Buying Property in Harbour Island: FAQ
What’s the first thing I need to know?
Can anyone own land in the Bahamas?
Will I need a lawyer?
In what form is title to property given?
Do I need title insurance?
What’s the best way to furnish my new home on Harbour Island?
How are customs fees calculated?
What other expenses will I face?
Is there an annual property tax?
Is this an investment?
Who pays for what?
What are the benefits of applying for residency?
You can do it. Your realtor is a professional who knows the market and will walk you through the steps. Whether it’s your first home for raising your family or a vacation getaway, your realtor can make the process almost effortless for you.
Yes. Bahamian nationals, of course, may own land; and furthermore, the International Persons Landholding Act, 1993, provides for the sale of real property to non-Bahamians.
Yes. A local attorney will facilitate searching the title, ensuring that the documents of title are properly prepared and are in good order, and giving an Opinion on the title to the property. This Opinion is considered to be the same as title insurance as the lawyer is liable should the purchaser find a defect in the title. Local lawyers carry indemnity insurance.
The vast majority of property is sold Freehold. The exceptions are for Leasehold properties, which are generally Crown Lands, i.e., Government-owned properties that are leased for agricultural or development purposes. Generally, the Government of The Bahamas does not sell its property.
It couldn’t hurt. Risk premiums run about .2% of value.
Very little is available here. It’s a small island. Getting things delivered here is usually not a problem; it’s just expensive. Thus, as TJ Davis, who recently built says, “You’ll have to become a smart shopper and decide between two basic choices”:
1. Shop in Nassau. Get there by plane or fast ferry. Expenses will include travel, lodging, food, and shipping.
2. Fly to the States. More expensive in some ways but the upside is more variety and sometimes significantly lower prices. In Ft. Lauderdale or Miami ship your goods to G&G, who will get them to Harbour Island. Once again, figure the costs of travel, room & board, etc. Then there are customs fees.
They range from as little as 8% for a computer to 42% for a car. And the fees are based on the gross amount listed including shipping.
Example: You buy a table in Miami for $1000 and pay G&G $150 to ship it to Harbour Island. Total cost to you so far is $1150. Customs figures its fee on that amount; thus, 42% of $1150 = $483. Of course, now you have to get it home from the dock, which usually involves hiring a local trucker.
A good rule of thumb in keeping track of your budget when you shop in the States is to mentally add 50%; thus if its price tag is $100, it will ultimately cost you about $150 to enjoy it in your new Harbour Island home.
It’s very much like buying a house in the United States with closing costs and lawyer’s expenses and title search fees and permits and inspections.
The Government Stamp Duty
The largest extra cost is for conveyance. This is a graduated tax on the conveyance of real property that is sometimes split between the vendor and the purchaser. Currently, the Duty is calculated as follows:
Under $20,000 2%
$20,000 $50,000 4%
$50,000 $100,000 6%
$100,000 $250,000 8%
Over $250,000 10%
Yes. Properties are assessed a value. For owner-occupied properties, the tax is nothing on the first $100,000, 1% on the next $400,000, and 1½ % on the excess over $500,000. On other properties, the rate is 1% on the first $100,000, 1½ % on the next $400,000, and 2 % on the excess over $500,000.
Whether buying or building, Harbour Island affords the smart investor high quality real estate opportunities. Further, with legitimate tax and estate planning, real estate may pass on to the next generation free of income, capital gains, and estate tax.
Non-Bahamians should also register their investment with the Exchange Control at the Central Bank of The Bahamas to ensure that on resale they will be able to remit the net proceeds of sale outside the Bahamas in the currency of the original investment.
A typical sale, called a Gross Sale, assumes the following:
The Vendor (seller) pays
1. A portion of the Government Stamp Tax
2. The real estate agents commission. The commission on the sale of residential developed property is 8% of the gross sales price; on the sale of undeveloped property, it’s 10%.
3. The vendor’s legal fees. The legal fees on a sale or purchase are usually one-half of 2½ % of the first $500,000, 2% of the next $500,000, 1% of the next $4,000,000 and ½% thereafter.
The Purchaser pays
1. A portion of the Government Stamp Tax
2. One-half of the purchaser’s legal fees as detailed, to include the lawyers Opinion on the title to the property.
3. Recording fees ($3.50 per page) on the conveyance and other closing documents which need to be recorded.
4. Permit fees under the International Persons Landholding Act if applicable.
The Bahamas has no income tax, capital gains taxes, or inheritance taxes. Also, there is no sales tax with the exception of the Stamp Duty paid on the conveyance of real property.Thus, you may want to consider applying for Permanent Residency, which is available to those who invest a minimum of $500,000 in the Bahamas. This investment may take the form of the purchase of real property with a minimum value of $500,000.
|earnest money deposit||deposit|
|warranties of title||conveyance as beneficial owner|
|title report||abstract or epitome of title|
|title objections||requisitions on title|
|to produce sufficient title
(as required by law)
|to deduce proper title|
|all of seller’s right, title, and interest (typically defined as “the Property,” etc.)||hereditaments|
Browse some of the nicest homes Harbour Island has to offer at my page at Coldwell Banker Lightbourn. Even if you don’t see a home or lot that whets your appetite, let us know…we have a few special items hidden away for folks just like you.