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Blue Dreams 

Blue Dreams 

12.06.20

The island-hopping getaway for pleasure-seekers and sun worshippers, tax perks and competitively priced real estate are luring a new wave of expats. By Laura Henderson

Few locations boast quite the same ‘licence to thrill’ credentials as The Bahamas. James Bond author Ian Fleming, coaxed silver-tongued Sean Connery to the ‘little known’ island paradise of New Providence in 1965 for the making of Thunderball, the fourth in the celebrated 007 film series. By 1970, word had leaked out about the barefoot luxury attributes of this 700-island archipelago with a record one million sun-seekers jetting in to feel the sand between the toes for themselves.

These days however, it isn’t just a taste of the tropical high life that’s stoking investor interest in this former British colony located 180 miles off the Florida coast: but a favourable tax regime: with zero rate income tax, capital gains tax, wealth tax and VAT luring High Net Worth foreign investors looking to avoid spiralling tax burdens overseas.

“Stable government and sovereign status are among the country’s strengths as an international financial centre,” says Freda Malcolm of the Bahamas Tourist Authority. “Tourism is the country’s primary source of income, with 50% of GDP coming from the hotel and resort industry, but residency status granted to qualifying owners of property valued in excess of $500,000 is enticing foreigners, many soon-to-be-retirees, to put down permanent roots. Frequent direct BA flights from the UK to Nassau are also boosting British traffic, with a muted multi-million airport extension to include future runway expansion likely to see other major carriers opening up new routes.”

Adds Malcolm: “A record 3.9m passengers passed through Linton Pindling International Airport (LPIA) in the 12 months ending June 2019, generating increases in “virtually every major revenue category,” including a 21% increase in total year-over-year revenue to $108.2 million in 2019 compared with $89.4 million the previous year.”

Property agent Donna Laing-Jones feels pragmatic pricing is also helping to bolster inward investment: “Ten years ago over inflation defined the premium end of the market. Now, buyers looking to purchase in established locations such as New Providence and Grand Bahama are finding there’s some room for manoeuvre on price. The Multiple Listings Service (MLS) - an online database of all listed properties in The Bahamas is also helping to fast-track the property search process for foreigners who can easily browse all available homes in a single location online.”

Further signs of an uptick are the rising levels of interest for homes in the lesser-developed outer islands, just a short hopper flight from Nassau, with the scenic Abacos chain leading the way. Populated by the descendants of British loyalists fleeing the United States during the War of Independence, these low-lying coral islands lined with shallow bays are rich in history with plenty on offer beyond lazy days on the beach.

Property choice is diverse: traditional clapperboard cottages and characterful townhouses nestled alongside contemporary custom-build villas, with a sprinkling of small-scale resort communities. Says Bill Thompson of Abaco Bahamas Realty: “Overseas buyers thinking about relocation or retirement tend to go for stand-alone properties in one of the residential ‘hubs’ such as Marsh Harbour or Hope Town. Second-homers with rental returns in mind prefer the hassle-free set up of a managed resort such as Abaco Club on Winding Bay or Schooner Bay in South Abaco. The year-round season means net yields of around 6%-8% are achievable with a domestic and foreign visitor base to tap into.”

Bahamas - Fast Facts

The Bahamas population totals almost 400,000 people.  The largest city is Nassau located on New Providence. The original inhabitants of the islands were the Taino people, from the 11th century AD, believed to have migrated from South America.

The name Bahamas comes from the Spanish words of “baja mar”, meaning shallow water or sea.

The official language is English - other languages used include a Bahamian Dialect.

Bahamas was a British colony until 1973 and is now an independent nation. The Duke of Windsor was the Royal Governor of The Bahamas during from 1940 to 1945.

There is no income tax or corporate tax levied in Bahamas. It is one of the wealthiest countries in the Caribbean. After tourism, financial services constitute the second-most important sector of the economy.

Buying in the Bahamas

There are no restrictions on foreigners buying freehold property in the Bahamas.

Legal fees average around 2.5% of the property purchase price.

There is no inheritance tax, Capital Gains Tax (CGT) or wealth tax.

Foreign owners can apply for residency status. Preferential consideration of applications for permanent residence is given to investors and to qualified owners of residential property valued in excess of US$500,000.

Abode Affiliates

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