The Bahamas is a popular destination for U.S. citizens looking to own property. In fact, there’s an entire economy that revolves around buying and selling properties in The Bahamas: the country is one of the most popular places in the world to buy vacation homes.
Many U.S. citizens want to own property in The Bahamas–and they can with the best luxury real estate agents in The Bahamas–like the team at MCR Bahamas–by your side. You can live your tropical dream life while still being close enough to travel back to the States to visit family and friends when needed.
There are some great opportunities for individuals to find exactly what they’re looking for. From some of the best beaches in the world to great investment properties, there are numerous reasons that moving to The Bahamas is appealing to numerous people.
Can a U.S. Citizen Own Property in The Bahamas?
Yes, U.S. citizens can own property in The Bahamas. There is no special permit required for U.S. citizens to own property in The Bahamas and they do not need to obtain residency before buying a home.
The Bahamas are a popular destination for US citizens looking to retire abroad, relocate permanently to The Bahamas, or just vacation on a tropical island paradise. In fact, the primary reason why people want to own beachfront property here is because it has become such an attractive place for Americans seeking second homes as well as permanent residences outside of the United States, also known as expatriates.
How To Purchase Property in The Bahamas as a U.S. Citizen
Understand the taxes & finances involved
Before purchasing property, it’s important to understand what is considered taxable income and how taxes are applied. For example, if you purchase an apartment building, investment property, or vacation home and rent it out to tenants, you’ll need to pay taxes on the amount of money you collect from these tenants. You may also be required to pay capital gains tax when selling your property for a profit, as well as the annual real property tax.
Note: if you live abroad for more than 183 days in any 12-month period, this could affect your ability to claim tax exemptions on any assets held overseas, including real estate. If this is something that affects your situation, consult an accountant before proceeding with your plans.
2. Find your perfect property and put in an offer
If you’re ready to buy, it’s time to reach out and find a real estate agent who can help you navigate the process. Agents at Better Homes & Gardens MCR Bahamas are experienced with both U.S. citizens and non-residents alike.
It’s important that you convey your needs clearly to your agent so that they understand exactly what type of property you’re looking for, what your budget is, and if you’ll need a mortgage. Once your agent has gathered enough information about your priorities, he or she will recommend properties accordingly.
Before making an offer on any property, make sure that all parties agree on:
- Location: Where is the best place to live in The Bahamas for you and your family?
- Price: Picking to–and sticking to–a budget is incredibly important.
- Payment method: How much down payment can you put down? Will you be paying in cash or with a mortgage?
3. Get a mortgage if needed
If you need to take out a mortgage in The Bahamas, it’s important to realize that the bank providing your mortgage will be looking at your financial position as well as your credit history. They’ll also want to make sure that you have enough cash for a deposit and additional fees associated with buying property in The Bahamas. Your lawyer and Bahamas real estate agent should have experience with this information so you’re prepared pre-sale.
Other fees that may be associated include:
- Legal fees: While legal fees aren’t set in stone, you can expect to pay between 1 and 2.5%.
- Value Added Tax (VAT): Standard VAT is at a rate of 10% on commodities and services. VAT on real estate is a graduated tax. If the consideration is valued below $100,000, then the VAT will be held at 2.5%, anything over $100,000 has a VAT of 10%
- Stamp Duty: Stamp duty applies to real estate transactions. While you won’t have to pay capital gains later, residents pay stamp duty upon every real estate purchase. Currently, the duty is 3.5% of the property purchase price.
4. Sign the contract and complete the purchase
You’ll need to sign the contract and complete the purchase. This will transfer ownership of your property from the seller to you, and pay for it in full. In order to do this, you’ll need your passport, and often a valid driver’s license or state ID card (if applicable).
The process of purchasing property in the Bahamas is a simple one, but there are several steps you will need to take before you sign the contract and complete your purchase.
- First, make sure you have all of the required documents for buying real estate abroad. This includes a passport with at least six months’ validity remaining, proof of income (if applicable), bank statements, an attorney or agent’s contact information who can help guide through this process, and proof that you have enough funds available for closing costs.
- Second, you should know exactly what type of property it is that you want to buy, where it is located on land in relation to other nearby houses/buildings/etc., how much land comes with it and what size house sits on top of it—in short: all possible details about this particular property should be understood by all parties before proceeding with the purchase.
- Thirdly, ensure all necessary paperwork is complete–whether this means making sure mortgage arrangements are in place or having spoken directly with an attorney so they can review everything before signing.
5. Register your investment
When you’re ready to register your property in The Bahamas, there are two steps. First, your attorney will prepare a deed of trust—a legal document that establishes ownership of the property and registers it with the government of The Bahamas.
The second step is to submit this deed of trust with all required fees and other documents to The Bahamas Investment Authority for registration. Applicants can expect to pay an application fee of $200, which can be paid at the Public Treasury offices throughout the islands.
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Benefits of Purchasing Property in The Bahamas as a U.S. Citizen
From appealing tax benefits to a laid back or active lifestyle benefits, relocating to The Bahamas has many advantages that are just too hard to beat.
An excellent tax benefit of owning property in The Bahamas is that there are no property taxes. This is especially beneficial when you consider that U.S. citizens who own property in the United States pay an average of 2% per year in real estate taxes.
Additionally–and perhaps more importantly for many American investors–income received from Bahamian sources are completely tax free for U.S. citizens residing outside of The Bahamas (and vice versa). If a U.S citizen does not reside within The Bahamas but does work there on a temporary basis, then only half their income will be taxed at a flat rate of 7.5 %.
The Bahamas offers a wide array of recreational activities. You can enjoy beaches and water sports, or play golf in one of the country’s many golf courses. You can also fish, go boating and sailing, visit casinos, or take advantage of the family-friendly activities available.
There are many restaurants and bars to choose from in The Bahamas, as well as shopping centers where you can find everything from souvenirs to household items. If you enjoy nightlife, there are plenty of clubs offering live music or even DJs playing house music late into the night.
There’s also an active expat community that lives part-time or full-time in The Bahamas; these individuals have created their own social groups which meet regularly for monthly events such as dinner parties hosted by friends from across the island.
Citizenship is not included in the property purchase. In order for one to become a citizen of The Bahamas, they must meet the following guidelines:
- They should be 18 years or older
- They need to have lived in The Bahamas for at least five years out of the last seven years prior to applying for citizenship status
- They must demonstrate that they have sufficient income and assets (over $300k USD)
In addition to meeting these requirements, there are several benefits associated with being able to call yourself a Bahamian citizen:
- You can travel without needing visas or passports to almost 180 countries around the world.
- You can own property anywhere within The Bahamas’ jurisdiction without paying taxes on it as long as it is greater than 250 square feet in size. This includes land plots and homes located on them! Some people also choose not to pay taxes over their vehicles because they live here but work elsewhere, such as abroad.
- Your children will automatically receive citizenship once they turn 18 years old if they were born within The Bahamas’ borders; however, this doesn’t include children who were born abroad unless both parents had their baby inside those same borders too.
Do note, there is no dual citizenship in The Bahamas: if you’d like to be a citizen of The Bahamas you would have to renounce your U.S. citizenship.
Conclusion: Own Property in The Bahamas as a U.S. Citizen
The Bahamas is a beautiful island country with a lot to offer. So if you’re looking for an opportunity to own property in The Bahamas as a U.S. Citizen, it’s definitely possible and well worth the effort. The benefits of owning property in The Bahamas are numerous and include tax benefits, lifestyle benefits, and more.
Better Homes & Gardens MCR Bahamas can help make the process of buying your dream home in The Bahamas stress free and easy. Our agents are experienced and knowledgeable with helping U.S. citizens purchase the right luxury property for you in the world’s best tropical oasis.