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Bahamas Islands Real Estate Comparison: Where to Invest in 2026

The Bahamas comprises 16 major islands, each offering unique real estate investment opportunities. This comprehensive comparison helps international investors choose the right island based on tax benefits, rental yields, infrastructure, and lifestyle.

While Nassau (New Providence) is the capital, Grand Bahama leads the Bahamas in foreign direct investment due to its tax-free zone under the Hawksbill Creek Agreement. This guide compares Grand Bahama, New Providence, Abaco, Eleuthera, and Exuma for real estate investment potential in 2026.

Key factors we compare:

  • Tax benefits and investment incentives
  • Rental yields and ROI potential
  • Property price ranges
  • Infrastructure and connectivity to the US
  • Residency qualification requirements
  • Market status and growth potential
Luxury_Villa_Paradise_Island small
3 Paradise Island resort development—oversupplied vacation rental market creates competition and seasonal vacancy, unlike Grand Bahama's employer-driven demand.
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2 Abaco waterfront home under reconstruction—limited turnkey properties and 20-30% higher construction costs make Grand Bahama's ready inventory more attractive.
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1 Waterfront duplex in Lucaya with private dock and pool—built for Port of Freeport professionals earning 8-10% tax-free rental yields.

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Bahamas Islands Investment Comparison Table

This side-by-side comparison highlights the key differences between the five major Bahamas islands for real estate investment:

Feature Grand Bahama New Providence Abaco Eleuthera Exuma
Tax-Free Zone ✅ Yes (Hawksbill Creek) ❌ No ❌ No ❌ No ❌ No
Proximity to US 55 miles (45 min) 185 miles (1h) 180 miles (1h) 200 miles (1h 15m) 250 miles (1h 30m)
Avg. Rental Yield 8-10% 5-7% 6-8% 4-6% 5-7%
Property Price Range $250K-$2M $400K-$5M+ $300K-$3M $200K-$1.5M $500K-$10M+
International Airport ✅ Yes ✅ Yes ✅ Yes ✅ Yes ✅ Yes
Major Employers Port, Shipyard, Cruise Lines Government, Tourism, Finance Marina, Tourism Tourism Tourism, Luxury Resorts
Residency Qualification $1M+ $1M+ $1M+ $1M+ $1M+
Best For Tax-free income, Build-to-Rent Capital city living Boating, marinas Quiet luxury Ultra-luxury, tourism
Market Status 🟢 Undervalued 🔴 Overpriced 🟡 Recovering 🟢 Emerging 🔴 Premium

Key Takeaway: Grand Bahama is the only island with a tax-free zone, the lowest residency threshold, and the highest rental yields—making it the clear winner for real estate investors seeking passive income and tax optimization.

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Robert & Linda Martinez

Houston, Texas | Retired & Earning Passive Income

"We looked at Florida, Turks & Caicos, and all the Bahamas islands for our retirement investment. Grand Bahama won hands down. We're 45 minutes from Fort Lauderdale, so we can fly over for long weekends. Our waterfront duplex in Lucaya is rented to a Carnival executive—zero vacancy in 18 months. We're earning $4,200/month ($50,400/year) on a $550K investment, that's 9.2% tax-free. In Florida, we'd pay 25% federal tax on that income. Grand Bahama saves us $12,600/year in taxes alone. Plus, we qualified for home owner residency. Best retirement decision we ever made."

Investment: $550K waterfront duplex in Lucaya | Tenant: Carnival Corporation Executive | Yield: 9.2% | Vacancy: 0 days in 18 months

Grand Bahama Villa_4_Contemporary_From_Water
1 Modern canal-front home in Freeport's tax-free zone—zero income tax, zero capital gains tax, zero property tax under the Hawksbill Creek Agreement.
Grand Bahama Villa_Cottage_Terrace_View
2 Waterfront Cottage in Lucaya with private dock and pool—built for Port of Freeport professionals earning 8-10% tax-free rental yields.
Grand Bahama VillaModern_From_Canal
3 Grand Bahama Shipyard employs 1,200+ highly paid expatriates requiring long-term housing—guaranteeing year-round tenant demand and 95%+ occupancy.
Grand Bahama Villa_1_Traditional_Canal_View
4 Port Lucaya Marina and beachfront—just 55 miles from Florida, offering Caribbean lifestyle with 45-minute access to Miami.

Grand Bahama: #1 for Tax-Free Real Estate Investment

Grand Bahama stands alone as the Bahamas' premier real estate investment destination, offering a unique combination of tax benefits, guaranteed rental demand, and undervalued market pricing that no other island can match.

Why Grand Bahama Leads the Bahamas in Foreign Investment

The Hawksbill Creek Agreement Advantage: Signed in 1955, this agreement established Freeport as a tax-free zone with zero income tax, zero capital gains tax, zero property tax, and zero inheritance tax. This makes Grand Bahama the only Bahamas island where real estate investors can earn 100% tax-free rental income and capital gains.

Build-to-Rent Model with 8-10% Annual Yields: Grand Bahama's economy is driven by major employers—Port of Freeport, Grand Bahama Shipyard, Carnival Corporation, and MSC Cruises—that employ over 3,000 highly paid expatriates requiring long-term housing. This creates guaranteed tenant demand and consistent 8-10% annual rental yields, far exceeding the 5-7% typical in Nassau or other islands.

Undervalued Market with Growth Potential: Following Hurricane Dorian (2019), Grand Bahama's real estate market remains undervalued compared to pre-storm levels, offering investors entry at 20-30% below peak pricing. With ongoing infrastructure investment and economic recovery, early investors are positioned for significant appreciation over the next 5-10 years.

Better Residency Threshold: Grand Bahama gives you more property and higher yields for the same $1M residency investment. 

Proximity to Florida: Located just 55 miles from the Florida coast, Grand Bahama is a 45-minute flight from Miami or Fort Lauderdale. This makes it the closest Bahamas island to the US, ideal for investors who want easy weekend access to their properties.

