A second home in The Bahamas has been a highly sought-after commodity for international buyers from time immemorial. The Bahamas is an archipelagic nation of 700 islands and cays, with each island providing its own charm and unique Bahamian culture. As the value of real property in the jurisdiction tends to hold or gradually appreciate over time, the purchase of real property remains a viable and attainable wealth-creating mechanism.
Bahamian real property is commonly held by a company which is incorporated in The Bahamas or another jurisdiction whose shares may be held by an individual or their nominee. A 'beneficial owner' is any person who is beneficially interested in the real property, including a beneficiary under a trust. This article considers the tax consequences of transferring Bahamian real property held by a company for estate planning purposes.
Restrictions on both domestic and international travel, lockdowns and curfews have been imposed in The Bahamas to restrict movement in an attempt to reduce the spread of COVID-19. While law firms have had to close their physical doors to the general public, real estate and resort development attorneys have embraced new and efficient procedures for closing transactions.
The government recently announced an ambitious rental assistance programme to assist tenants who have been economically affected by COVID-19 and are unable to satisfy their contractual obligation to pay rent. However, many pundits have questioned the legality of rental assistance during a state of emergency.
To encourage the rebuilding effort in Abaco, Grand Bahama and the surrounding Cays after Hurricane Dorian, tax relief is now available under the Disaster Reconstruction Authority (Special Economic Recovery Zone) (Relief) Order 2019. This article examines the tax relief available with regard to real property.
In the 2019/2020 Budget Communication the government announced various tax reforms which came into effect on 1 July 2019. Among other things, the cap on owner-occupied property has increased from B$50,000 to B$60,000 per year and stamp duty on real property has been replaced by value added tax (VAT) at the same rates. Further, any party that is required to become a VAT registrant must have a business licence.
The Bahamas has an unregistered land system that is based on the conveyancing laws of England and Wales issued before 1925. Therefore, deeds and documents should be recorded in the Registry of Records in The Bahamas as soon as possible. Priority becomes particularly important in high-net-worth commercial and condominium development transactions.