faq - idm

Here are the answers to most of your frequently asked questions:

What are the closing customs?
What is the document of conveyance?
What is the document of encumbrance?
What are the foreclosure procedures?
What are the closing costs?
What is the transfer tax?
What is the mortgage tax?
What is the leasehold tax?
What are the real estate taxes?
Can foreign nationals own property in The Bahamas?
What are the notary requirements?
How are documents recorded?
Are there Dower rights?
What title insurance forms are used?
What is the currency of The Bahamas?

What are the closing customs?

Real estate closings are conducted by Attorneys.

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What is the document of conveyance?

Indenture of Conveyance.

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What is the document of encumbrance?

Residential transactions - Mortgage (similar to U.S. deed of trust), Commercial transactions - Debenture and Mortgage.

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What are the foreclosure procedures?

Mortgagee has statutory power of sale under which the mortgagee may convey the fee without judicial foreclosure. Foreclosure procedures can also be used.

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What are the closing costs?

Closing costs, exclusive of title insurance premium, include attorneys fees, applications to the Central Bank for Approved Investment Status and to the Investments Board for a Certificate of Registration or Permit, recording fees, etc. Including title insurance, closing costs are approximately 3 ½ to 3 ¾ percent of the purchase price.

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What is the transfer tax?

A: Conveyance- (4% to $20,000.00; 6% from $20,001.00 to $50,000.00; 8% from $50,001.00 to $100,000.00; 10% from $100,001.00 to $250,000.00; 12% if 250,001.00 or more).
B: Mortgage- 1% of consideration
C: Debenture- 1% of consideration

Stamp duty is generally split between vendor and purchaser.

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What is the mortgage tax?

Stamp duty is 1% of the loan amount.

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What is the leasehold tax?

Dependent upon terms of the lease.

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What are the real estate taxes?

Paid yearly in advance. Land in the Freeport/Lucaya area of Grand Bahama is exempt from real property tax until the year 2015.

In the case of owner-occupied property the real property tax is 1% of the market value up to $500,000 and 1 ½% of the value in excess of $500,000.

In the case of unimproved land the tax is 1% of the value up to $100,000 with a minimum tax of $30. The rate for value in excess of $100,000 is 1 ½%.

In respect of any other property any value up to $500,000 is taxed at a rate of 1%; on value in excess of $500,000 the rate is 2%.

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Can foreign nationals own property in The Bahamas?

Under the International Persons Landholding Act, 1993, all alien land holdings must be registered. A permit issued by the Investments Board is required for any acquisition of residential property of 5 or more contiguous acres or any commercial property by any alien person or corporation that is not Bahamian owned. A Certificate of Registration is required for smaller residential property. In addition, investments by non-Bahamians funded from a foreign source should receive approval from the Central Bank of The Bahamas.

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What are the notary requirements?

The notarization of documents executed outside of the Commonwealth must be proved by an Apostille in the case of countries which are signatories to the Hague Convention. In other cases the authentication process will vary.

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How are documents recorded?

All documents of transfer or incumbrance of real estate should be recorded at the Registry of Records.

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Are there Dower rights?

The law of Dower remains in force in The Bahamas with time limitations.

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What title insurance forms are used?

Standard ALTA (1992) Policies with our Bahamas Endorsement.

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What is the currency of The Bahamas?

The Bahamian dollar, which has been historically pegged to the U.S. dollar.