Grand Bahama Real Estate Investment Highlights

  • Tax Benefits: Zero income tax, capital gains tax, property tax, inheritance tax
  • Rental Yields: 8-10% annual returns (vs. 5-7% in Nassau, 4-6% in Eleuthera)
  • Property Prices: $250K-$2M (vs. $400K-$5M+ in Nassau, $500K-$10M+ in Exuma)
  • Tenant Demand: Guaranteed long-term tenants from Port, Shipyard, Cruise Lines
  • Residency: $1M investment qualifies for Permanent Residency, any investment qualifies for Home Owners Card
  • Currency: USD-pegged (Bahamian dollar = US dollar, zero FX risk)
  • Market Timing: Undervalued post-Dorian, strong appreciation potential
  • Infrastructure: International airport, deep-water port, modern utilities

Investment Example: A $500,000 waterfront duplex in Lucaya generates $3,500/month in rent ($42,000/year) for an 8.4% gross yield—100% tax-free. The same property in Nassau would cost $800,000+ and yield only 5-6% after taxes.

Explore Current Grand Bahama Real Estate Opportunities →

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Sarah & David Chen

Toronto, Canada | Achieved Bahamas Permanent Residency

"We initially looked at Nassau and Exuma, but the numbers didn't make sense. Grand Bahama's home owners card was easy, and the rental yields were significantly higher. We qualified for permanent residency in 6 months while earning 8.5% tax-free returns. The proximity to Miami (45 minutes!) means we can visit our property on long weekends. Christoph and Pamela's local knowledge and access to off-market properties saved us months of searching."

Investment: $899K waterfront home in Freeport | Status: Permanent Residency Approved | Yield: 8.5%

Nassau_Golf_Villa_4_Sunset_Oceanview
1 Nassau harbor and cruise port—while tourism-focused, Nassau lacks Grand Bahama's tax-free zone and guaranteed tenant base from industrial employers.
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2 Paradise Island resort development—oversupplied vacation rental market creates competition and seasonal vacancy, unlike Grand Bahama's employer-driven demand.
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3 Nassau's Cable Beach luxury condos—premium pricing ($800K-$3M+) delivers 5-7% yields, significantly lower than Grand Bahama's 8-10% returns.
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4 Downtown Nassau financial district—capital city infrastructure and urban amenities come at 60-100% higher property prices than Grand Bahama.

New Providence (Nassau): Capital City Premium

New Providence, home to Nassau (the Bahamas' capital), is the most populated island with approximately 70% of the country's residents. While it offers the best infrastructure and urban amenities, it comes at a significant premium—and lacks the tax advantages that make Grand Bahama the superior investment choice.

New Providence Real Estate Overview

Nassau is the political, financial, and commercial center of the Bahamas. The island hosts government offices, international banks, luxury resorts, and the country's busiest cruise port. For investors seeking an urban Caribbean lifestyle with access to high-end shopping, dining, and entertainment, New Providence delivers—but at a cost that often exceeds comparable US markets.

Investment Considerations for New Providence

Advantages:

  • Best Infrastructure: Lynden Pindling International Airport with direct flights to 30+ US cities, modern hospitals, international schools, and extensive retail/dining options
  • Largest Rental Market: Highest population density creates demand for both long-term and short-term rentals
  • Financial Hub: Home to international banks, law firms, and financial services—attracting high-income expat professionals
  • Tourism Activity: Cable Beach and Paradise Island attract millions of visitors annually, supporting short-term rental demand
  • Established Market: Mature real estate market with transparent pricing and professional services
  • Residency: $1M investment qualifies for Permanent Residency, any investment qualifies for Home Owners Card

Disadvantages:

  • No Tax-Free Zone: Unlike Grand Bahama, Nassau does not benefit from the Hawksbill Creek Agreement—investors pay standard Bahamas taxes (though still no income/capital gains tax nationwide)
  • Overpriced Market: Property prices 60-100% higher than Grand Bahama for comparable properties ($400K-$5M+ vs. $250K-$2M)
  • Lower Rental Yields: 5-7% average yields vs. 8-10% in Grand Bahama due to higher purchase prices
  • Crowded & Congested: Traffic, crime concerns in certain areas, overdevelopment in prime zones
  • Market Saturation: High competition from luxury resorts (Atlantis, Baha Mar) and Airbnb oversupply in tourist areas

New Providence vs. Grand Bahama: The Numbers

Metric New Providence Grand Bahama
Avg. Waterfront Home Price $1.2M $650K
Avg. Annual Rental Yield 5-7% 8-10%
Residency Investment Requirement $1M $1M
Distance from Miami 185 miles (1 hour) 55 miles (45 min)
Tax-Free Zone Status ❌ No ✅ Yes
Market Status Overpriced Undervalued

Who Should Invest in New Providence?

New Providence may be suitable for investors who:

  • Prioritize urban lifestyle and amenities over investment returns
  • Want to live full-time in the Bahamas (not just earn rental income)
  • Require proximity to government offices or financial services
  • Are willing to pay premium prices for established infrastructure
  • Don't prioritize tax optimization or maximum rental yields

However, for investors focused on ROI, tax-free income, and appreciation potential, Grand Bahama offers superior value.

Investment Reality Check: A $1.2M waterfront home in Nassau generates approximately $6,000/month in rent ($72,000/year) for a 6% yield. The same $1.2M invested in two Grand Bahama properties ($600K each) generates $10,000/month combined ($120,000/year) for a 10% yield—and both are 100% tax-free under the Hawksbill Creek Agreement.

Compare: Why Grand Bahama Outperforms Nassau →

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Klaus Müller

Munich, Germany | Build-to-Rent Investor

"As a German investor, I compared all Bahamas islands extensively. Exuma was too expensive and seasonal, Nassau overcrowded and overpriced. Grand Bahama offered the best combination: tax-free income, guaranteed tenants from major employers, and Christoph's German understanding of precision and transparency. My property was rented from day one—to a Shipyard manager with a 3-year contract. 10% yield, tax-free. It doesn't get better than this."

