Bahamian citizens are exempt from real property taxes on unimproved property.
Commercial Property:
0.75% - Property of which the market value is less than $500,000
1% - Property of which the market value is more than $500,000 but less than $2,000,000
1.5% - Property of which the market value is over $2,000,000
Any Other Property:
1% - On first $500,000 of market value
2% - Properties with market value over $500,000
*All rates are subject to change
Real Property Tax Exemptions
The following properties are exempt from Real Property Taxes:
- First $300,000 of Owner-occupied property
- Unimproved property owned by Bahamians
- Property on the Family Islands owned by Bahamians- Religious Institutions
- Non-Profit Organizations
- School Buildings
- Crown land
- Property used for commercial farming
- Property of the National Trust
- Property owned by foreign governments for use exclusively as consular offices or as residences for its employees
- Property owned by a Commonwealth country which is being held for carrying out functions analogous to consular functions
Legal Fees
Buyers & Sellers both need representation by a Bahamian Attorney. Each party is responsible for their own attorney fees.
Legal fees usually average around 2.5% of the purchase price and is subject to 10% VAT.
Bahamas Real Estate Commissions
The Bahamas Real Estate Association's standard commission rates are:
10% of the sales price on Vacant Land
10% of the sales price on Businesses
6% of the sales price on Improved, Developed Property
6% of the sales price on Commercial property or Buildings
The commission is typically paid by the seller in a transaction and is subject to 10% VAT.