REAL PROPERTY TAXES
Real property taxes are assessable on all real estate in the Bahamas, unless the owner is exempt. All property must be declared at the Department of Inland Revenue (a division of the Ministry of Finance) in order to be assessed.
Bahamians are not required to pay real property taxes on undeveloped land, or on real estate in the Family Islands. Non-residents are required to pay taxes on all real estate interests in The Bahamas.
Property taxes are typically billed in mid-October and are due by 31st December, for the following year. The Department of Inland Revenue has the right to appraise and re-assess the value of any property that it deems to have increased in value. The maximum property tax assessable per year is $50,000.
It is incumbent on the owner of the property to ensure that the taxes are paid on or before they are due. Payments may be made to the Public Treasury in either Bahamian or United States currency. Failure to pay taxes on time will result in a surcharge of 5% per annum until payment.
Outstanding property taxes create a first charge on the property by statute. Property taxes should be current at the time of any transfer of ownership. If the property is transferred with outstanding taxes remaining due, the new owner will become liable for the outstanding taxes. When a transfer of ownership is complete, the Department of Inland Revenue must be notified of the change in ownership. At this time an owner-occupied affirmation is submitted, if applicable. Property is deemed to be owner-occupied if the owner occupies and resides in the property exclusively on a permanent or seasonal basis.
REAL PROPERTY TAX (AMENDMENT) ACT 2015
The most recent amendment to the Real Property Tax Act was on 1st July, 2015. The highlights are as follows:
- Residential property is added as a new category of taxable property. This designation will assist Bahamian citizens who own multi-family residences. (See rates in table below). Residential property is defined as:
“any property, that is not owner-occupied, comprising not more than four units, exclusive of outbuildings, beneficially owned by a citizen of The Bahamas, used solely as a dwelling place and from which no commercial enterprise is conducted”.
- Several tax rate reductions (See table below).
- Bahamian pensioners are now entitled to a fifty percent reduction on the balance of taxes due with respect to his or her dwelling home after the owner-occupied exemption has been deducted. The dwelling home must be owned and occupied by the pensioner. This amendment applies to Bahamian citizens who are eligible for National Insurance retirement benefits or are over the age of sixty-five years. The reduction is only applicable up to $1,000,000 in value. If the value exceeds $1,000,000, the full tax liability will apply to the portion in excess of the cap.
- A ten percent reduction on the tax will be granted if taxes are paid in full on or before March 31st in any year.
- A tax exemption is provided for property owned by a non-profit company incorporated for the purpose of promoting religious objects.
The current real property tax rates are as follows:
| OWNER-OCCUPIED PROPERTY | |
|---|---|
| First $250,000 | Exempt |
| $250,000 – $500,000 | ⅝ of 1% (Reduced from ¾ of 1% effective 1st January 2016). |
| Above $500,000 |
1% on the part of the market value in excess of $500,000 |
| **For first time homeowners an RPT exemption may be obtained for the first five years of ownership for properties not exceeding $500,000 in value | |
| RESIDENTIAL PROPERTY |
|
| Less than $75,000 | $300.00 |
| Above $75,000 | ⅝ of 1% on the assessed value. |
| COMMERCIAL PROPERTY | |
| First $500,000 | ¾ of 1% (Reduced from 1% effective 1st January 2016). |
| Above $500,000 | 2% on the part of the market value in excess of $500,000 |
| VACANT LAND | |
| Under $7,000 | $100.00 |
| $7,000 or more | 1.5% |
The information provided herein is not comprehensive and is not intended to be a substitute for legal advice and services.
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