Bahamas: A General Business Law: Real Estate Overview

Introduction

The Bahamas has a strong real estate and investment market and has long been a focal point for many foreign and domestic investors due to its favorable climate, stable political system, strategic location and robust economy. For investors, understanding the nuances of Bahamian real estate law is crucial to navigating the market efficiently and effectively in order to maximise the opportunities and overcome any challenges as they diversify their investment portfolio.

Legislative Overview

The key pieces of legislation that govern real estate transactions in The Bahamas include:

• The Conveyancing and Law of Property Act;
• The Law of Property and Conveyancing (Condominium) Act;
• The Bahamas Vacation Plan and Time-Sharing Act;
• The International Persons Landholding Act; and
• The Real Property Tax Act.

Recent Legislative Changes Affecting Bahamian Real Estate

Conveyancing and Law of Property (Amendment) Act, 2025 (CLPA)

On 1 July 2025, amendments to the CLPA came into effect, seemingly with a view of combating the evasion of VAT in real estate transactions. The most significant amendments are as follows.

1. The definition of “conveyance” (which includes assignment, appointment, lease, settlement and other assurance made by deed, on a sale, mortgage, demise or settlement of any property) in Section 2 of the CLPA was amended to state that conveyances must not only be by deed but they must also now be duly registered.
2. The CLPA now defines “registered” as being recorded in the Registry of Records or registered in the land register in accordance with any law relating to registered land.
3. Pursuant to Section 40 of the CLPA, a VAT invoice must be obtained from the Comptroller of Inland Revenue prior to the execution of a conveyance of any real property.
4. Upon execution of the conveyance, all VAT invoiced must be paid in full within 180 days of execution of the conveyance.
5. All conveyances must be lodged for recording in the Registry of Records within 180 days from the date of execution. 
6. The parties to the conveyance, their attorneys and their real estate agents are jointly and severally liable to ensure that the VAT invoiced is paid and to report any non-compliance immediately to the Comptroller in writing.
7. No person (including a financial institution, lender or vendor) should disburse or complete any loan or mortgage transaction unless it has been verified that an invoice for VAT has been issued by the Comptroller of Inland Revenue. Failure to do so is an offence under the CLPA with the penalty being equal to the amount of unpaid VAT on the conveyance.
8. The VAT payable on the conveyance now ranks equally with any real property tax levied on the property and has priority over all security interests, proprietary rights, and claims affecting the property.
9. Pursuant to Section 40A, in order for an action to be brought relating to contracts for the sale or disposition of any interest in land, the contract must be in writing and signed by the party to be charged or by someone legally authorised on their behalf. This relates to contracts made on or after 1 July 2022.

International Persons Landholding (Amendment) Act 2024 and International Persons Landholding (Amendment) Act 2025 (IPLA)

A non-Bahamian individual or entity must obtain a “Certificate of Registration” issued by the Bahamas Investment Authority after closing a transaction where the non-Bahamian is (i) a Permanent Resident of The Bahamas or (ii) purchasing real estate in The Bahamas for the first time and intends to use the property for residential purposes, provided that the property is not undeveloped land where the non-Bahamian would become the owner of two or more contiguous acres of land.

Where (i) a non-Bahamian individual or entity holds real estate in The Bahamas and the acquisition would be their second or subsequent purchase or (ii) the purchase is for investment or commercial purposes, the non-Bahamian individual or entity would be required to obtain a “Permit” issued by the Bahamas Investment Authority prior to closing a transaction.

On 1 July 2024, the IPLA was amended to add Section 10A, which states that a Permit will expire if the holder fails, within 180 days of the date the Permit is granted, to (i) pay the applicable VAT on the conveyance, and (ii) submit a notice to the Department of Inland Revenue indicating the change in ownership, usage and other particulars related to the property, as well as to pay the real property taxes.

On 1 July 2025, the IPLA was further amended to include Section 10B, which states that where the holder of a Permit has not acquired the land or interest in land to which the Permit relates within 180 days of the grant of the Permit, the Permit shall be extended automatically for a further period of 180 days if, not less than 30 days before the expiry date of the Permit, the holder (i) completes and submits to the Investments Board a Permit Extension Notice, and (ii) produces evidence that the appropriate fee has been paid to the Public Treasury. In such case, the Permit shall be deemed to remain valid for a further period of 180 days from the expiry date, however, no Permit may be extended more than twice.

Real Property Tax (Amendment) Act, 2025 (RPTA)

Unless otherwise exempted by virtue of the RPTA, all persons who own property in The Bahamas are responsible for the payment of property taxes annually.  

On 1 July 2025, the RPTA clarified the definition of “owner-occupied property” to specify that the owner must occupy the property for a period of not less than 90 days in the year to receive an exemption from property taxes on the first BSD300,000 of the assessed value. Section 3 was also amended to state that where the property has been occupied by the owner for a period of not less than 183 days, the property tax would be capped at BSD150,000.

Further, the RPTA inserted a new definition for “derelict building” and provides that owners of derelict buildings may be eligible for a waiver in part or in whole on outstanding property taxes once (i) approved by the Chief Valuation Officer and (ii) improvements are completed so the building is no longer determined to be derelict.

Economic Permanent Residency (EPR)

Effective 1 January 2025, the minimum real estate investment required for EPR increased from BSD750,000 to BSD1,000,000. Additionally, the government fee for EPR recently increased from BSD15,000 to BSD20,000.

Current Economic Landscape

The Bahamas has continued to dominate the real estate market and has had robust activity in recent years. Its luxury residential, commercial and planned community developments and mixed-use resort developments have seen significant increases, which have contributed to continued interest from foreign investors who benefit from The Bahamas’ status as a low-tax jurisdiction (currently having no withholding, gift or inheritance taxes) while promoting a robust legal and regulatory framework heavily backed by compliance and transparency legislation. The current and future economy for The Bahamas appears strong.

Conclusion

In conclusion, to ensure compliance with local legislation and to navigate the various levels of regulations relating to investing in The Bahamas, it is important that investors seek out competent and reputable Bahamian real estate attorneys early in the process to receive sound legal advice that would not only maximise but also safeguard their investment in the Bahamian market.