The Bahamas has long been a favorite for international buyers looking for a second home, vacation property, or real estate investment. The good news is that The Bahamas is very welcoming to foreign ownership. Still, there are a few important rules and steps every non-Bahamian buyer should understand before getting started.
Here is a simple breakdown of how it works, starting with the most basic question.
Can Non-Bahamians Own Property in The Bahamas?
Yes. Non-Bahamians can own property in The Bahamas in their personal name or through a company. In most cases, the process is straightforward, especially for standard residential purchases (ie: owner occupied)
The main difference compared to a local buyer is that certain purchases require government approval or registration.
Is Government Approval Required, & When?
If a non-Bahamian is purchasing:
- A property that is two or more acres, or
- Property that will be used for commercial purposes (such as a rental development, resort, or business).
then a permit from the Bahamas Investment Authority is typically required before the transaction is completed. Your local attorney will apply for this during the closing process. It’s important to include a time contingency for this in your offer.
For most standard home purchases under two acres that are for private residential use, formal approval is not required. Instead, the purchase must be registered with the Bahamas Investment Authority. Your attorney handles this process on your behalf.
What Is the Buying Process Like?
The buying process for a non-Bahamian is very similar to what you may be used to in the US, Canada, or the UK.
1. Make an Offer - Once you find the right property, your agent prepares a written offer. This outlines basic terms such as price, closing period, inspection period, BIA approval period, and other key business terms. It also will include certain contingencies depending on the property, and timelines associated with the same.
2. Sales Agreement – When the offer is accepted and has been signed by both parties, the Vendors attorney typically prepares the Agreement for Sale. A deposit is normally paid at this stage and held in escrow by the Vendors attorney.
3. Due Diligence – Your attorney conducts a title search to ensure the property has clear and marketable title.
4. Government/Bahamas Investment Authority Application or Registration – If required, your attorney submits the necessary documents.
5. Closing – The balance of funds is paid, title transfers to you, the deed is recorded, and (of course) keys turned over.
Cash purchases are common, but financing may be available depending on the bank and your financial profile. Financing is available to foreign purchasers but typically at slightly different rates and terms than locals. I am happy to share key personnel at local banks who deal specifically with non-Bahamian mortgages.
Taxes and Closing Costs
Non-Bahamians generally pay the same transaction taxes as Bahamian buyers.
Typical costs include (note my blog post on closing costs):
- VAT on conveyances (stamp tax/transfer tax) – Usually split between buyer and seller. 10% total, 5% each.
- Legal Fees - Often around 2.5% of the purchased price plus VAT thereon. Confirm with a local attorney to ensure.
- Recording and Registration Fees - ie: inputting the sale into the local registry.
There is no income tax, capital gains tax, or inheritance tax in The Bahamas. However, annual real property tax applies.
Can You Rent Out Your Property?
Yes, but there are guidelines…
If you plan to use your property as a short term vacation rental, you may need a business license and to register with the appropriate government department. Different communities may also have their own restrictions or homeowners association rules specifically in reference to short term rentals (under 3 months).
It is important to confirm this before you buy if rental income is part of your plan.
How Long Does It Take?
A typical closing in The Bahamas can take 30 to 180 days, depending on how quickly title searches, document preparation, and any required government processing are completed. It goes without saying that cash sales typically transact significantly faster than sales with financing.
Working with an experienced local attorney and real estate agent helps keep things on track.
Final Thoughts
Buying property in The Bahamas as a non-Bahamian is very achievable and legally secure, but the process is different enough that local guidance is essential and can prevent costly mistakes. From government requirements, to understanding taxes, and rental rules, having the right team makes all the difference. The right team will also to ensure client focused terms, a timely closing, and support post-closing.
If you are considering purchasing in The Bahamas and want help understanding your options, I would be happy to guide you through the process.
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W Christopher Sands