Stamp Duties / Taxes

The Government Stamp Tax on Property Conveyances

The Government Stamp Duty (tax on the conveyance of real property). This is a graduated tax. The total amount of the tax is calculated as follows:

• When the value of the consideration is less than or equal to $20,000, the rate is 4%
• When the value of the consideration is greater than $20,001 and is less than or equal to $50,000, the rate is 6%
• When the value of the consideration is greater than $50,001 and is less than or equal to $100,000, the rate is 8%
• When the value of the consideration is greater than $100,001, the rate is 10%

The usual practice in the Bahamas is for the tax to be shared equally between buyer and seller unless otherwise agreed upon.

First time buyers may be exempted from stamp tax on a dwelling house or vacant land purchased for a dwelling house, up to the value of $500,000.

Real Property Tax

The statutes provide for a general assessment of real property by the Chief Valuation Officer of the Commonwealth of the Bahamas. This applies to Bahamians and non-Bahamians owning real property in the Bahamas not exempt from taxation as indicated in “Remarks”. “Bahamian” is defined as a citizen of The Bahamas or a company registered under The Companies Act in which at least 60% of the shares are owned beneficially by Bahamians. The returns are due on or before December 31 each year and must be filed with the Chief Valuation Office.

Owners must file a Declaration of Real Property. The return must be signed by the owner and witnessed by an “authorized person”, defined as a magistrate, attorney, registered medical practitioner, bank officer, minister of religion, justice of the peace or notary public within the Bahamas or similar person outside of the Commonwealth. Such forms may be obtained from the Chief Valuation Officer.

Property is assessed before October 15. The Chief Valuation Officer, if it appears that any property subject to assessment has not been assessed, may assess the property retroactively to a maximum of 10 years at the required amount.

The Chief Valuation Officer is required to publish before October 15 (once in the Gazette and once in a daily newspaper published and circulated in The Bahamas), a notice stating that:

1. Copies of the assessment lists are available to the public at the Treasury and office of the Chief Valuation Officer;
2. Assessment notices for each owner of property liable to tax are available at places specified in the notice,
3. Five days after the notice’s publication, a notice of assessment is deemed served on every owner of property subject to tax.
4. A notice of assessment may be sent by mail to any owner of property by the Chief Valuation Officer after publication in the Gazette
5. Any other matters deemed necessary by the Chief Valuation Officer, with the Minister’s approval.

Objection to a notice of assessment must be made in writing to the Chief Valuation Officer, within 30 days of service of the notice, stating grounds upon which the objection is made. The Chief Valuation Officer may request that the tax levied be paid in whole or in part at the time of objection.

Taxes are due within 60 days of the date on which the assessment notice is deemed to have been served. Also, payment of one or more quarterly installments must be made within those 60 days. These payments should be made to the Public Treasury in Bahamian or US dollars, preferably as a bank draft or international postal order. Personal cheques are not accepted unless bank certified. Foreign cheques must be bank-certified and drawn on a bank in the US or The Bahamas.

Rates of Taxes

The rates of tax on real property are as follows:

In respect of owner-occupied property:

• The first $250,000 of market value is tax exempt
• More than $250,000 and not exceeding $500,000 of market value is ¾%
• More than $500,000 and not exceeding $5,000,000 of market value is 1%
• More than $5,000,000 of market value is .25%

In respect of unimproved property other than unimproved property exempt by virtue of Section 39 of the Real Property Tax Act:

• First $7,000 of market value is $100
• More than $7,000 of market value 1½%.

In respect of any other property:

• First $500,000 of market value is 1%
• More than $500,000 of market value is 2%

Market value is defined as the amount the property would realize, if sold in the open market, without any encumbrances or restrictions. If the return is not filed, the owner is guilty of an offense, and upon conviction thereof, may be fined. Persons knowingly making false statements may be liable to fines, imprisonment, or both fines and imprisonment. If the tax is not paid on or before the last day the tax becomes due, a surcharge will be added.

In the case of an extension of time, the Chief Valuation Officer may postpone the date on which the tax is payable in a particular case, by notice in writing.

Exemptions

Property owned by Bahamians and situated in the Family Islands is exempt from property tax. Property approved as commercial farm land (by the Minister of Agriculture and Marine Resources, and the Minister Finance) may be eligible for property tax exemptions.

Unimproved property owned by Bahamians, meaning property without physical additions or alterations, or any works benefitting the land which have not increased the market value thereof by $5,000 or more;

Places of religious worship; school buildings and their gardens and playing areas;

Property owned by foreign governments;

Property owned by foreign nations used for consular offices or residences of consular officials and employees;

Property used exclusively for charitable or public service from which no profit is derived