Country Guide

Buying a Private Island in The Bahamas

The Bahamas is, for many buyers, the most straightforward jurisdiction in which to own a private island outright. Foreign freehold is expressly permitted, the legal framework is codified, and title is well understood. The nuances lie in the difference between a simple registration and a full permit, and in what the Crown does not sell.

A jurisdiction that permits foreign ownership

Unlike many island nations, The Bahamas allows non-Bahamians to own land in freehold. The governing statute is the International Persons Landholding Act 1993, which came into force on 1 January 1994 to facilitate the holding of land by non-Bahamians and by companies under their control. The Act did away with the general requirement for a permit on ordinary residential purchases and replaced it with a lighter registration regime, reserving permits for defined categories. The result is a system that is welcoming to foreign buyers while retaining oversight of larger and commercial acquisitions.

Permit versus registration

The Act draws a practical line between two paths. Most residential acquisitions require only registration after closing: a single-family home or condominium for the buyer's own use, and undeveloped land of less than two acres intended for the construction of a residence, fall into this category. Registration is completed with the Investments Board and is essentially a recording exercise, though it should not be skipped, as it perfects the buyer's position under the Act.

A prior permit is required where the acquisition is of a different character: undeveloped land exceeding two acres, property intended to generate rental or commercial income, or a commercial development. For many private islands — which are, by nature, undeveloped and well over two acres — this means a permit application rather than mere registration, submitted to the Investments Board with supporting documentation. As a broad orientation, the process runs to something like a month or two once a complete file is in, though larger or more complex projects take longer.

The Home Owner's Residence Card

A non-Bahamian who owns a home may apply to the Director of Immigration for an annual Home Owner's Residence Card. The card entitles the owner, together with a spouse and minor children, to enter and remain in The Bahamas for the period of its validity. It is not permanent residence or citizenship, and it does not confer the right to work, but for many island owners it provides convenient, renewable access tied directly to ownership. It is applied for and renewed on payment of a fee.

Crown land and the seabed

A defining feature of Bahamian island ownership is what remains with the Crown. Crown land accounts for a large share of the country, and the Government's settled policy is to preserve the seabed and much foreshore for the Crown, granting leases rather than sales over the marine domain. On a private cay, this has two consequences worth checking carefully. First, on some islands only part of the land is privately held and available for sale, with the balance being Crown land that is not part of the transaction — a survey and title review will establish exactly what is being conveyed. Second, anything touching the seabed or foreshore — docks, marinas, moorings or reclamation — is dealt with by Crown lease or grant rather than freehold, and those approvals are separate from the land purchase itself.

Taxes and duties, in orientation

The Bahamas levies no income tax, no capital gains tax and no inheritance tax, which is a large part of its appeal. The principal transaction cost is Value Added Tax on the conveyance. Where the buyer is a foreign person or entity, VAT on the conveyance is charged at a flat 10% of the consideration, with no bracketed scale and no reduced band — the graduated lower rates apply only to Bahamian buyers and qualifying residents. By custom, buyer and seller often agree to share the conveyance tax equally, though this is a matter for negotiation rather than law. Legal fees are typically in the region of a couple of percent, and real estate commission is a further cost.

On an ongoing basis, real property tax is assessed annually according to the property's classification and value, with foreign-owned and non-owner-occupied property assessed differently from owner-occupied Bahamian homes. Short leases carry their own stamp duty. As always, the specific rates and any current exemptions should be confirmed at the time of the transaction.

Practical steps

In sequence: establish precisely what is being sold, including whether any part of the cay is Crown land, and commission a current survey and title search; determine whether the acquisition needs a permit or only registration, and file accordingly with the Investments Board; agree the split of VAT and other costs in the sale agreement; complete the conveyance through Bahamian attorneys; register the acquisition; and, where useful, apply for the Home Owner's Residence Card. Any marine works should be scoped early, as they engage the Crown as a separate counterparty.

General orientation only, current as of 2024 and not legal or tax advice; Bahamian law — including the Landholding Act framework, VAT and property tax rates — evolves. Confirm the current position and your structure with qualified Bahamian counsel before acting. Enquiries: the enquiry form.