Sales Commissions

What are the costs involved in buying or selling property?

A typical sale, which is called a "Gross Sale", assumes that the vendor will be responsible for the payment of:

1. The Purchaser will be responsible for:

   1. 1/2 of the Government Stamp Tax as set out above,
   2. The purchaser's legal fees as detailed above. This fee includes the lawyers Opinion on the title to the property.
   3. Recording fees ($3.50 per page) on the conveyance and other closing documents which need to be recorded.
   4. Payment of the permit under the International Persons Landholding Act if applicable.

In the event that the sale is a "Net Sale" the purchaser would be responsible for payment of all of the above-mentioned fees.

Schedule of BREA Commission Rates, "Minimum Rates" Sales Commissions

All Real Estate Commissions in the Bahamas are based on the total gross sales price of property, not on equities or partial payments.

BUSINESS OPPORTUNITIES
10% of total sales price, including inventory. If property is also sold at time of sale of business, use applicable rate for property.

CAR PARKS
10% of total sales price.

DEFERRED SALES COLLECTIONS
On collection of deferred payments, 2 1/2% of the amount collected. When the broker has a mortgage service agreement, this condition need not apply. The minimum charge is $1.00 per collection.

FARMS, GROVES, UNPLOTTED LAND
10% of total sales price. Minimum commission is $100.

IMPROVED PROPERTY
6% of total sales price.

LEASEHOLD
For the selling of leaseholds, the charge shall be 6% of any consideration, paid by the purchaser for the leaseholds plus the regular brokerage commis- sion on the unexpired portion of the lease, calculated as a new lease.

OUT ISLAND SALES
8% of total sales price on improved property. 10% of total sales price on unimproved/vacant property.* 15% is applied in Grand Bahama

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:

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

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 as 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 Officer of the Commonwealth of The Bahamas. Owners are required to 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 the Commonwealth. Such forms may be obtained from the Chief Valuation Officer. Property is assessed before October 15. The Chief Valuation Officer may, if it appears that any property subject to assessment has not been assessed, within the next 10 years, assess the property. The Chief Valuation Officer is also 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:

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 acceptable.

Rates of Taxes

The rates of tax on real property are as follows:

In respect of owner-occupied property: The first $250,000 is tax exempt.

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

In respect of any other property:

"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 up to $3,000. Persons knowingly making false statements may be liable upon conviction to a fine of up to $3,000 or six months imprisonment, or both fine and imprisonment. If the tax is not paid on or before the last day the tax becomes due, a 10% surcharge is 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 Ministers of Agriculture, Trade and Industry and Finance) is eligible for property tax exemptions.

Also exempt from property tax are: