BAHAMAS – With the government’s recent approval of a 2 percent reduction in the country’s stamp tax, there has never been a better time to invest said Rachel Pinder, principle broker at Island Living Real Estate.
The stamp tax, which was originally set at 12 percent in 2010, was reduced to 10 percent for all properties worth more than $250,000.
“When the stamp tax was first introduced at 12 percent, it was coupled with an increase in annual property taxes and we experienced a significant decease in buyers, both foreign and local,” the Bahamas rentals agent said.
While the government’s intention was to generate instant revenue, their plan didn’t work, said Pinder. Instead, we had buyers pulling out of contracts during the largest slump in the real estate industry. We needed this reduction to stimulate the market and bring investors back to the islands.
However, for first time homebuyers who are Bahamians, permanent residents of the Bahamas or anyone holding a Bahamian work permit, there is an exemption to the stamp tax that they may apply for. To qualify, the buyer must be purchasing a property worth less than $500,000 that they will use exclusively as the primary residence for a minimum of nine months each year. Income producing properties do not qualify for such exemptions.
“The exemption for residents is a great option, as it eases the burden of having to pay an extra 2 percent on closing fees,” the Nassau properties professional said.
In addition to the tax decrease, the Bahamas also offers automatic approval of all purchases by foreign investors through the Bahamas’ International Persons Landholding Act of 1993.
“I believe the islands are now in a great place to attract buyers,” said the broker who offers apartments for rent in Nassau. “And with our properties now listed on the Realtor.com International website, we expect to see an increase in foreign investors.”
About Island Living Real Estate
Island Living Real Estate has more than 25 years of experience in real estate sales and rentals throughout the Bahamas. Island Living’s main office is located in one of Nassau’s oldest historic buildings on Bay Street, named “Red Roofs.” Red Roofs was built in 1896 and has been home to various families, a Gourmet Deli and now Island Living.
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