Buyers
When are the costs involved in purchasing property in the Bahamas?
The costs involved in purchasing a property in the Bahamas are:
- The Bahamas Government VAT
- Legal fees
What is the VAT (Value Added Tax) on real estate transactions
Below is the VAT amount based on the accepted offer amount of a property:
- 2.5% where the value is $100,000 or under
- 4% where the value is $100,001 - $300,000
- 6% where the value is $300,001 - $500,000
- 8% where the value is $500,001 - $700,000
- 9% where the value is $700,001 - $1,000,000
- 10% where the value exceeds $1,000,001
Do Bahamian citizens receive any exemptions, reductions, or special considerations when it comes to VAT
Bahamian Citizens purchasing a home for the first time enjoy a lower rate of VAT on the stamping of their conveyances for purchases under $500,000.
Below is the VAT amount based on the accepted offer amount of a property:
- $0 - $300,000 = 0%
- $300,001 - $500,000 = 4%
In addition, if you purchase vacant land and complete construction on your home within 18 months, you may be eligible for a partial VAT refund.
How much are legal fees?
Legal fees, although they can vary, average to be 2.5% of the purchase price.
Does the buyer pay the VAT?
While VAT is a purchaser's tax, the typical practice in the Bahamas is for the VAT tax to be shared equally between buyer and seller unless otherwise agreed upon.
Does the buyer pay the real estate commission?
The seller is typically responsible for paying the real estate commissions.
What is the rate of Real Property Tax in The Bahamas?
Owner-occupied property (owner resides and uses exclusively as a dwelling):
- $0 - $300,000 = Exempt
- $300,000 - $500,000 = 0.625%
- Over $500,000 = 1%
The ceiling for properties valued over $6,000,000 = $120,000 Commercial Properties (more than 4 units that are not owner-occupied):
- $0 - $500,000 = 0.75%
- $500,001 - $2,000,000 = 1%
- Over $2,000,000 = 1.5%
