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When you’re researching purchasing property anywhere, one of the most important things to check is the property taxes. Property taxes will be due on the property for as long as you own, so it’s essential to understand what you could be paying, as well as whether that could change. If you are thinking about buying property in The Bahamas, there are taxes to consider both when purchasing property and each year when annual property taxes are due.
Purchasing Property in The Bahamas
When buying property in The Bahamas, there is Value Added Tax (VAT) to pay. This fee is 10% on all property transactions of $100,000 or more and 2.5% on properties valued at less than $100,000. This cost is usually split between the buyer and the seller unless otherwise agreed.
Annual Real Estate Property Tax Rates
Annual property taxes are also due on real estate in The Bahamas. The rates for property taxes depend on a number of factors, such as whether the property is occupied by the owner. There is an exemption for property owned by Bahamians and situated in the Family Islands. Some property approved as commercial farmland may also be exempt from some taxes. All buildings on the National Register of Historical Buildings are additionally exempt from property tax, as are properties owned by churches or charitable organizations. Properties in Freeport, Grand Bahama are also exempt from property tax. Exemptions are not automatic and need to be applied for using an Application for Tax Concession.
Property tax rates are determined by the value of the property. For owner-occupied property, the rates are as follows:
- 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, which have four units or less and are used solely as a dwelling, 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, which includes all properties with more than four units, even if they are used exclusively as dwellings, have these rates:
- 0.75% on the first $500,000 of the property value
- 2% on anything above the value of $500,000
Foreigners must also pay a property tax on 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
To pay your real property tax, which is required by law in The Bahamas, you have a choice between four options. A bill is issued each year, usually in mid-October, and is due to be paid by December 31. You can pay your property tax in several different ways.
- Visit a local bank – pay via cash, credit card, or cheque payable to The Bahamas Public Treasury (Real Property Tax)
- Pay at the Department of Inland Revenue via cash card or cheque
- Pay using a wire transfer
- Use the online portal at propertytax.gov.bs
You can choose to pay your bill in installments. It is available to pay in either quarterly or monthly installments so that you can spread the cost. When paying at the bank or at the Department of Inland Revenue, make sure you include the Real Property Tax assessment number.
If you have any problems with payments, you can speak to a Taxpayer Services Representative by calling the Department of Inland Revenue at (242) 225-7280.
If your property is mortgaged, you may be able to have your lender pay the property taxes on your behalf. They will then add the amount paid to the balance of your mortgage.
If you choose to pay your property taxes online, using the propertytax.gov.bs portal, you first need to sign in to the website and register your property. You will need to have your Assessment Number and Grid Reference Number, which you can find on your tax bill or tax certificate. The Assessment Number should be 7 digits long.
After registering, you then need to activate your account. An activation link will be sent to your email address, which will be valid for one hour. Make sure to click it before the link expires and log in to your account. You can also add further properties to your account by selecting “New” next to the word properties.
If you want to make a payment, choose the property that you want to make a payment for, then click on “Make Payment”. Choose the payment type and enter how much you want to pay. You should then enter your credit card details and choose the card source. If the source is Bahamian, you will pay in the local currency. If not, your payment will be made in US dollars. Finally, click on “Process Payment” and wait for the page to redirect you to let you know that your payment has been successful.
After making a payment, you can view the receipt for your payment and print any receipts. Go to the main dashboard, and choose the button under the receipts column. This will show you all of your payments and receipts. Under the Receipt ID column, you can click on the assessment number to view and print your receipts.
You can also print your Property Tax Certificate using the online portal. Go to the Certificates column to view or print a certificate. If the certificate is pending, it is still being processed and will appear within 24 hours.
Penalties for Non-Payment
The penalty for not paying your property tax bill on time is a 5% surcharge. Your bill is due to be paid by December 31 each year, but paying in installments can make it easier to pay. It’s also possible that a lien can be put on your property by the government if you don’t pay your bill. This could mean that you eventually lose your house after due process has taken place, assuming you continue to fail to pay the money that you owe.
Property Tax Benefits
Property tax benefits are available to some to reduce the amount that they pay. These include the Senior Citizens Benefit, which is available to people over the age of 65 who have a NIB Senior Citizens card. It allows for 50% off after the $250,000 exemption, for properties with a value that doesn’t exceed $1 million. The Full Payment Benefit is a 10% discount for anyone who pays their property tax bill in full by March 31 of any tax year.
How Property Is Assessed for Property Tax
If a property isn’t in the tax listing, it needs to be declared to the Department of Inland Revenue. A declaration also needs to be made if an improvement is made to the site. The Real Property Tax office sends inspectors out to sites to assess the property. They take measurements and photos of everything on the property that is not detached or removable, which might include structures such as pools or gazebos. You will be required to provide an occupancy certificate or conveyance or copies of your valid passport if the property is vacant.
The value of your property as assessed might change after you have made improvements. It could also change if there is a general reassessment of property value in the country for property tax purposes.
If a request is made for an assessment of the property by the owner, they must complete and submit two forms 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. Properties can be owner-occupied, residential, commercial, or vacant land.
Other Costs Involved in Buying Property in The Bahamas
It’s also important to be aware of the other costs involved in purchasing property in The Bahamas. There may be Value Added Tax on the purchase, which is usually shared between the seller and buyer. Additionally, there may be legal fees to pay. This can vary but is generally an average of around 2.5% of the purchase price.
There is also a real estate commission, but this is usually paid by the seller. This commission is 6% on an improved property and 10% on vacant land and businesses. You might also want to consider costs such as title insurance or other expenses involved in purchasing and owning a property.
When you are considering purchasing property in The Bahamas, be sure to check how much property tax will be due each year. Check that your property is registered and sign up for convenient online payment.