Investment: $899K waterfront duplex | Tenant: Grand Bahama Shipyard Manager | Yield: 10.1%

Abaco_Property_1_Colonial small
1 Marsh Harbour marina infrastructure—Abaco's boating lifestyle attracts sailing enthusiasts, but Hurricane Dorian (2019) left limited move-in-ready inventory.
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2 Beachfront Villa in Hope Town; lighthouse and harbor—charming expat community rebuilding post-Dorian, but 6-8% yields and slow recovery lag Grand Bahama's stable market.
Abaco_Property_3_Waterfront_Cottage_small
3 Treasure Cay beach and marina—pristine beauty and tight-knit community, but higher insurance costs (6-10% annually) and uncertain rental demand.
Abaco_Property_4_Clifftop_Modern_small
4 Abaco waterfront home under reconstruction—limited turnkey properties and 20-30% higher construction costs make Grand Bahama's ready inventory more attractive.

Abaco: The Boating Capital (Recovering from Hurricane Dorian)

Abaco, located in the northern Bahamas, has long been known as the "Boating Capital of the Bahamas" due to its extensive marina infrastructure, protected waters, and vibrant sailing community. However, Hurricane Dorian's direct hit in September 2019 devastated the island, and the real estate market remains in recovery mode—making it a speculative investment compared to Grand Bahama's stable, employer-driven rental market.

Abaco Real Estate Overview

Abaco consists of Great Abaco and Little Abaco islands, along with several smaller cays. The main towns—Marsh Harbour, Hope Town, and Treasure Cay—were historically popular with American boaters and expats seeking a laid-back, nautical lifestyle. Pre-Dorian, Abaco had a thriving vacation rental market and strong property values driven by marina-front real estate.

Investment Considerations for Abaco

Advantages:

  • Marina Infrastructure: Over 1,000 boat slips across multiple marinas (Boat Harbour, Treasure Cay, Hope Town) attract boating enthusiasts from the US East Coast
  • Tight-Knit Expat Community: Strong sense of community among American and Canadian expats who have rebuilt post-Dorian
  • Natural Beauty: Pristine beaches, protected Sea of Abaco waters ideal for sailing, world-class bonefishing
  • Direct US Flights: Marsh Harbour Airport offers flights to Florida, making access relatively easy
  • Lower Competition: Reduced inventory post-Dorian means less competition for quality properties
  • Residency: $1M investment qualifies for Permanent Residency, any investment qualifies for Home Owners Card

Disadvantages:

  • Hurricane Dorian Devastation: Category 5 storm destroyed 75%+ of structures; many areas still rebuilding 5+ years later
  • Limited Inventory: Severe shortage of move-in-ready properties; most require significant renovation or new construction
  • Slow Recovery: Rebuilding hampered by supply chain issues, labor shortages, and insurance challenges
  • No Tax-Free Zone: Unlike Grand Bahama, Abaco does not benefit from special tax incentives
  • Uncertain Rental Market: Tourism and vacation rental demand still recovering; long-term tenant pool is small
  • Higher Insurance Costs: Post-Dorian, hurricane insurance premiums have skyrocketed (often 6-10% of property value annually)
  • Construction Challenges: Building costs 20-30% higher than Grand Bahama due to limited contractors and material shipping costs

Abaco vs. Grand Bahama: The Numbers

Metric Abaco Grand Bahama
Avg. Waterfront Home Price $500K-$1.5M (limited inventory) $400K-$1M (ready inventory)
Avg. Annual Rental Yield 6-8% (uncertain demand) 8-10% (guaranteed tenants)
Hurricane Risk High (direct Dorian hit 2019) Moderate (Miami-Dade standards)
Insurance Costs (Annual) 6-10% of property value 2.5-3.5% of property value
Major Employers Marinas, small tourism Port, Shipyard, Cruise (3,000+ jobs)
Residency Investment Requirement $1M $1M
Tax-Free Zone Status ❌ No ✅ Yes
Market Status Recovering (5+ years post-Dorian) Stable & Growing

Who Should Invest in Abaco?

Abaco may be suitable for investors who:

  • Are passionate boaters seeking marina-front property and sailing lifestyle
  • Have a long-term investment horizon (10+ years) and can wait for full market recovery
  • Are willing to take on construction/renovation projects (limited turnkey options)
  • Want to be part of a tight-knit expat community rebuilding together
  • Can afford higher insurance costs and accept hurricane risk
  • Don't require immediate rental income or guaranteed tenant demand

However, for investors seeking stable rental income, lower risk, and immediate cash flow, Grand Bahama's employer-driven market is the superior choice.

Investment Reality Check: A $700K marina-front home in Abaco (if you can find one) may sit vacant 40-50% of the year due to limited long-term tenant demand, generating 6-7% yields in a good year. A $700K waterfront duplex in Grand Bahama rents to Port of Freeport or Shipyard employees year-round at 9-10% yields—with zero vacancy risk and 100% tax-free income.

The Boating Lifestyle Without the Risk: Grand Bahama offers excellent boating, fishing, and marina access (Lucaya Marina, Port Lucaya) plus guaranteed rental income from major employers. You get the Caribbean lifestyle and investment security—without waiting years for market recovery.

Why Grand Bahama Offers Better Yields Than Abaco →

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Brandon Cooper

San Diego, California | Tech Entrepreneur | 3 Properties

"I'm 34 and sold my SaaS company last year. I wanted to diversify out of stocks and into real estate, but California prices are insane—$2M for a condo that yields 3%? No thanks. I researched Caribbean real estate for 6 months: Cayman Islands (too expensive), Turks & Caicos (good but no tax zone), Exuma (beautiful but seasonal income), Nassau (oversaturated). Grand Bahama checked every box: undervalued market, tax-free zone, guaranteed tenants from Port/Shipyard, 45 minutes from Miami. I bought three properties through CPH Invest—all off-market deals I'd never find on Zillow. Total investment: $1.8M. Annual rental income: $168,000 (9.3% yield), 100% tax-free. My tenants are Port managers and MSC executives with multi-year contracts. Zero vacancy risk. I'm building a portfolio that'll fund my retirement in 20 years—all tax-free."

