Property Tax Overview in Bahamas

The Bahamas operates one of the Caribbean's most straightforward property tax regimes. The principal annual levy is Real Property Tax (RPT), administered by the Department of Inland Revenue (DIR). Property transfers trigger a separate conveyance VAT in place of the former stamp duty. Neither capital gains nor personal income tax exists in the jurisdiction, making the annual RPT and transfer tax the two primary cost centres for real estate owners.

What are the current Real Property Tax rates for residential properties in The Bahamas?

Owner-occupied residential properties benefit from a full exemption on the first BSD 300,000 of assessed value. The next BSD 200,000 (from BSD 300,001 to BSD 500,000) is taxed at 0.625%. Any assessed value above BSD 500,000 is taxed at 1.0% per annum. The annual RPT liability for an owner-occupied home is capped at BSD 150,000 regardless of assessed value, a ceiling established by the Real Property Tax (Amendment) Act 2023 effective July 1, 2023. ¹ To qualify for the owner-occupied rate, the owner must occupy the property as a primary residence for a minimum period each year; the DIR assesses eligibility at the time of billing. Non-owner-occupied residential properties (rental or vacant investment homes of four units or fewer) are taxed at a flat 0.625% of assessed value above BSD 75,000, with a BSD 300 minimum on properties assessed at BSD 75,000 or below.

How are commercial and investment properties taxed annually?

Properties used for commercial purposes or containing five or more residential units are assessed under a separate commercial schedule. ¹ The first BSD 500,000 of assessed value carries a rate of 0.75%. The band from BSD 500,001 to BSD 2,000,000 is taxed at 1.0%. Assessed value above BSD 2,000,000 is taxed at 1.5%. These rates apply to hotels, offices, retail premises, and foreign-owned rental properties. There is no blanket annual cap for commercial properties equivalent to the BSD 150,000 residential ceiling, though condo-hotel units subject to a rental pool arrangement are taxed at 75% of the residential rate (effectively 0.47%), subject to a separate BSD 150,000 cap.

What is the conveyance VAT on property transfers, and how does it differ for Bahamians and non-Bahamians?

The Bahamas replaced traditional stamp duty on real estate conveyances with Value Added Tax (VAT) effective July 2018, consolidated under the Value Added Tax Act. The standard VAT rate is 10%, applied to the higher of the agreed purchase price or the property's current RPT assessed value. ² For non-Bahamian purchasers and companies not wholly Bahamian-owned, the rate is a flat 10% on all transactions. For Bahamian citizens purchasing non-commercial property for their own use, a graduated scale applies: 5% on properties priced up to BSD 100,000; 4% on BSD 100,001 to BSD 300,000; 6% on BSD 300,001 to BSD 500,000; 8% on BSD 500,001 to BSD 700,000; 9% on BSD 700,001 to BSD 1,000,000; and 10% on any amount exceeding BSD 1,000,000. ² First-time Bahamian buyers purchasing a primary residence priced between BSD 300,001 and BSD 500,000 may access a concessionary 4% rate. By convention, the conveyance VAT is shared equally between vendor and purchaser (each paying 5% on a 10% transaction), though the allocation is negotiable. Legal fees, broker commissions, and surveyor fees attract standard 10% VAT separately.

Does The Bahamas impose capital gains tax or income tax on real estate?

No. The Bahamas does not levy personal income tax, corporate income tax, capital gains tax, or withholding tax on any form of income or gain. ³ PwC's Worldwide Tax Summaries confirm: "There are no tax filing requirements on personal income in The Bahamas" and that both individual and corporate capital gains rates are not applicable. Gains realised on the sale of real estate are therefore not subject to any separate gains levy beyond the conveyance VAT borne by the seller's share at the time of transfer. A Domestic Minimum Top-up Tax enacted in November 2024 applies only to multinational enterprise groups with annual revenues exceeding EUR 750 million and has no bearing on individual real estate transactions.

What rules govern property ownership by non-Bahamians under the International Persons Landholding Act?

Non-Bahamian individuals and foreign-owned entities are permitted to purchase real estate in The Bahamas subject to compliance with the International Persons Landholding Act (IPLA). ⁴ The Act creates two pathways. First, a Certificate of Registration (fee: BSD 250) suffices when a non-Bahamian acquires an improved property for use as a single-family residential home and it is that person's first Bahamian property purchase. Second, a Permit from the Bahamas Investment Authority is required in all other cases: subsequent purchases; any commercial, rental, or investment acquisition; and acquisition of undeveloped land exceeding two contiguous acres. The permit fee is BSD 500. A permit must be obtained and annexed to the conveyance before recording at the Registry of Records; failure renders the acquisition null and void under the Act. A 2025 amendment introduced automatic 180-day extensions where a permit holder has not yet completed the acquisition, subject to a maximum of two extensions. Bahamian permanent residents are treated differently from non-resident foreigners and should confirm their specific pathway with a qualified Bahamian attorney.

RPT bills are issued annually and are due by December 31. The Department of Inland Revenue offers a 10% discount on current-year RPT for payment made in full by March 31 of the tax year. ¹ Late payment attracts a 5% annual surcharge from January 1 of the following year. Outstanding RPT constitutes a first charge on the property and must be cleared before any conveyance can be recorded. Pension-age Bahamian citizens (65 and older holding a National Insurance Board Senior Citizen's Card) who owner-occupy their home may qualify for a 50% reduction on the RPT balance above the BSD 300,000 exemption, subject to a property value ceiling of BSD 1,000,000.

Property owners and prospective purchasers navigating RPT assessments, conveyance VAT obligations, or IPLA compliance should engage a qualified tax professional familiar with Bahamian real property law. For a broader overview of the jurisdiction, see the Bahamas country overview. For questions about RPT assessments or conveyance VAT, the Department of Inland Revenue's call centre can be reached at +1 242-225-7280.