Bahamas: Overview

RENTAL YIELDS

Last Updated: Dec 23, 2008

Good yields in the Bahamas

Among the different types of properties in Nassau, Bahamas, yields for inland houses rank the highest average of 9.02% versus 6.33% for houses along the water. On the other hand, Nassau waterfront condominiums placed 0.71% higher than condos inland. Typically, waterfront properties have slightly higher yields and are more expensive.

Houses in Abaco & Grand Bahama for both inland and waterfront average at around US$ 1,400,000

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TAXES AND COSTS

Last Updated: Jan 19, 2009

Bahamas impose little tax

Rental Income: There are no income taxes but stamp duties are imposed when leasing Bahamian real property.

Capital Gains: There are no taxes on capital gains in the Bahamas.

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

Inheritance: Inheritance is not taxed in the islands.

Residents: Income of residents is not taxed.

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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

Last Updated: Aug 31, 2006

Tourism: the life-blood of Bahamas economy

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 and employs more than 40% of the total workforce. There were more than 4.5 million tourist arrivals every year dominated by Americans and Europeans. Offshore finance, the second largest industry, accounts for around 15% of GDP.

There was an economic slowdown in 2001-2003 because of the impact of September 11 on the US economy. Then in 2004, economic recovery was delayed when Hurricane Frances and Hurricane Jeanne hit the Bahamas, causing job losses as a result of closure of severely damaged establishments.

Subsequently, the Bahamas bounced back with GDP growth of 2.5% in 2005, and 3.4% in 2006. The Bahamas’ GDP per capita is one of the highest in the Caribbean, at US$19,736 in 2007.

The Bahamian dollar, used since 1966, is pegged to the US dollar at BSD1 = USD1. 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.