Investment: 3 properties ($1.8M total) | Annual Income: $168,000 (9.3% yield) | Tenants: Port of Freeport & MSC Cruises managers

Eleuthera_Beach_Villa_3_Cottage_small

Eleuthera: Quiet Luxury & Emerging Market

Eleuthera is a long, narrow island (110 miles long, 1 mile wide) located east of Nassau, known for its pink sand beaches, laid-back atmosphere, and authentic Bahamian culture. While it offers natural beauty and lower property prices than Nassau or Exuma, Eleuthera's limited infrastructure and small rental market make it better suited for vacation homes and retirees—not investors seeking strong rental income.

Eleuthera Real Estate Overview

Eleuthera's real estate market is characterized by affordable beachfront land, charming colonial-era cottages, and a growing number of boutique developments targeting eco-conscious buyers. The island attracts visitors seeking tranquility and authenticity rather than luxury resorts or nightlife. Popular areas include Harbour Island (upscale), Governor's Harbour (central hub), and Cape Eleuthera (southern tip with marina and resort).

Investment Considerations for Eleuthera

Advantages:

  • Lower Property Prices: Beachfront land and homes starting at $200K-$500K, significantly below Nassau or Exuma pricing
  • Natural Beauty: Famous pink sand beaches (Harbour Island), pristine coastline, excellent snorkeling and diving
  • Authentic Bahamian Culture: Less commercialized than Nassau or Paradise Island; strong local community and traditions
  • Peaceful Lifestyle: Ideal for retirees or those seeking a quiet Caribbean escape without crowds
  • Emerging Market: Growing interest from eco-tourism and wellness-focused developers
  • Direct US Flights: North Eleuthera Airport and Governor's Harbour Airport offer connections to Florida
  • Harbour Island Premium: The upscale enclave of Harbour Island (accessible by water taxi) commands higher prices and attracts affluent visitors
  • Residency: $1M investment qualifies for Permanent Residency, any investment qualifies for Home Owners Card

Disadvantages:

  • Limited Infrastructure: Few grocery stores, limited medical facilities, inconsistent utilities in remote areas
  • Small Rental Market: Low population (8,000 residents) and limited tourism mean weak long-term rental demand
  • Low Rental Yields: 4-6% average yields due to seasonal vacation rental market and limited year-round tenants
  • No Major Employers: Economy based on small-scale tourism, fishing, and agriculture—no large companies providing stable tenant pool
  • Seasonal Demand: Vacation rentals perform well December-April but struggle in summer/fall (hurricane season)
  • No Tax-Free Zone: Unlike Grand Bahama, Eleuthera does not benefit from special tax incentives
  • Limited Resale Liquidity: Smaller buyer pool means properties can take 12-24 months to sell
  • Property Management Challenges: Few professional property managers; remote locations require hands-on oversight

Eleuthera vs. Grand Bahama: The Numbers

Metric Eleuthera Grand Bahama
Avg. Beachfront Home Price $350K-$800K $400K-$1M
Avg. Annual Rental Yield 4-6% (seasonal) 8-10% (year-round)
Population 8,000 53,000
Major Employers Small tourism, fishing Port, Shipyard, Cruise (3,000+ jobs)
Vacancy Risk High (50-60% off-season) Low (95%+ occupancy)
Residency Investment Requirement $1M $1M
Tax-Free Zone Status ❌ No ✅ Yes
Infrastructure Limited (basic services) Modern (port, airport, schools)
Best Use Case Vacation home, retirement Rental income investment

Who Should Invest in Eleuthera?

Eleuthera may be suitable for investors who:

  • Want a personal vacation home or retirement property (not rental income)
  • Prioritize peace, quiet, and authentic Bahamian culture over amenities
  • Are comfortable with limited infrastructure and services
  • Can accept 4-6% yields and seasonal vacancy (50%+ off-season)
  • Don't require immediate liquidity (properties take longer to sell)
  • Are attracted to pink sand beaches and natural beauty over economic fundamentals

However, for investors seeking consistent rental income, strong yields, and guaranteed tenant demand, Grand Bahama is the clear winner.

Investment Reality Check: A $500K beachfront cottage in Eleuthera might rent for $2,000/month during high season (December-April = 5 months = $10,000) but sit vacant May-November. Annual income: $10,000 = 2% yield. The same $500K invested in Grand Bahama generates $3,500/month year-round ($42,000/year) = 8.4% yield—100% tax-free—with zero vacancy risk thanks to Port and Shipyard tenants.

The Peaceful Lifestyle With Income: Grand Bahama's Lucaya district offers the same tranquil beachfront lifestyle as Eleuthera—pristine beaches, low density, authentic culture—plus modern infrastructure, guaranteed rental income, and tax-free returns. You don't have to sacrifice income for peace.

Compare Rental Yields: Grand Bahama vs. Eleuthera →

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Schmidt Family

Hamburg, Germany | Family Investment & Second Home

"We spent two years searching for the perfect Caribbean property—both as an investment and a family vacation home. Nassau was too expensive and crowded, Exuma too remote for the kids. Grand Bahama offered the perfect balance: modern infrastructure (international school, hospital, supermarkets), only 45 minutes from Miami, and tax-free rental income. Christoph and Pamela guided us through the entire process—from property search to financing to residency application. Our waterfront villa in Lucaya is rented 10 months per year to a Shipyard director ($5,800/month), and in February/March we use it ourselves with the kids. 8.7% yield, tax-free, plus appreciation potential. And the kids love it—beach, snorkeling, dolphins. Better than any vacation home in Spain."

