Mark Tiernan,Bahamas Real Estate Guide to Permits

2007-11-28T23:34:00.000-08:00

Mark Tiernan,Bahamas Real Estate Guide to Permits, Residency and More

In 1993, the International Persons Landholding Act was put into motion to encourage foreigners to purchase a second home in The Bahamas. And it couldn't be simpler. If a foreigner buys a single family dwelling or vacant land to be used in the construction of such a dwelling, then he no longer needs to obtain a permit from the Government prior to the purchase. He only needs to register the acquisition later with the Investments Board. Permanent residents of the Bahamas and foreigners who inherit property in the Bahamas don't have to obtain a permit before acquiring land but must register afterward.

However, there are cases where a permit will be needed for Bahamas real estate. First, if the property is undeveloped land and of five acres in size or larger. Secondly, if the property is not a private residence, or it is not intended for development as such, a permit is needed.

In dealing with mortgages, the act is not meant to be a road block. In fact, it provides that licensed banks, trust, and insurance companies who acquire an interest in or take possession of property under a court order must register that acquisition. An acquisition by way of foreclosure under a mortgage or of land acquired by an authorized foreign state will not require a permit but must be registered.

With leases, foreigners are not required to obtain permits, register leases, or letting agreements unless they are for trade or business purposes and the term can exceed 21 years.

Not only has the government made owning a second home easy for foreigners, they have also included a condition so that a foreigner no longer pays a double rate of stamp duty; he now pays the same single rate as a Bahamian.

The stamp duty is a tax that is payable on the delivery of all real property based on the value as follows: Stamp duty starts at 2% for real estate valued under $20,000 US, but increases to 10% for real estate over $250,000 US. Payment of this tax is usually shared equally between the seller and the buyer. There is also a 1% stamp duty on mortgages paid by the borrower. The usual practice in the Bahamas is for the tax to be shared equally between buyer and seller unless otherwise agreed upon.

If you are entering the Bahamas, you must fill out an embarkation-disembarkation card which is usually provided by your travel agent, the airline, or the ship you are traveling on. A visa and passport is not required of you if you are a Canadian citizen or subject of the United Kingdom unless the stay exceeds three weeks. U.S. citizens on regularly scheduled airlines, pre-cleared for return at U.S Customs and Immigration at Nassau International Airport also do not require a visa (though proof of citizenship is required).

You are allowed a maximum stay of eight months with proper documents which includes a return ticket and evidence of financial support. If you would like to stay longer, then you have to apply for temporary residency to the Director of Immigration. If, however, you would like to make the Bahamas your permanent residence by way of Bahamas property investment, then you will have to apply for permanent residency. If you plan on working in the Bahamas, a work permit must be applied for separately.

There are different levels of residency. The first is permanent residence which requires a purchase of a residence of more than $500,000, subject to a $10,000 one-time payment. Another level of residence is that of a homeowner where no minimum purchase is required, however, your card must be renewed every year for a fee of $1000. And the last level of residence is an annual residence where, again, no minimum purchase is required but you must renew every year for a fee of $1000.

Owning Bahamas real estate sounds spectacularly easy and that's because it is. But there are some things to keep in mind when making an investment of this size. Here are a few guidelines to help you out when buying Bahamas property:

-Think location: Depending where you buy, prices will vary. On the main islands such as New Providence and Grand Bahama, prices are more than double the prices in Florida. If you're looking for an investment property, these would be good choices. If you're looking into buying a quiet retreat, consider something on the family islands as they are less expensive.

-Have a look: Once you have decided where you would like to buy a property, the next step is to have a look at more than one property so you can get an overall picture of the market.

-Take a second look: It's a good idea to get a certified professional to look over the property just in case there are hidden surprises!

So whether you're making an investment or buying a vacation home, the Bahamas will welcome you with open arms. All you have to do is make your ticket to paradise!

Ester Napoli: They say if you want to be happy, you have to do something you are passionate about. One of my passions is traveling and the one place I fell in love with was the Bahamas; the white sand, clear waters, friendly environment. It is paradise on earth. I enjoy all aspects of the Bahamas; the culture, the history, the countless sports and activities to keep you busy, and of course, the fabulous weather.

Tiernan and Company Solicitors
Tiernan and Company Inc
Tiernan and Company Ireland

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