- Islands in The Bahamas for Sale: How to Buy a Bahamas Island - December 19, 2022
- Bahamas Real Estate: The Ultimate Guide - November 9, 2022
- The Ultimate List of Facts & Statistics about The Bahamas - November 6, 2022
The Bahamas is a coveted destination for international tourists, business professionals, and aspiring residents and citizens. While the Bahamas islands feature countless luxurious hotels, resorts, and short-term rentals, you might be curious about more long-term investment property opportunities, and want to know:
- What’s the average price of real estate in The Bahamas?
- Is Bahamas property affordable by U.S. standards?
- What kind of taxes do you have to pay as a foreigner purchasing Bahamian real estate?
Here at MCR Bahamas, we’re delighted to help hundreds of natives and expats interested in real estate for investment, a vacation home, or even commercial development. But before you invest, it’s essential to learn more about Bahamian prices and whether your dream location is affordable.
You’ll find that the real estate market is hot, but influenced by many factors like demand, location, and beach proximity.
Today, we’ll explore The Bahamas’ real estate market, performance, and everything influencing property prices.
What is the average cost of a home in The Bahamas?
The average price of real estate in The Bahamas is about USD 3 million. But don’t feel discouraged if that’s outside your budget. The substantial amount of high-priced luxury real estate raises the national average home price.
If you’re looking for luxury villas and mansions, The Bahamas doesn’t disappoint. In the exclusive Lyford Cay neighborhood alone, properties can reach as high as $40,000,000.
But if you’re looking for something more affordable, our team of skilled real estate agents is happy to help.
Bahamas Real Estate Market: Average Bahamas Property Prices
Given the above factors that influence Bahamian real estate, you’ll find a wide range of property prices depending on the neighborhood, city, island, and even property type.
Here’s the average price of real estate in The Bahamas by location:
|Location in The Bahamas||Average Property Price|
Keep in mind that the highs and lows for each area vary greatly. You can certainly find something in the low hundreds of thousands for homes in Nassau – as well as the high millions.
But what dictates those fluctuations in real estate price?
Factors Driving Real Estate Prices in The Bahamas
Bahamian real estate covers a large range. Usually, location is a top factor, with luxury communities like Lyford Cay and Cable Beach offering more expensive homes. But beach access is also a key determiner.
Let’s explore some factors driving the Bahamas’ real estate prices in more detail:
- Location: Mega-tourist hotspots like Cable Beach and luxury developments in Lyford Cay along the beach will cost you more than, say, an inland, isolated cottage in Grand Bahama. Some more affordable Bahamian real estate destinations include Cat Island, Nassau outskirts, and Andros Island.
- Beach access: Who doesn’t want beach access? One rule of thumb in The Bahamas is beachfront properties will cost you more. For example, beachfront Bahamian property prices in one luxury Nassau development cost almost USD 5,000,000 more than inland homes.
But, experts still find that despite Bahamian inflation, beachfront homes in The Bahamas are cheaper than the equivalent in Florida. If you can afford it, the luxury of beach proximity is unmatched.
However, depending on your budget, the price surplus might not be worth it. Luckily you’re never too far away from a beach in The Bahamas.
- Demand: According to Forbes, 2021 was one of the busiest, high-performance years in The Bahamas’ real estate market. Shorter supply pumps up prices, so high-demand periods influence the market.
The Economic Health of the Bahamas
The Bahamas has a relatively strong economy, heavily based on tourism. Unfortunately, like many other countries, The Bahamas took a hit during COVID, resulting in a loss of tens of thousands of jobs and an overall near $10-billion loss. But, the economy and real estate market is jumping back up and experts predict a full recovery by 2024.
The Bahamas is also the richest country with one of the strongest economies in the entire Caribbean, with The Bahamas’ economy boasting:
- Overall GDP: $11.21 billion
- GDP per capita: $28,239.40
- Unemployment rate: 13.7%
Pros and Cons of Owning Property in The Bahamas
- Rental Income Potential: The Bahamas has an average monthly rental price of about $3,000 — keep in mind that’s likely for year-long leases. If you’re in the short-term rental market, you can earn that in a week, depending on the listing. And if you work with a great real estate agency or rental management company, renting your property can be very straightforward.
- No Income Tax: The Bahamas doesn’t tax rental income — a novelty in the Caribbean. The typical tax rate for rental income ranges between 10-20%, while some countries creep even higher, like St. Vincent (30.58%!). In fact, the Bahamas is referred to as a tax neutral country or tax haven.
Rental Income Tax Rates Caribbean
Moreover, The Bahamas won’t tax your overall income if you become a resident. So you can bring in income from the U.S. if you own a business or work online–and receive rental income, and pay zero income tax on it.
This is a win-win for both family homeowners and landlords. Families keep more of their income to save or spend as they see fit, while landlords enjoy fewer expenses on their business.
- Sure Path to Permanent Residency: Any foreigner can purchase Bahamian property to obtain permanent residency. The only catch? The home must be worth at least $750,000, or the property must be a commercial development that employs Bahamians.
- High Quality of Life: Beaches, sunshine, watersports, palm trees, need we say more?
- Stable Government and Economy: Overall, The Bahamas is one of the wealthiest Caribbean countries with a stable government. The government is democratic and respects resident, citizen, and tourist civil liberties.
- Maintenance: Bahamian homeowners can spend a decent amount on home maintenance due to extreme weather and ocean-side living.
- High Stamp Duty and Transaction Costs: While The Bahamas has no income tax, it applies a 2.5% stamp duty to every property purchase. However, first-time homebuyers might achieve exemption. Depending on the property type, you’ll also be subject to a 10% real estate tax and hefty closing costs.
- “Locked-in” vacation destination: It’s common to want to get your money’s worth by flying to The Bahamas for every vacation, which might feel limiting to those who crave travel elsewhere. Our advice? Holiday in The Bahamas a couple of times before you buy, and consider renting out your property when you’re away!
- Higher mortgage rates: If you’re borrowing money for your mortgage in The Bahamas, be prepared for higher interest rates compared to the U.S.
FAQs on Bahamas Real Estate Prices
Is The Bahamas a good place to buy property?
All in all, The Bahamas is a fantastic place to purchase property for many scenarios. You’ll reap many benefits regardless of whether you use the property as a rental, commercial space, or family vacation home.
With an average of $3,000 in rental prices, The Bahamas real estate market is undoubtedly lucrative for landlords. Moreover, minuscule income tax makes it a great investment opportunity, offering the potential to earn much more from the property and your general income (should you obtain residency).
Can a U.S. citizen buy a house in The Bahamas?
Yes! Citizens from the U.S. and virtually anywhere else in the world can buy a house in The Bahamas. The country’s International Persons Landholding Act 1993 permits international buyers (even non-residents) to invest in all sorts of Bahamian properties.
The best part? You don’t even need a permit, unless the property:
- Surpasses two acres
- Hosts commercial development or rentals
Read our full guide to U.S. citizens buying property in The Bahamas.
Is real estate expensive in The Bahamas?
It depends where you look. Some Bahamian waterfront properties can range in the tens of millions, while more modest apartments in neighborhoods less popular among tourists can be as low as $100,000.
Conclusion: Find Luxury Homes for Sale In The Bahamas
Owning Bahamian real estate is a pleasure for many of our clients. They adore the investment and income potential, tax benefits, and of course — the unparalleled laidback lifestyle of the beautiful Bahamas.