Investment: $800K waterfront villa in Lucaya | Tenant: Grand Bahama Shipyard Director | Yield: 8.7% | Personal Use: 2 months/year

Exuma_Beach_Villa_4_Luxury_Modern_small

Exuma: Ultra-Luxury & Celebrity Destination

Exuma is an archipelago of 365 cays located southeast of Nassau, famous for its stunning turquoise waters, swimming pigs at Big Major Cay, and ultra-luxury celebrity estates. While Exuma offers unparalleled natural beauty and prestige, its real estate market caters to ultra-high-net-worth individuals seeking vacation homes—not investors focused on rental income and ROI.

Exuma Real Estate Overview

Exuma's real estate market is dominated by luxury villas, private island estates, and high-end resort developments. Properties range from $500K condos to $50M+ private islands. The market attracts celebrities, billionaires, and wealthy families seeking exclusive Caribbean retreats. Great Exuma (the main island) hosts the capital George Town, while the Exuma Cays offer ultra-private island living.

Investment Considerations for Exuma

Advantages:

  • Stunning Natural Beauty: Crystal-clear waters, world-class beaches, Exuma Cays Land and Sea Park (protected marine reserve)
  • Prestige & Exclusivity: Celebrity neighbors (Johnny Depp, Tyler Perry, Faith Hill & Tim McGraw own islands), ultra-luxury developments
  • Tourism Appeal: Famous swimming pigs, Thunderball Grotto (James Bond filming location), luxury resorts attract high-end visitors
  • Yachting Destination: Popular superyacht destination with excellent marinas and provisioning services
  • Direct US Flights: Exuma International Airport offers daily flights to Miami, Fort Lauderdale, Atlanta
  • Strong Vacation Rental Demand: High-end vacation rentals can command $1,000-$5,000+ per night during peak season
  • Appreciation Potential: Ultra-luxury market has shown strong appreciation in prime locations
  • Residency: $1M investment qualifies for Permanent Residency, any investment qualifies for Home Owners Card

Disadvantages:

  • Extremely High Prices: Entry-level properties start at $500K; luxury estates $2M-$10M+; private islands $10M-$50M+
  • Low Rental Yields: 5-7% average yields due to high purchase prices and seasonal demand
  • Vacation Home Market: Most buyers purchase for personal use, not investment—limiting rental income potential
  • No Major Employers: Economy based entirely on tourism; no industrial or commercial base providing long-term tenants
  • Seasonal Demand: Peak season (December-April) drives most revenue; summer/fall occupancy drops significantly
  • No Tax-Free Zone: Unlike Grand Bahama, Exuma does not benefit from special tax incentives
  • High Operating Costs: Luxury properties require expensive maintenance, staffing, utilities, and insurance (3-5% of property value annually)
  • Limited Long-Term Rental Market: Wealthy vacation home owners don't rent long-term; local workforce can't afford luxury rents
  • Resale Challenges: Ultra-luxury properties have a small buyer pool; can take 18-36 months to sell

Exuma vs. Grand Bahama: The Numbers

Metric Exuma Grand Bahama
Avg. Beachfront Home Price $1.5M-$5M+ $400K-$1M
Avg. Annual Rental Yield 5-7% (seasonal vacation rentals) 8-10% (year-round tenants)
Entry-Level Investment $500K+ (condo/small home) $250K+ (land banking/duplex)
Target Market Ultra-HNWIs, vacation homes Income investors, Build-to-Rent
Major Employers Tourism only (seasonal) Port, Shipyard, Cruise (3,000+ jobs)
Vacancy Risk High (40-60% off-season) Low (95%+ occupancy)
Residency Investment Requirement $1M $1M
Tax-Free Zone Status ❌ No ✅ Yes
Annual Operating Costs 3-5% of property value 1.5-2.5% of property value
Investment Focus Prestige over ROI ROI & Tax-Free Income

Who Should Invest in Exuma?

Exuma may be suitable for investors who:

  • Are ultra-high-net-worth individuals ($10M+ net worth) seeking a luxury vacation home
  • Prioritize prestige, privacy, and natural beauty over investment returns
  • Want celebrity neighbors and exclusive social circles
  • Can afford $1.5M-$10M+ purchase prices and $50K-$200K+ annual operating costs
  • Don't require rental income (property is for personal use 80%+ of the time)
  • Are comfortable with 5-7% yields and seasonal vacancy
  • View real estate as a lifestyle asset, not an income-generating investment

However, for investors seeking maximum ROI, tax-free rental income, and guaranteed cash flow, Grand Bahama offers 2-3x better returns at half the price.

Investment Reality Check: A $2M luxury villa in Exuma generates approximately $10,000/month during peak season (December-April = 5 months = $50,000) but sits vacant or earns minimal income May-November (assume $20,000). Annual income: $70,000 = 3.5% yield. Subtract $60,000 in operating costs (staff, maintenance, insurance, utilities) = $10,000 net = 0.5% net yield.

The same $2M invested in Grand Bahama buys four $500K waterfront duplexes generating $14,000/month combined ($168,000/year) = 8.4% gross yield—100% tax-free. Subtract $40,000 operating costs = $128,000 net = 6.4% net yield. That's 12x better net returns than Exuma.

Luxury Lifestyle With Income: Grand Bahama's Lucaya waterfront properties offer stunning beaches, crystal-clear waters, and exclusive living—plus guaranteed rental income from Port and Shipyard professionals. You get Caribbean luxury and tax-free cash flow—without paying Exuma's premium prices.

