Property-Related Taxes in Bahamas
The Bahamas does not levy personal income tax, rental income tax, capital gains tax, inheritance tax, or estate tax. The main form of taxation affecting property owners is real property tax.
Rental income is not taxed, although landlords must obtain and renew a business license annually. Property transaction costs are relatively high, largely due to transfer taxes and agent fees, with roundtrip costs typically ranging from 10% to 22%. Annual real property tax applies at progressive rates based on property value and usage.
Personal Income and Rental Income Tax
There is no personal income tax in the Bahamas. Rental income earned from leasing property is not subject to income tax.
However, property owners who rent out real estate are generally required to obtain a business license. Business licenses must be renewed annually, and the applicable fees typically range from US$250 to US$1,250, although higher fees may apply depending on the level of profits generated.
Capital Gains Tax
The Bahamas does not impose capital gains tax. Gains realized from the sale of real estate are therefore not subject to taxation.
Property Transfer Tax
Property transfer tax in the Bahamas is applied primarily through a VAT-based system, which replaced the former flat stamp duty regime.
Foreign buyers are generally subject to a flat 10% VAT on property transfers. Bahamian citizens benefit from graduated rates that can be as low as 2.5%, depending on the property value, with a preferential 4% rate available for qualifying first-time homebuyers.
In most transactions, the property transfer tax is split equally between the buyer and the seller, although the allocation of this cost is negotiable and may vary depending on the terms of the sale agreement.
Property Buying and Selling Costs in the Bahamas
| Transaction Costs | ||
| Cost/Tax Type | Percentage | Who Pays? |
| Property Transfer Tax | 2.50 - 10.00% | buyer |
| Legal Fees | 1.50% - 2.50% | buyer |
| Notary Fees | 0.00% | buyer |
| Real Estate Agent Fee | 6.00% - 10.00% | seller |
| Costs Paid by Buyer | 4.00% - 12.50% | |
| Costs Paid by Seller | 6.00% - 10.00% | |
| Roundtrip Transaction Cost | 10.00% - 22.50% | |
| Source: Global Property Guide | ||
Annual Property Tax
Real Property Tax
Real property tax is levied annually on the assessed market value of property located in the Bahamas. The applicable rate depends on the classification and value of the property.
|
Tax on Owner-Occupied Properties |
|
| TAX BASE | TAX RATE |
| Up to $300,000 | 0% |
| $300,000 - $500,000 | 0.625% on value over $300,000 |
| Over $500,000 | 1% on all value over $500,000, with a ceiling of $150,000 |
|
Tax on Non-Owner-Occupied Properties |
|
| TAX BASE | TAX RATE |
| Up to $500,000 | 0.75% on value up to $500,000 |
| $500,000 to $1,500,000 | 1.00% |
| Balance over $1,500,000 | 1.50% |
