Yes, non-Bahamians can buy property in Grand Bahama, and the process is quite straightforward. The Bahamian government actively encourages foreign investment in real estate. Under the International Persons Landholding Act, you do not need special approval to buy residential property if the land is under five acres and you plan to use it as a personal residence. You simply buy the property and register the purchase with the government afterward.
If you are buying more than five acres, or if you plan to rent out the property for income, you will need to apply for a permit before completing the transaction.
That is the short answer. The rest of the process involves navigating local taxes, understanding exchange controls, hiring the right professionals, and learning the unique rules of the Grand Bahama market. Here is exactly how to navigate the property-buying process from start to finish.
Buying property in another country always comes with a unique set of rules. In the Bahamas, the legal structure is heavily based on British common law, which provides a familiar foundation for many North American and European buyers.
The International Persons Landholding Act
This is the most important piece of legislation you need to know. It dictates exactly how foreigners can acquire land. The act was designed to simplify the process and remove unnecessary red tape for average homebuyers. It categorizes foreign buyers into two groups: those who need to register their purchase, and those who need a permit.
When You Only Need to Register
If you are buying an undeveloped plot of land or a single-family home on less than five acres, and you only intend to use it for yourself and your family, you do not need prior government approval. You go through the standard purchasing process, and once the sale is closed, your attorney will register the purchase with the Foreign Investments Board.
When You Need a Permit
You will need to apply for a permit from the Foreign Investments Board before you buy if any of the following apply to you:
- The property is larger than five acres.
- You are buying the property with the intention of renting it out (this includes short-term vacation rentals).
- You are buying property for commercial development.
Applying for a permit sounds intimidating, but it is a standard procedure. Your local attorney handles the paperwork, and as long as your background check clears and your intentions are straightforward, permits are rarely denied. However, this step will add a few weeks to your timeline.
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2. Crunch the Numbers: Taxes, Fees, and Financing
When budgeting for a property in Grand Bahama, the sticker price is only part of the equation. Closing costs in the Bahamas are relatively high compared to other regions, and you need to have cash on hand to cover them.
Value Added Tax (VAT) on Real Estate
The Bahamas does not have a capital gains tax or an income tax. Instead, the government relies heavily on Value Added Tax (VAT). When you buy real estate, VAT is applied to the conveyance (the legal transfer of the property).
The VAT rate on real estate transactions is typically 10%, though it can vary slightly based on the value of the property. The standard practice in the Bahamas is for the buyer and the seller to split the VAT 50/50. This means you should budget for about 5% of the purchase price to go toward this tax.
Legal Fees and Real Estate Commissions
You will also need to pay your attorney. The standard legal fee for real estate transactions in the Bahamas is 2.5% of the purchase price. Just like the VAT, this is paid at closing.
Real estate agent commissions are generally paid entirely by the seller. The standard rate is 6% for developed property and 10% for vacant land. As a buyer, you do not pay this out of pocket, but it is helpful to understand how the transaction is structured.
In total, a buyer should expect closing costs to sit roughly between 7% and 8% of the final purchase price.
Annual Real Property Tax
Once you own the property, you are subject to annual real property taxes. The rates depend on the value of the property and whether it is developed or vacant.
For owner-occupied properties, the first $300,000 of the property’s value is typically tax-exempt. The next $200,000 is taxed at 0.625%, and anything above $500,000 is taxed at 1%. There is a cap on the maximum property tax you can pay annually.
It is worth noting that certain areas within Freeport (the main city in Grand Bahama) operate under the Hawksbill Creek Agreement. This agreement provides specific tax exemptions, but as a foreign individual, you will likely still pay property tax unless you structure your purchase through a specific type of Bahamian company. Your attorney will advise you on the most tax-efficient way to hold the title.
Financing Your Purchase
While you can get a mortgage from a Bahamian bank as a non-resident, it is not always the most practical route. Local banks typically require a large down payment from foreigners—usually between 30% and 40%. The interest rates also tend to be higher than what you might find in the US, Canada, or the UK.