Why Grand Bahama Offers Better ROI Than Exuma →

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Thomas Weber

Frankfurt, Germany | Business Owner | Portfolio: 4 Properties

"As a business owner in Germany, I pay up to 45% in taxes. I was looking for legal ways to diversify my wealth with tax optimization. Grand Bahama was the solution: The Hawksbill Creek Agreement guarantees 0% income tax, 0% capital gains tax, 0% property tax—guaranteed through 2054. I purchased four properties through CPH Invest (Build-to-Rent model), all off-market. Total investment: $2.6M. Annual rental income: $234,000 (9% yield), completely tax-free. My tenants are all employees of Port of Freeport, Carnival, and the Shipyard—long-term contracts, zero vacancy risk. In Germany, I would pay $108,000 in taxes on this income. In Grand Bahama: $0. Over 10 years, I save $1.08 million in taxes. This isn't tax evasion, it's intelligent tax planning. Christoph, as a German himself, understands exactly what matters: transparency, legal security, and no surprises."

Investment: 4 properties ($2.6M total) | Annual Income: $234,000 (9% yield) | Tax Savings: $108,000/year | 10-Year Advantage: $1.08M

Which Bahamas Island is Best for Real Estate Investment?

Choosing the right Bahamas island for real estate investment depends on your goals, budget, and priorities. This decision matrix helps you identify which island aligns with your investment strategy:

Choose Grand Bahama If You Want:

✅ Grand Bahama: The Smart Investment Choice

  • Tax-free rental income & capital gains (Hawksbill Creek Agreement—the only tax-free zone in the Bahamas)
  • 8-10% annual rental yields with guaranteed tenant demand from Port of Freeport, Grand Bahama Shipyard, Carnival & MSC
  • Low residency threshold: any real estate investment qualifies for Home Owners Card, Permanent Residency $1M
  • Undervalued market with growth potential: Post-Hurricane Dorian recovery creates buying opportunity 20-30% below peak prices
  • Closest to the US: 55 miles from Florida, 45-minute flight to Miami—ideal for weekend property visits
  • Build-to-Rent model: Invest in new construction, rent immediately to Port/Shipyard professionals, earn passive income from day one
  • Modern infrastructure: International airport, deep-water port, international schools, modern healthcare
  • Year-round occupancy: 95%+ occupancy rates thanks to stable employer base (not seasonal tourism)
  • Lower entry point: Land banking from $250K, waterfront duplexes from $500K
  • Currency stability: USD-pegged Bahamian dollar eliminates foreign exchange risk

👉 Best for: Investors seeking maximum ROI, tax-free passive income, and Bahamas residency at the lowest investment threshold.

Choose New Providence (Nassau) If You Want:

  • Urban Caribbean lifestyle with access to government offices, international banks, and financial services
  • Best infrastructure in the Bahamas: Largest airport, most hospitals, international schools, extensive shopping/dining
  • Capital city prestige and established expat community
  • Willing to pay premium prices ($400K-$5M+) for established market and amenities
  • Don't prioritize tax optimization (no special tax-free zone like Grand Bahama)
  • Accept lower yields (5-7%) due to higher purchase prices

👉 Best for: Investors who prioritize lifestyle and amenities over ROI, or need proximity to government/finance jobs.

Choose Abaco If You Want:

  • Marina lifestyle and boating community (1,000+ boat slips across multiple marinas)
  • Long-term investment horizon (10+ years) and can wait for full post-Hurricane Dorian market recovery
  • Willing to take on construction/renovation projects (limited turnkey inventory)
  • Tight-knit expat community and authentic Bahamian sailing culture
  • Can afford higher insurance costs (6-10% of property value annually post-Dorian)
  • Accept uncertain rental demand (6-8% yields with seasonal vacancy)

👉 Best for: Passionate boaters willing to wait for market recovery and accept lower yields for marina-front lifestyle.

Choose Eleuthera If You Want:

  • Personal vacation home or retirement property (not rental income investment)
  • Peace, quiet, and authentic Bahamian culture over modern amenities
  • Pink sand beaches and natural beauty as top priority
  • Lower entry prices ($200K-$800K) for beachfront land/homes
  • Accept low rental yields (4-6%) and seasonal vacancy (50%+ off-season)
  • Don't require immediate liquidity (properties take 12-24 months to sell)

👉 Best for: Retirees or vacation home buyers prioritizing tranquility and natural beauty over investment returns.

Choose Exuma If You Want:

  • Ultra-luxury vacation home for personal use (not rental income)
  • Celebrity neighbors and exclusive social circles (Johnny Depp, Tyler Perry, Faith Hill & Tim McGraw)
  • Prestige and privacy over ROI (5-7% yields, high operating costs)
  • Can afford $1.5M-$10M+ purchase prices and $50K-$200K+ annual operating costs
  • View real estate as lifestyle asset, not income-generating investment
  • World-class natural beauty (swimming pigs, Thunderball Grotto, pristine cays)

👉 Best for: Ultra-HNWIs ($10M+ net worth) seeking prestige and luxury lifestyle over investment returns.

Investment Goals Comparison

Your Priority Recommended Island Why
Maximum ROI & Tax-Free Income Grand Bahama Only tax-free zone, 8-10% yields, guaranteed tenants
Lowest Investment Threshold Grand Bahama $250K land banking, $750K residency qualification
Bahamas Residency Grand Bahama $1M investment qualifies for Permanent Residency, any investment qualifies for Home Owners Card
Guaranteed Rental Income Grand Bahama Port, Shipyard, Cruise employers = 95%+ occupancy
Closest to US Grand Bahama 55 miles from Florida, 45-minute flight
Urban Lifestyle & Amenities New Providence Capital city, best infrastructure (but overpriced)
Boating & Marina Lifestyle Abaco 1,000+ boat slips, sailing community (but recovering)
Quiet Retirement Home Eleuthera Peaceful, authentic, lower prices (but low yields)
Ultra-Luxury Vacation Home Exuma Celebrity destination, prestige (but low ROI)

The Clear Winner for Real Estate Investors:

For investors seeking maximum ROI, tax-free passive income, and Bahamas residency, Grand Bahama is the unequivocal choice. It's the only island offering:

✅ 100% tax-free rental income & capital gains (Hawksbill Creek Agreement)
✅ 8-10% annual yields with guaranteed tenant demand
✅ Undervalued market with 20-30% appreciation potential
✅ 45 minutes from Miami (closest to US)

Grand Bahama delivers the highest returns at the lowest entry point—making it the smartest investment in the Bahamas.

