Guide to buying a property in the Bahamas
Buying a property in the Bahamas by foreigners
Foreigners can buy property in the Bahamas and the Government of The Bahamas welcomes investment from overseas buyers.
There are no restrictions on foreign buyers acquiring real estate in The Bahamas as they enjoy the same rights as Bahamian citizens, including the right to purchase beachfront land.
The profession of real estate agent in The Bahamas
With regard to working as an estate agent/salesperson in The Bahamas one needs to be either a Bahamian citizen or the holder of a certificate of permanent residence (with the right to work being endorsed upon).
Upon passing an exam issued by the BREA (Bahamas Real Estate Association), you have six months to apply for a Bahamas Real Estate licence.
You must work for three months full time during the six month period and the application must be made during those three months.
You will need a good education, the ability to deal with people and computer skills.
The agreement of sale or the purchase contract of the real estate is drafted usually with a reservation of the financing and the approval of the government of the application of the buyer.
Some contents of the purchase contract are regulated by law, especially in the Conveyancing and Law of Property Act (Section 3).
This act standardises the obligation to create a so-called abstract of title which a complete genealogy of the property titles, from the first proprietor, usually the British crown, to the present one.
The buyer has though no right to demand of the vendor the derivation of his property title for a period of more than 30 years.
In purchase contracts however, the parties usually exclude the abstract of title.
The down-payment, usually 10% of the purchase price, will be repaid to the potential buyer if he does not receive the financing or the necessary government permissions.
The financing of purchase of real estate through local Bahamian financial institutions is possible, but each institution has different criteria.
Some banks allow credits only to applicants who have a residence permit.
In other financial institutions the residence permit plays only a role in deciding the currency (US$ or BS$) in which the credit is granted.
The value of the land is determined by an estimation.
The lawyer prepares a declaration of the real estate and transmits it to the respectivetax authority who also receives a copy of the transmission document – the conveyance – because the purchase price is usually a good indication for the market value.
Consultation of a lawyer
The purchase contract is normally prepared by a Bahamian lawyer and must be attested by a notary.
The lawyer who is authorised to act on behalf his client requires no formal, written authority to complete the proceedings associated with the conveyance.
For the closing, the formal conveyance is sent to the seller for signing by courier, if the parties are not present in the Bahamas.
Then they are returned to the lawyer of the buyer for the payment of the stamp fee and recording.
The stamp fee is paid 50:50 by the seller and the buyer unless otherwise agreed.
The lawyer’s fee is ordinarily 2,5% of the purchasing price.
The lawyer will search also for any unpaid real estate taxes or unfulfilled claims resulting from a civil action against the vendor.
Both unpaid real estate taxes and judgments in a civil action connected with the real estate of the creditor would expose the buyer to liability for the amount of the unfulfilled claim.
Right of resignation
Each contract of purchase must contain a right of resignation for seven days.
The period of time begins with the execution of the contract or the delivery of the public offer of purchase, depending on which point of time is the later one.
The purchaser’s contract must further provide that the refund will be made within twenty days after receipt of notice of cancellation.
Deductions are only possible for completed acts, such as an overnight stay at the time-sharing of the potential buyer in the time-sharing complex.
The International Persons Land Holding Act introduced the amenity that foreigners possessing real estate in The Bahamas can receive an Annual Home Owner’s Resident Card from the Director of Immigration after application and payment of a fee.
This status gives almost all rights of a citizen to the owner, excluding the right to vote.
The card guarantees the entry of the owner and proprietor and his family and their stay in The Bahamas.
It is usually given to foreigners who buy a secondary residence for $500,000 or more.
Condominia and time-sharing units
The purchase of a condominium is a special form of real estate purchase.
It is effected by a declaration of condominium which has to be registered in the Registry of records.
It contains the exact description of each unit and the rights of their owners.
It also includes a complete set of drawings and plans of each floor and cellar of the building.
The effect of lodging the declaration for registration is that the property, to which the declaration relates, is thereupon deemed to be divided in separate units with determined boundaries.
A unit owner has no personal liability for the acts or omissions of a body corporate and his liability for the common expenses is limited to the amounts of the contributions from time to time levied upon him.
A government permit is not required to purchase an interest in a condominium.
But the purchase must be registered according to the International Persons Land Holding Act.
A buyer of a time-sharing unit receives the right to use a time-share object and its facilities for up to six months per year during a period of at least three years.
In New Providence (Nassau), the time-sharing units must be not less than fifty units and on the Family Islands not less than twenty-five.
The application for a licence to develop a time-share project has to be addressed to the Investments Board.
An applicant has to establish his credibility that he has disposes of the financial ability necessary for the completion and operation of his project.
Before a licence is granted, the health and fire services and town planning authorities inspect the accommodations and facilities of the time-sharing project.
The owner of a time-sharing project or its managing agent must also record new timesharing contract with the Registrar of vacation plans and time-sharing within sixty days the in order to assure the rights of the purchaser.
The registration creates in favour of the 2 purchaser for the period of his participation a claim on the time-sharing project and its facilities.
Costs of the real estate purchase/sale
A typical sale, called a “Gross Sale”, assumes that the vendor (seller) will be responsible for thepayment of the real estate agent’s commission.
The commission on the sale of developed property is 6% of the gross sales price.
The commission on the sale of undeveloped property is 10%.
The purchaser (buyer) will be responsible for 1/2 of the Government Stamp Tax as set out above, (to be split with the vendor).
The purchaser’s legal feesas detailed above, recording fees on the conveyance and other closing documents which need to be recorded.
Payment of the permit under the International Persons Land Holding Act, if applicable.
Stamp fee based on the value of the land
$ 0 – $ 20.000 -> 2,00%
$ 20.000 – $ 50.000 -> 4,00%
$ 50.000 – $ 100.000 -> 6,00%
$ 100.000 – $ 250.000 -> 8,00%
Over $ 250.000 -> 10,00%