HALSBURY
CHAMBERS
What you have to do to purchase property in the Bahamas
depends on who is purchasing and whether or not you own property in the Bahamas
already.
1.
Intent of Purchase:
If you do not
own property in the Bahamas already, and you want to purchase a piece of
property in your own individual name, then you will qualify for a Certificate
of Registration, which can be obtained after your purchase is completed. This application must be made to the
Bahamas Investments Authority. The
property being purchased must not be commercial property, must be less than 5
acres and it can not be titled in the name of two or more persons who are not
related (i.e. the persons must be husband and wife or brother and sister/parent
and child (with the same last name), etc.) or a company.
If the
property is commercial property and is being purchased by a company or
unrelated persons or consists of more than 5 acres, then a Permit is
necessary. This has to be obtained
from the Investments Board before the purchase is complete.
2.
Requirements:
The
application for the Permit and Application for the Certificate of Registration
requires that the following be submitted to the Investments Board in support of
the same:-
(a) Copy of National Photo Identification (Passport, Driver’s
Licence, etc.);
(b) Police Record/Certificate from Country of residence;
(c) Character Reference;
(d) Copy of Site Plan of land being acquired/purchased –
this will normally be attached to the Agreement for Sale or the title documents
for the property;
(e) Bahamas Immigration Status (confirm if you have permanent
residency status or any other status in the Bahamas);
(f) Social Security Number/National Identification Number –
please provide this information by e-mail, telefax or in a separate letter;
(g) Evidence of payment of real property taxes for the property
being purchased – this is normally secured by the Attorney representing
the Vendor and provided to the Purchaser’s Attorney;
(h) A Certificate of Incorporation/Registration if applicant is a
Bahamian Registered Company or a foreign company registered under the foreign
company provisions of our Companies Act;
(i) Financial Reference – normally obtained from a
bank/financial institution with which the Purchaser has been dealing with for
at least 3-5 years;
(j) Source of Wealth – a letter obtained from the bank/financial institution
holding the account in the name of the Purchaser, which will be utilized as the
source of funds for the purchase of the property – this letter will be
provided to you in a standard form by the Attorney for the Purchaser and should
be printed on the bank’s letterhead and addressed to the Investments Board, if
a Certificate of Registration is being obtained.
(k) The Purchaser will also be required to complete a Know Your
Client/Client Profile Form for submission to his Bahamian Attorney.
3.
Transfer of Title on Death:
If property is
purchased in the name of an individual, there are no transfer taxes on death in
the Bahamas. On the death of the
owner, the only thing that will have to be done is to probate the Estate. If the property is purchased by joint
owners, then the surviving joint owner will automatically be the sole surviving
owner of the property. No
probate of the deceased owner’s estate is necessary. On the death of the last joint owner, however, his estate
will have to be probated. If the
property is purchased as tenants-in-common then on the death of one tenant,
that person’s share of the property will devolve upon the person entitled
thereto under the last will and testament of the deceased tenant or according
to the laws of intestacy, if he died intestate (without a Last Will and
Testament).
4.
If Title is held by Company:
If the property is purchased in the name of a Bahamian
Company, then we wish to point out the following:-
1. The cost to incorporate a company is US$2,500.00;
2. The annual costs to maintain the company is US$1,300.00;
3. Shares have to be issued in the company – and these
will devolve upon the person entitle thereto upon the death of the shareholder
under the provisions of the Last Will and Testament of the deceased or the laws
of intestacy (if the deceased died without a Last Will and Testament).
4. If shares are transferred, taxes are payable on such transfer
(see below).
5. If the property is transferred to the owner of the company,
taxes are also payable (see below).
Some persons
have opted to form a company in the Country where they live (i.e. United
States) and have this company registered under the foreign company provisions
of the Companies Act in the Bahamas.
The costs for this is also $US $2,500.00. Once the company is registered then it can own land or
shares in the Bahamas. The Central
Bank of The Bahamas will require the same information as set out above for the
Shareholders of this company.
In any event,
the Company whether it is a Bahamian Registered Company or a Foreign Company
registered under the Foreign Company provisions of the Companies Act, will have
to be in existence before it can enter into an Agreement for Sale to purchase
Bahamian property. If you are in a
rush to pay a deposit and secure the purchase of the property, the Agreement
for Sale can be entered into by an individual with the right reserved therein
to assign the same. The benefit of
the Agreement for Sale can then be assigned to the Company once it has been
established.
The only
advantage to having a company is that there is limited liability protection (no
one can go beyond the veil of incorporation if they choose to sue the owner of
the property, in an attempt to attach the owner’s personal assets. This is usually the case where the
property is being used as commercial (i.e. rental) property and is constantly
rented out for profit.
5. Legal Fees and Stamp Duty:
With regard to
legal fees and disbursements for property transfers, the same are as follows:-
The legal fees
are normally 2.5% for each party – Vendor and Purchaser. Where the Attorney acts for both
parties (where the title to the property is straight forward), this is normally
reduced to 2% for each side.
The Stamp Duty
rates are as follows:-
$0.01 to
$20,000.00 – 2%
$20,000.01 to
$50,000.00 –
4%
$50,000.01 to
$100,000.00 – 6%
$100,000.01 to
$250,000.00 – 8%
$250,000.01
and Over – 10%
The normal
procedure for a property transaction is that the Vendor and Purchaser each pay his/her/its
own legal fees and one half of the stamp duty on the transaction. The commission is normally payable by
the Vendor. This is all subject to
agreement between the parties and can be set up differently if they so desire.
Should you
have any questions regarding the above, please do not hesitate to contact us
Halsbury Chambers at 242-393-4551 or Telefax Number 242-393-4558
Halsbury Chambers
Commercial Law
Group