Explore Grand Bahama Real Estate Opportunities →

⭐⭐⭐⭐⭐

Michael Richardson

Florida Investor | Purchased 2 Properties in Grand Bahama

"We compared all five islands extensively before making our decision. Grand Bahama was the clear winner—the tax-free income under the Hawksbill Creek Agreement and guaranteed tenants from the Port and Shipyard made it a no-brainer. We're earning 9.2% annual yields on both properties, 100% tax-free. Nassau couldn't come close to these numbers, and Exuma was beautiful but way too expensive for the returns. CPH Invest gave us access to off-market deals we'd never find on our own."

Investment: 2 waterfront duplexes in Lucaya ($1.8M total) | Annual Yield: 9.2% tax-free

Grand Bahama Real Estate: The Smart Investment Choice

After comparing all five major Bahamas islands, the investment case for Grand Bahama is clear and compelling. No other island offers the unique combination of tax benefits, guaranteed rental income, undervalued pricing, and proximity to the United States that makes Grand Bahama the premier destination for real estate investors in 2025.

Why Grand Bahama Leads the Bahamas in Investment Returns

1. The Only Tax-Free Zone in the Bahamas

Grand Bahama's Hawksbill Creek Agreement (signed 1955) established Freeport as a tax-free zone with zero income tax, zero capital gains tax, zero property tax, and zero inheritance tax. This means every dollar of rental income and every dollar of property appreciation is 100% tax-free—an advantage no other Bahamas island can offer.

Tax Advantage Example: A $500K property generating $42,000/year in rental income would be subject to 20-37% US federal tax if located in Florida ($8,400-$15,540 annual tax). In Grand Bahama: $0 tax. Over 10 years, that's $84,000-$155,000 in tax savings—equivalent to 17-31% of your initial investment returned to you tax-free.

2. Guaranteed Tenant Demand = 8-10% Annual Yields

Grand Bahama's economy is anchored by major employers that create consistent, year-round rental demand:

  • Port of Freeport: Caribbean's fourth-largest container port, employing 800+ professionals
  • Grand Bahama Shipyard: One of the world's largest ship repair facilities, employing 1,200+ highly paid expatriates
  • Carnival Corporation & MSC Cruises: Major cruise operations employing 1,000+ staff and executives

These employers require long-term housing for their workforce—creating guaranteed tenant demand that delivers 8-10% annual rental yields with 95%+ occupancy rates. Unlike seasonal vacation rental markets (Nassau, Exuma, Eleuthera), Grand Bahama's rental income is stable and predictable year-round.

Rental Income Comparison:
Grand Bahama: $500K duplex → $3,500/month × 12 months = $42,000/year = 8.4% yield
Nassau: $800K home → $4,000/month × 12 months = $48,000/year = 6% yield
Exuma: $1.5M villa → $8,000/month × 5 months (seasonal) = $40,000/year = 2.7% yield

Grand Bahama delivers the highest yield per dollar invested—and it's 100% tax-free.

3. Undervalued Market with 20-30% Appreciation Potential

Following Hurricane Dorian (2019), Grand Bahama's real estate market remains 20-30% below pre-storm peak pricing. However, the island's economic fundamentals are strong and improving:

  • Port of Freeport expanded container capacity by 40% (2023)
  • Grand Bahama Shipyard completed $100M+ infrastructure upgrades (2022-2024)
  • Carnival and MSC signed long-term lease extensions through 2035+
  • Grand Bahama Development Company investing $500M+ in infrastructure and tourism projects

Early investors are positioned to benefit from significant appreciation as the market recovers to pre-Dorian levels over the next 5-10 years—while earning 8-10% annual rental yields during the appreciation period.

4. Lowest Residency Threshold in the Bahamas

Grand Bahama qualifies investors for Bahamas Permanent Residency with a $750,000 real estate investment—half the $1.5 million required on all other islands. This makes Grand Bahama the most accessible path to tax-free Caribbean residency for US and international investors.

Residency Savings: Achieving Bahamas Permanent Residency in Grand Bahama costs $750,000 less than Nassau, Abaco, Eleuthera, or Exuma—and you earn higher rental yields while qualifying. It's the smartest path to tax-free Caribbean living.

5. Closest Bahamas Island to the United States

Located just 55 miles from the Florida coast, Grand Bahama is a 45-minute flight from Miami or Fort Lauderdale. This makes it the most accessible Bahamas island for US investors who want easy weekend access to their properties—without the 1+ hour flights required to reach Nassau, Abaco, Eleuthera, or Exuma.

Grand Bahama Investment Highlights Summary

Tax Benefits Zero income tax, capital gains tax, property tax, inheritance tax (Hawksbill Creek Agreement)
Rental Yields 8-10% annual returns (vs. 5-7% Nassau, 4-6% Eleuthera, 2-7% Exuma)
Tenant Demand Guaranteed long-term tenants from Port, Shipyard, Cruise Lines (95%+ occupancy)
Property Prices $250K-$2M (vs. $400K-$5M+ Nassau, $500K-$10M+ Exuma)
Residency Qualification $1M investment
Proximity to US 55 miles from Florida (45-minute flight to Miami)
Market Status Undervalued (20-30% below peak), strong appreciation potential
Currency USD-pegged (Bahamian dollar = US dollar, zero FX risk)
Infrastructure International airport, deep-water port, international schools, modern healthcare
Investment Model Build-to-Rent: New construction → immediate rental to Port/Shipyard professionals → passive income from day one

Your Grand Bahama Investment Journey

CPH Investment Group specializes in Grand Bahama real estate, offering investors:

