| Purchasing property in the Bahamas The beautiful islands of The Bahamas, of which there are over 700, cover an area of 100,000 square miles stretching in a south easterly direction from just 50 miles off the coast of Florida to within 50 miles off the coast of Haiti and the Dominican Republic. The Bahamas gained its independence from Great Britain on July 10, 1973 and remains a member of the British Commonwealth . Real estate legislation Effective January 1, 1994 , The Bahamas introduced new legislation known as The International Persons Landholding Act, 1993 , to encourage and facilitate the purchase of land in The Bahamas by non-Bahamians. The important provisions of this Act, in simplified terms, provide that a non-Bahamian may acquire real property in The Bahamas without the need of a permit- provided the property is no more than 5 acres in size. The purchaser must, however, register the acquisition with the secretary to the Foreign Investments Board. If the property is in excess of 5 acres, the purchaser must apply for a permit from the Board on the requisite form stating the intended use for the land, otherwise, any such acquisition would be null and void in the absence of such a permit. The Act also enables a non-Bahamian who owns and maintains a home in The Bahamas to obtain an annual home owner resident card upon application to the Director of Immigration and payment of the specified fee in the schedule. This card entitles the applicant, his spouse and minor children (if any) to enter and remain in The Bahamas for the duration of the card unless their entry is otherwise barred under the immigration laws.
Real property tax: Taxable Value Owner Occupied Other Property First $100,000 Nil 1.0% Next $400,000 1.0% 1.0% Excess over $500,000 1.5% 2.0%
Listing property for sale Open Listing The owner of a property lists the property with a real estate office, but may also list the property with other real estate offices and/or sell the property him/herself. The real estate office that sells the property receives the agreed sales commission.
Exclusive Listing The owner of a property gives an exclusive listing of the property to a real estate office through a listing agent for a specified period of time and agrees to pay the real estate office the agreed commission regardless of who sells the property. The granting of an exclusive listing provides security to the real estate office to market the property extensively and to offer the property to cooperating real estate offices on an agreed split of the sales commission.
Multiple Listing Service The Bahamas Real Estate Association has recently introduced a Multiple Listing Service ( MLS ). A MLS is a means by which participants in the service make a blanket unilateral offer of sub-agency to other participants. It is a facility for the orderly correlation and dissemination of listing information among the participants. All listings entered in the MLS are exclusive listings to a listing agent. The advantage to the owner is that he/she only ever has to deal with one agent while at the same time knowing that the property is receiving the widest possible exposure. The advantage to the purchaser is that he/she only needs to deal with one agent knowing that the agent has access to a all of the listings in the MLS . Agreement for sale Once the property has been located and the terms and conditions of its purchase verbally agreed, a written contract between the buyer and seller must be drawn up. A lawyer may act for the purchaser. Besides the terms and conditions of the purchase, the contract must include a description of the property and the closing date. The agreement usually provides for the payment of a 10% deposit on the property and a title search. Closing the transaction At the closing, a conveyance is executed and the balance of the purchase money is paid. Other items such as the stamp duty, property tax, outstanding utility bills, and sales commissions are also settled at the time. Legal fees usually range from 1 ½%- 2 ½% depending on the property value. Investors should ensure that title deeds to any land owned in The Bahamas are recorded in the Registry of Records in Nassau . There is a nominal recording fee.
Real Estate commission • Unimproved property: 10% of the gross sales price • Improved property: 6% of the gross sales price ( New Providence ) 8% of the gross sales price ( Family Islands ) • Residential management fee: 12 ½%- 15% of the gross rent • Commercial management fee: 5%- 7% of the gross rent Stamp duties are customarily split equally between the vendor and the purchaser. The rates of stamp duty applicable to deeds of conveyance, assignments or transfers of realty are as follows: • When the amount or value does not exceed $20,000, the rate is 2%. • Exceeding $20,000, but not exceeding $50,000, the rate is 4%. • Exceeding $50,000, but not exceeding $100,000, the rate is 6%. • Exceeding $100,000, but not exceeding $250,000, the rate is 8%. • Exceeding $250,000, the rate is 10%. Stamp duties are customarily split equally between the vendor and the purchaser. The rates of stamp duty applicable to deeds of conveyance, assignments or transfers of realty are as follows: • When the amount or value does not exceed $20,000, the rate is 2%. • Exceeding $20,000, but not exceeding $50,000, the rate is 4%. • Exceeding $50,000, but not exceeding $100,000, the rate is 6%. • Exceeding $100,000, but not exceeding $250,000, the rate is 8%. • Exceeding $250,000, the rate is 10%.
The Bahamas Real Estate Association Prospective buyers should take advantage of the knowledge and experience offered by members of The Bahamas Real Estate Association (BREA). Effective from January 1, 1996 all real estate practitioners in The Bahamas are required to hold either a Brokers or Salesman's license. Anyone requiring the services of a realtor should ensure that the realtor is licensed. All licensed Realtors are members of The Bahamas Real Estate Association and as such are part of a network of brokers and salesmen who cooperate fully with one another and abide by a strict code of ethics. |