Because of this, most foreign buyers choose to purchase their Grand Bahama property in cash. If you need financing, it is usually cheaper and faster to secure a home equity line of credit or a personal loan in your home country and use those funds to buy the Bahamian property outright.
3. Search for the Right Property in Grand Bahama
Grand Bahama offers a very different lifestyle compared to Nassau or the Out Islands. It is quieter, more spaced out, and generally much more affordable. Knowing where to look and who to work with will save you a lot of time.
Working with a Licensed BREA Agent
In the Bahamas, you should only work with a real estate agent licensed by the Bahamas Real Estate Association (BREA). This ensures they are legally allowed to practice and are bound by a strict code of ethics.
The Bahamas operates on a Multiple Listing Service (MLS), similar to the US and Canada. This means your agent can show you any property on the market, regardless of which brokerage has the listing. You do not need to contact five different agents to see five different houses; pick one agent you trust and let them arrange all the viewings.
Popular Areas for Expats
Freeport and Lucaya are the most popular areas for foreign buyers. Lucaya offers canal-front homes with easy ocean access, making it ideal for boaters. The Fortune Bay and Discovery Bay neighborhoods are highly sought after for their quiet streets and proximity to the beach.
If you want something more remote, West End provides a historic, laid-back fishing village atmosphere, while the East End offers complete seclusion and raw natural beauty.
Condos vs. Single-Family Homes
Condos are very popular in Grand Bahama for second-home buyers because they offer a “lock-and-leave” lifestyle. The Homeowners Association (HOA) takes care of the landscaping, exterior maintenance, and security. However, HOA fees in the Bahamas can be high, often covering hurricane insurance for the building’s exterior.
Single-family homes offer more privacy and avoid HOA fees, but you are entirely responsible for the upkeep. In a tropical climate, maintenance is a constant requirement. You will need to factor in the cost of pool cleaning, landscaping, and general property management if you are not on the island full-time.
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4. The Step-by-Step Purchasing Process
Once you have found the property you want, the actual buying process follows a very specific sequence of events. Do not try to skip steps or cut corners here.
Step 1: Hire a Bahamian Attorney
You cannot and should not buy property in the Bahamas without a local attorney. Title insurance is not a standard part of the real estate process here. Instead, buyers rely on the “opinion of title” provided by their lawyer. Your attorney is responsible for ensuring the seller actually owns the land and that there are no hidden liens or encumbrances attached to it.
Step 2: Make an Offer and Sign the Agreement of Sale
Your real estate agent will help you draft a formal offer. Once the seller accepts, your attorney and the seller’s attorney will draft the Agreement of Sale. This document outlines the purchase price, the closing date, and any conditions (such as a satisfactory home inspection).
Step 3: Pay the Deposit
Upon signing the Agreement of Sale, you are required to pay a deposit. This is almost always 10% of the purchase price. The deposit is not paid directly to the seller; it is held in a secure escrow account by the seller’s attorney until the closing day.
Step 4: Title Search and Exchange Control
While the deposit is in escrow, your attorney will conduct the title search. This process usually takes a few weeks.
During this time, your attorney will also register your incoming funds with the Central Bank of the Bahamas for Exchange Control purposes. The Bahamian dollar is pegged one-to-one with the US dollar. Registering your funds ensures that if you ever sell the property in the future, you will be legally permitted to take the proceeds of the sale out of the Bahamas in your original currency.
Step 5: Closing and Conveyance
Once the title is cleared, you move to closing. You will transfer the remaining 90% of the purchase price, plus your half of the VAT and your legal fees.
The seller will then sign the Conveyance, which is the legal document transferring ownership to you. Your attorney will take this document to the government to have it stamped (proving the VAT was paid) and recorded in the public registry. At this point, the keys are yours.
