When considering real estate transactions in the Bahamas, several fees and taxes come into play:
VAT (Value Added Tax) on Property Conveyances
This tax varies based on the type of property:
- For unimproved property or vacant land, it’s 10% of the sales price.
- For improved property like homes or condos, it’s 6% of the sales price.
- Commercial properties or buildings also attract a 6% VAT.
Legal Fees
- Both buyers and sellers typically require legal representation, with fees often around 2.5% plus VAT, though this can vary.
Real Estate Agent’s Commission
- For developed properties, it’s generally 6% of the purchase price.
- For undeveloped land, it’s typically 10%.
Government Stamp Duty:
- This applies to property transactions valued at $100,000 or more, with rates increasing with the value of the transaction.
Real Property Tax
This is assessed based on the market value of the property:
- Properties valued up to $300,000 are exempt.
- For values between $300,000 and $500,000, the tax rate is 0.625%.
- Above $500,000, it’s 1%, with a cap at $120,000 per annum.
Presently there is no real property tax in Freeport.
Additional Costs:
- Buyers might also consider costs like title searches, property surveys, and potential mortgage fees if financing is involved.
When purchasing property in the Bahamas, these costs are often included in the listed price of the property, especially the VAT and real estate agent’s commission, which are typically split between buyer and seller. Always ensure you’re clear on which costs are covered by the listed price and which might be additional.
For the most current rates or specific scenarios, consulting with a local real estate attorney in the Bahamas would provide the most accurate information tailored to your situation.