Buying Land In The Bahamas Is Now Easier For Non-Bahamian Citizens

The repeal on the 1st January, 1994 of The Immovable Property (Acquisition by Foreign Persons) Act drew a sigh of relief from many attorneys and real estate agents. For years, these Professionals had complained that the Act made the acquisition of land in The Bahamas by foreign persons cumbersome and that it acted as a deterrent to legitimate investment.

REGISTRATION

The International Persons Landholding Act 1993 encourages foreigners or Companies owned by them to purchase a second home in The Bahamas as this area was thought to have the most significant potential. If a foreigner acquires a single family dwelling or vacant land to be used in the construction of such a dwelling then he no longer need obtain a permit prior to the purchase. He need only register the acquisition subsequently.

Permanent residents of The Bahamas and foreigners who inherit property in The Bahamas are now treated more kindly. In neither case are they to obtain a permit before acquiring land but must merely register subsequently.

PERMIT

The foreigner will require a permit however if (1) the property is undeveloped land and of five or more contiguous acres in size or (2) the property is not a private residence, or is not intended for development as such.

Failure to obtain a permit will render the acquisition null and void but the foreigner will be entitled to recover all monies paid in consideration of the acquisition less and legitimate deductions. If a permit has been granted for the acquisition of land and the intended usage changes then the permit must be varied by the Board otherwise it will be invalid.

A registration certificate or permit must be included along with the title documents to be recorded in the Registrar General's Office otherwise the recording will be null and void.

MORTGAGES

The new Act is not intended to be a stumbling block for legitimate credit transactions. It provides that licensed banks, trusts and insurance companies who acquire an interest in or take possession of property under the terms of a mortgage or debenture are exempt from obtaining a prior permit. However, any foreign person or entity going into possession as a mortgagee or acquiring land under a Court Order must register that acquisition or fact of possession. Acquisition by way of foreclosure under a mortgage or of land acquired by an authorized foreign state will not require a permit but must be registered.

LEASES

Foreigners are not required to obtain permits or register leases or letting agreements unless they are for trade or business purposes and the term can exceed 21 years.

INCENTIVES

In line with its policy of actively encouraging foreign investment, the government has included in this Act a provision that a foreigner no longer pays a double rate of stamp duty. He now pays the same single rate as a Bahamian.

Furthermore, a foreigner who owns a home in The Bahamas may now obtain an annual home owner resident card upon application and payment of a fee to the Director of Immigration. The card authorises the entry of the holder and that of his immediate family and also their stay in The Bahamas provided that there are no restrictions for policy reasons or under the Immigration Act.

The contents of this article are intended to provide a general guide to the subject matter. Advice should be sought about specific circumstances.