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5. Post-Purchase Requirements and Practicalities
| Step | Description |
|---|---|
| 1 | Choose a real estate agent or attorney |
| 2 | Obtain a permit from the Investments Board |
| 3 | Submit application for a permit to purchase property |
| 4 | Wait for approval from the Investments Board |
| 5 | Complete the purchase transaction |
Owning property in Grand Bahama comes with a few immediate responsibilities. Taking care of these early will make your transition to island life much smoother.
Securing Your Residency Status
Buying property does not automatically grant you the right to live in the Bahamas full-time. Most visitors can stay for up to 90 days on a tourist visa.
If you want to come and go as you please, you can apply for an Annual Homeowners Resident Card. This card is renewed yearly and allows you, your spouse, and your minor children to enter the Bahamas easily and stay for the duration of the permit.
If you want a more permanent solution, you can apply for Economic Permanent Residency. The government offers fast-track permanent residency to foreigners who purchase property valued over a certain threshold (currently starting at $750,000, though properties over $1,000,000 receive the fastest processing). This status allows you to live in the Bahamas indefinitely, though it does not grant you the right to work locally.
Grand Bahama Port Authority (GBPA) Service Charges
If you buy property within the city limits of Freeport, you are buying into an area managed by the Grand Bahama Port Authority (GBPA). In addition to or instead of traditional property taxes, you will have to pay an annual GBPA service charge.
These fees cover the maintenance of the city’s infrastructure, including roads, landscaping of public areas, and canal dredging. The cost varies widely depending on the size and location of your lot, so be sure to ask your real estate agent for the exact GBPA fees attached to a property before you make an offer.
Opening a Local Bank Account
You will need a Bahamian bank account to pay your local utility bills, property taxes, and maintenance staff. Opening a bank account in the Bahamas as a non-resident requires a lot of paperwork due to strict international “Know Your Customer” (KYC) banking regulations.
You will typically need to provide your passport, a reference letter from your bank back home, proof of your home address, and a copy of your new property conveyance. Start this process as soon as your closing is complete, as it can take several weeks for the bank to approve your account.
Setting Up Utilities and Hurricane Insurance
Transferring utilities (power, water, and internet) is a manual process in Grand Bahama. You or your property manager will need to visit the local utility offices in person with your passport, a copy of the conveyance, and cash for a deposit to have the meters transferred into your name.
Finally, you must secure hurricane insurance. Grand Bahama is in a hurricane zone, and severe storms are a reality of living in the region. Comprehensive property insurance that includes wind and water damage is expensive, typically costing between 1% and 1.5% of the property’s replacement value annually. If you bought a condo, check your HOA documents closely—the exterior insurance is usually covered, but you will still need to purchase an interior policy for your personal belongings.
FAQs
1. Can non-Bahamians buy property in Grand Bahama?
Yes, non-Bahamians can buy property in Grand Bahama. The Bahamas government allows non-Bahamians to purchase real estate, including land and homes, in designated areas such as Grand Bahama.
2. What are the requirements for non-Bahamians to buy property in Grand Bahama?
Non-Bahamians must obtain a permit from the Bahamas Investment Authority (BIA) to purchase property in Grand Bahama. The permit application process involves providing personal and financial information, as well as details about the property being purchased.
3. Are there any restrictions on the type of property non-Bahamians can buy in Grand Bahama?
Non-Bahamians are generally restricted to purchasing property in designated areas known as “investment properties” in Grand Bahama. These areas are typically designated for tourism, commercial, or residential development.
4. What are the steps to buying property in Grand Bahama as a non-Bahamian?
The steps to buying property in Grand Bahama as a non-Bahamian include obtaining a permit from the Bahamas Investment Authority, conducting due diligence on the property, negotiating the purchase price, and completing the necessary legal and financial transactions.
5. Are there any additional costs or taxes associated with buying property in Grand Bahama as a non-Bahamian?
Non-Bahamians purchasing property in Grand Bahama may be subject to additional costs and taxes, such as stamp duty, legal fees, and real estate agent commissions. It is important to factor in these additional expenses when budgeting for a property purchase in Grand Bahama.
