Bahamas: Overview

RENTAL YIELDS

Last Updated: Nov 28, 2007

Yields are good in the Bahamas

In New Providence and Paradise Island, yields on condominiums range from 5.3% - 7.8%, with an average of 6.6% for both inland and waterfront areas. Waterfront properties generally have slightly higher yields and are more expensive.

Condominium prices in Abaco and Grand Bahama are cheaper but do not differ greatly from those in New Providence and Paradise Island. At an average of US$3,617 per sq. m, they are a thousand dollars less. Yields are also less at 4.56%, only reaching up to 6.61% for units inland.

In these areas, waterfront and inland houses almost cost the same at US$6,007 per sq. m in New Providence and Paradise Island, and US$6,132 per sq. m in Abaco and Grand Bahama.

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TAXES AND COSTS

Last Updated: Jul 26, 2006

Bahamas impose little tax

Income Tax: No income taxes, capital gains taxes, or inheritance taxes are payable either by residents or non-residents.

Property Tax: Property taxes should not be a major concern. The maximum tax rate is 2% for properties worth more than US$500,000.

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BUYING GUIDE

Last Updated: Oct 15, 2007

Buying costs can be very high in Bahamas

Round-trip transaction costs, i.e., the cost of buying and selling property, range from 9.10% to 30.50%. The huge range is partly due to the progressive nature of Stamp Duty, which ranges from to 2% to 10%.

The high transaction costs are also due to the (very high) agent's commission, usually paid by the seller.

Commission for real estate agents in the Bahamas are set by The Bahamas Real Estate Association. For properties in the Grand Bahama, the commission is 15% of the gross sales price. In the Out Islands, commission is 8% for residential property sales, and 10% for vacant lots. For the rest of the islands including New Providence (Nassau), commission is 6% of residential property sales prices, and 10% for vacant lots.

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LANDLORD AND TENANT

Last Updated: Jun 06, 2006

Bahamas' law is pro-landlord

Rent: Rents can be freely agreed both for long-term fixed term tenancies, and for holiday lets.

In theory some property falls under the Rent Control Act, but it only applies to buildings with a total value of less than B$25,000, so in practice it is inoperative.

Tenant Eviction: The landlord must give the tenant proper notice of rent due and possible eviction for defaulting on rent. If the tenant fails to pay the rent on time, the landlord can summon the local police and repossess the property.

Even though a court order is not necessary for tenant eviction, most landlords bring defaulting tenants to court and sue for uncollected rent.

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ECONOMIC GROWTH

Stable economy and political environment

The Bahamas (pop. 323,000) is composed of 700 islands and islets. The capital, Nassau, is located on the largest island, New Providence. Grand Bahama is one of the larger islands and is home to Freeport City, an important free trade zone and commercial center.

All other islands in this beautiful archipelago are referred to as Out Islands or Family Islands.

Tourism is responsible for nearly 60% of the country's GDP, though the total number of stay-over visitors to the Bahamas increased only by an average of 0.2% per year between 1998 and 2002. Financial services account for 15% of GDP.

There was an economic slowdown in 2001-2003 because of the impact of September 11 on the US economy. GDP growth was 3.5% in 2005, and growth of 4% is forecast in 2006. The GDP per capita is one of the highest in the Caribbean at US$19,194.

One Bahamas dollar is equivalent to a US dollar. Both currencies are used in the islands.

The Bahamas has a stable political environment. A member of the Commonwealth, the Bahamas has strong relations with the US.