There are property taxes and stamp duties that real estate investors should be aware of when negotiating to purchase Bahamas Real Estate.
The Government Stamp Tax on Property Conveyances
The Government Stamp Duty (tax on the conveyance of real property). This is a graduated tax. The total amount of the tax is calculated as follows:
- When the value of the consideration is less than or equal to $20,000, the rate is 4%
- When the value of the consideration is greater than $20,001 and is less than or equal to $50,000, the rate is 6%
- When the value of the consideration is greater than $50,001 and is less than or equal to $100,000, the rate is 8%
- When the value of the consideration is greater than $100,001, the rate is 10%
The usual practice in the Bahamas is for the tax to be shared equally between buyer and seller unless otherwise agreed upon.
First time buyers may be exempted from stamp tax on a dwelling house or vacant land purchased for a dwelling house, up to the value of $500,000.
Real Property Tax
Property is assessed before October 15. The Chief Valuation Officer, if it appears that any property subject to assessment has not beenassessed, may assess the property retroactively to a maximum of 10 years at the required amount.
Taxes are due within 60 days of the date on which the assessment notice is deemed to have been served. Also, payment of one or more quarterly installments must be made within those 60 days. These payments should be made to the Public Treasury in Bahamian or US dollars, preferably as a bank draft or international postal order. Personal cheques are not accepted unless bank certified. Foreign cheques must be bank-certified and drawn on a bank in the US or The Bahamas.
Rates of Taxes
In respect of owner-occupied property:
- The first $250,000 of market value is tax exempt
- More than $250,000 and not exceeding $500,000 of market value is .75%
- More than $500,000 and not exceeding $5,000,000 of market value is 1%
- More than $5,000,000 of market value is .25%
In respect of unimproved property other than unimproved property exempt by virtue of Section 39 of the Real Property Tax Act:
- First $7,000 of market value is $100
- More than $7,000 of market value 1.5%.
In respect of any other property:
- First $500,000 of market value is 1%
- More than $500,000 of market value is 2%
Market value is defined as the amount the property would realize, if sold in the open market, without any encumbrances or restrictions. If the tax is not paid on or before the last day the tax becomes due, a surcharge will beadded.
In the case of an extension of time, the Chief Valuation Officer may postpone the date on which the tax is payable in a particular case, by notice in writing.
