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Moving to The Bahamas has a number of benefits and perks. Beside the near-perfect, beautiful weather all year round and the vast number of great outdoor activities, there are some tax incentives that make the move to The Bahamas even more appealing.
Understanding real estate property tax in The Bahamas is an excellent starting point if you’re interested in living in The Bahamas or even buying an investment property there.
Whether you’re interested in buying a home in Nassau or a beautiful condo on one of the most breathtaking beaches The Bahamas has to offer, a skilled agent at Better Homes and Gardens MCR Bahamas can help you understand The Bahamas Real Property Tax and how it might impact your future Bahamas purchase.
What is The Bahamas Real Property Tax?
The Bahamas Real Property Tax is sometimes referred to as Bahamian property tax. It is imposed on all real property in The Bahamas and applies to both commercial and residential properties.
The Bahamas Real Property Tax Act (RPT Act) lists the categories of real property, which include undeveloped land, land with buildings, and condominiums. It’s a measure of the value of your property. Properties are assessed for the purpose of imposition of Bahamian property tax and taxes therefore must be paid annually either by an individual, a corporation, or a partnership.
However, there can be exemptions from taxation for certain types of real property owned by Bahamian corporations or partnerships.
Purpose of Real Property Tax in The Bahamas
In 1969 legislation was passed–with amendments made since–by the government to collect a real property tax. It was created to help the country meet its local needs for inland revenue, and to assist with financing services such as infrastructure maintenance, garbage collection, public servants, road repairs and maintenance, healthcare, armed forces, and capital development.
Who pays Real Property Tax in The Bahamas?
All real estate interests owned by non-residents in the Bahamas are required by law to pay property tax. There are four categories of real property that must be declared and assessed for Real Property Tax in the Bahamas:
- Owner-occupied: The owner must reside in their property for at least six months annually, and uses property exclusively as a dwelling
- Residential: The property is not owner-occupied and has four units or less which are used solely as a dwelling and from which no commercial enterprise is conducted
- Commercial: Includes all properties with more than four units, even if they are used exclusively as dwellings
- Vacant Land : Foreigners must also pay a property tax on unimproved, vacant land.
Who is exempt from Real Property Tax?
Owners or properties eligible for exemption from The Bahamas real property tax include:
- Any properties owned by churches or charitable organizations
- All buildings on the National Register of Historical Buildings
- Property owned by Bahamians and situated in the Family Islands
- Some property approved as commercial farmland (by the Ministers of Agriculture, Trade and Industry and Finance) may also be exempt from some taxes
- Properties in Freeport, Grand Bahama are also exempt from property tax
- Any property owned by a foreign entity, such as by diplomats and embassies
- For those 65 and older, after a $250,000 exemption, a 50% discount on balance of home value not exceeding 1 million dollars
- Bahamians on vacant land
Exemptions are not automatic and need to be applied for using an Application for Tax Concession.
How much is Real Property Tax in The Bahamas?
Real property tax in The Bahamas varies depending on the type of property, who owns the property, and the value of the property.
How is “Real Property” determined?
Property tax rates are determined by the value of the property, including land and improvements (paved areas, attachments, buildings). The property value and related taxes are based on an assessment that must be completed by an inspector from the Real Property Tax office.
Details about the property will be collected during a field visit, at which time photos and measurements will be taken of everything that is not removable or detached on the property, like structures such as pools or gazebos. After the inspection, the office will calculate the real property tax liability based on the gathered information and will either write the owner to inform them of their tax liability or will prepare and issue a tax bill.
This property value is subject to change, pending any improvements you make to your property or based on future reassessments of property value in the country. This assessment can be requested by the owner of the property, or by the Real Property Tax Valuation Unit.
If an owner requests an assessment of the property, two forms must be completed and submitted to the Real Property Tax Valuation Unit. These are the Property Tax Application Assessment Form and a Declaration of Real Property Tax Form. If the property is owner-occupied, the owner must also complete an Affirmation form for tax exemptions on the section that they live in.
How do you calculate Real Property Tax?
Real property tax varies depending on the property.
