Stamp Duty, Real Property Tax, and Transaction Costs: The Complete Bahamian Buyer’s Financial Guide

Purchasing property in The Bahamas carries a set of transaction costs and ongoing tax obligations that every buyer — particularly international investors — must account for in their acquisition strategy. Understanding these costs upfront prevents the unpleasant surprise of unexpected liabilities post-closing.

Stamp Duty: The Primary Transaction Tax

Stamp Duty is levied on the transfer of real property in The Bahamas. The rates:

• Properties up to $100,000 BSD: 2.5% total (typically split 50/50 between buyer and seller)
• Properties above $100,000 BSD: 10% total (negotiated split in purchase agreement)
• First-time Bahamian buyers: exemptions may apply — confirm current eligibility with legal counsel

Real Property Tax (RPT): The Annual Obligation

• Owner-occupied residential: First $300,000 assessed value exempt; graduated rate above
• Non-owner-occupied residential: Rates vary by assessed value band
• Annual assessment by the Department of Inland Revenue
• Payment due date: annually; late payment attracts surcharges

VAT on Rental Income

Value Added Tax applies to rental income in The Bahamas. Short-term rentals (less than 21 days) are subject to VAT at the standard rate where the landlord meets the registration threshold. Long-term residential leases are generally exempt. Specific advice from a Bahamian-licensed accountant is essential.

The Tax Advantages of Bahamian Property Ownership

Despite transaction costs, The Bahamas remains one of the most tax-advantaged jurisdictions for property ownership globally:

• No income tax
• No capital gains tax
• No inheritance or estate tax
• No wealth tax
• No corporate tax (for holding structures)

For the serious international investor, the effective tax burden on Bahamian property — when structured correctly — is among the lowest in the Caribbean basin.

This article provides general guidance only. Tax laws are subject to change. All investors should retain qualified Bahamian legal and accounting counsel prior to acquisition and annually thereafter.