- For owner-occupied property, the rates are:
- No tax is due for the first $250,000 of the market value
- Between $250,001 and $500,000 of the market value – tax rate of 0.625%
- Over $500,001 – tax rate of 1% on the remaining value
Total Real Property Tax payable for any owner-occupied residential property is capped at $60,000 per annum.
- For residential properties, the rates are:
- A flat $300 fee on the first $75,000 of the property
- 0.625% on the value above $75,000
- Commercial properties, have the following rates:
- 0.75% on the first $500,000 of the property value
- 2% on anything above the value of $500,000
- Vacant Land
- This includes a $100 flat fee on the first $7,000 of the property, as well as a 2% rate on the remaining value of the property.
How to pay Real Property Tax in The Bahamas
The Bahamas wants to make it easy for you to pay the Real Property Tax. With a set deadline and various options for payment, you’ll need to make sure to pay this tax every year.
When is the Real Property Tax due?
Real Property Tax bills are issued annually in mid-October and are due and payable once produced. If the bill is not paid by December 31st of any tax year, a 5% surcharge penalty will be applied.
Need a little more time or to spread out your payments? The good news is payment plans are available, with approval from the Department of Inland Revenue. When making your payment, you have the option of making your payments in installments (after receiving approval) or in full by the deadline.
Keep in mind, if the tax bill is not paid by the deadline, it is possible that a lien can be placed upon your property by the treasurer of the government and after due process, if still unpaid, the property can be taken by the government and sold to recover any overdue taxes owed.
How can I pay for Real Property Tax?
Whether paying your Bahamas property tax online or in person, you have several options to choose from. The turn-around processing time for a payment is immediate and upon receipt the payment will show on the owner’s account.
Payment options include:
- Using the online portal at propertytax.gov.bs
- Visit the Department of Inland Revenue (on Carmichael Road). Payments can only be made using debit/credit cards (visa/mastercard), or cheques made payable to The Bahamas Public Treasury (Real Property Tax)
- Go to any local Royal Bank of Canada. Payments can be made via cash, credit card, or cheque made payable to The Bahamas Public Treasury (Real Property Tax)
- Pay via a wire transfer
As a convenience, personal checks are accepted as a form of payment, but a bounced check will result in a $30.00 additional fee.
If you choose to pay your Bahamas Property Tax online, make sure to sign in and register your property first. You will need to have both your Grid Reference number and Real Property Tax assessment number (which should be 7 digits long).
After completing your registration online, you will be sent an account activation link to your email, which will only be valid for one hour. Once your account is activated, you can add additional properties to your account as needed, or make your payment.
If you currently have a mortgage on your property, you may qualify for your lender to pay the property taxes on your behalf, but the amount paid will be added back into the balance of your loan.
Real Property Tax payment requirements
When making your payment the property owner’s name, account number, and property assessment number will be required, and all answers on your declaration form must be true, correct and show current market value.
Related forms for Real Property Tax
- Tax Bill Inquiry
- Tax Bill Inquiry (printable version)
- Reduction in Tax for Pensioners
- Affirmation Form (printable)
- Commercial Questionnaire
- Residential Questionnaire
- Property Tax Application for Assessment
- Declaration of Real Property Tax
- Declaration Form Guide
The following documents must be submitted to The Department of Inland Revenue as it relates to Real Property Tax.
- National Insurance Board Number
- Property Owner’s name
- Valid ID, i.e. Passport
- Deed of ownership
- Property Conveyance or Current Appraisal
Conclusion: Get Support with Your Bahamas Property Journey
It’s clear to see why moving to The Bahamas is a desirable choice. From the crystal clear blue waters to the friendly communities, The Bahamas truly embody the laidback, island lifestyle that many people want to experience.
Relocating to The Bahamas doesn’t have to feel overwhelming! Familiarizing yourself with the immigration process, economic policies, and real estate property taxes are the first steps you can take in your journey to moving to The Bahamas.
And the knowledgeable team at Better Homes and Garden MCR Bahamas can help you do just that! Our talented agents understand the stress moving can cause and will help make the process as seamless and stress free as possible!