  1. Off-Market Property Access: Exclusive deals not listed on public MLS, often 10-20% below market pricing
  2. Build-to-Rent Development: Custom waterfront homes built to your specifications, rented immediately to vetted Port/Shipyard tenants
  3. Land Banking Opportunities: Secure prime waterfront land from $250K, develop when ready, benefit from appreciation
  4. Full Residency Support: Navigate the $750K Permanent Residency application process with expert guidance
  5. Turnkey Property Management: Professional tenant placement, rent collection, maintenance—fully hands-off for international investors
  6. Tax & Legal Advisory: Partner network of Bahamas attorneys, accountants, and tax advisors to optimize your investment structure

Ready to Invest in Grand Bahama Real Estate? Discover current off-market opportunities, explore our Build-to-Rent model, and learn how to qualify for Bahamas Permanent Residency with a $750K investment—while earning 8-10% tax-free annual returns. Explore Current Grand Bahama Real Estate Opportunities →

Questions? Schedule a free discovery call to discuss your investment goals and explore how Grand Bahama real estate can deliver tax-free passive income and Caribbean residency.

Frequently Asked Questions: Bahamas Islands Comparison

Investors considering Bahamas real estate often have similar questions about which island offers the best returns, tax benefits, and lifestyle. Here are the answers to the most common questions:

1. Which Bahamas island has the best real estate investment returns?

Grand Bahama offers the highest investment returns in the Bahamas with 8-10% annual rental yields—significantly higher than Nassau (5-7%), Abaco (6-8%), Eleuthera (4-6%), or Exuma (5-7%). Grand Bahama's returns are driven by guaranteed tenant demand from major employers (Port of Freeport, Grand Bahama Shipyard, Carnival, MSC) and 100% tax-free rental income under the Hawksbill Creek Agreement.

Key advantage: Grand Bahama is the only Bahamas island with a tax-free zone, meaning you keep 100% of your rental income and capital gains—no income tax, no capital gains tax, no property tax, no inheritance tax.

2. Is Grand Bahama safer than Nassau for real estate investment?

Yes. Grand Bahama offers a safer investment profile than Nassau for several reasons:

  • Lower crime rates: Freeport and Lucaya have significantly lower crime than Nassau's urban areas
  • Guaranteed tenant demand: Port and Shipyard employers provide stable, year-round rental demand (vs. Nassau's competitive market)
  • Undervalued market: Grand Bahama properties are 20-30% below peak pricing, offering appreciation potential (vs. Nassau's overpriced market)
  • Tax-free income: Hawksbill Creek Agreement protects your rental income and capital gains from taxation
  • Lower entry cost: $250K-$1M properties vs. $400K-$5M+ in Nassau reduces capital risk

Investment security: Grand Bahama's employer-driven rental market eliminates vacancy risk, while Nassau's oversupplied vacation rental market creates income uncertainty.

3. Which Bahamas island is closest to Florida?

Grand Bahama is the closest Bahamas island to the United States, located just 55 miles from the Florida coast. This translates to a 45-minute flight from Miami or Fort Lauderdale—making it the most accessible Bahamas island for US investors.

Distance comparison:

  • Grand Bahama: 55 miles from Florida (45-minute flight)
  • Abaco: 180 miles from Florida (1-hour flight)
  • New Providence (Nassau): 185 miles from Florida (1-hour flight)
  • Eleuthera: 200 miles from Florida (1 hour 15 minutes)
  • Exuma: 250 miles from Florida (1 hour 30 minutes)

Investor advantage: Grand Bahama's proximity allows easy weekend property visits, faster travel for emergencies, and lower airfare costs compared to other islands.

4. Can I get Bahamas residency by buying property on any island?

Yes, you can qualify for Bahamas Permanent Residency by purchasing property on any island—but the investment threshold varies significantly:

  • Grand Bahama: $1M+ investment
  • All other islands (Nassau, Abaco, Eleuthera, Exuma): $1M+ investment

Grand Bahama advantage: You can achieve Bahamas Permanent Residency for $1M+ on all islands—but in Grand Bahama you earn higher rental yields (8-10% vs. 4-7%) while qualifying. This makes Grand Bahama the most cost-effective path to tax-free Caribbean residency.

Residency timeline: Approximately 6 months to receive one-year provisional permit, renewable annually until permanent status is granted.

5. Which Bahamas island has the lowest property prices?

Eleuthera has the lowest entry-level property prices ($200K-$500K for beachfront land and small homes), followed by Grand Bahama ($250K land banking, $400K-$1M waterfront homes).

However, price alone doesn't determine investment value. Eleuthera's low prices reflect limited infrastructure, weak rental demand, and 4-6% yields. Grand Bahama's slightly higher prices deliver 8-10% yields, guaranteed tenant demand, and tax-free income—making it the superior investment despite higher entry cost.

Price comparison (waterfront homes):

  • Eleuthera: $350K-$800K (4-6% yields, seasonal vacancy)
  • Grand Bahama: $400K-$1M (8-10% yields, year-round tenants)
  • Abaco: $500K-$1.5M (6-8% yields, limited inventory)
  • Nassau: $800K-$3M+ (5-7% yields, overpriced)
  • Exuma: $1.5M-$10M+ (5-7% yields, ultra-luxury)

6. Which Bahamas island is best for rental income?

Grand Bahama is unequivocally the best Bahamas island for rental income, offering:

  • 8-10% annual rental yields (highest in the Bahamas)
  • 95%+ occupancy rates year-round (vs. 40-60% seasonal occupancy on other islands)
  • Guaranteed tenant demand from Port of Freeport, Grand Bahama Shipyard, Carnival, MSC (3,000+ employees)
  • 100% tax-free rental income (Hawksbill Creek Agreement—only island with this benefit)
  • Long-term tenants (12-24 month leases vs. short-term vacation rentals)
  • Stable, predictable cash flow (not dependent on seasonal tourism)

Rental income comparison (annual):

  • Grand Bahama: $500K property → $42,000/year (8.4% yield, tax-free)
  • Nassau: $800K property → $48,000/year (6% yield)
  • Abaco: $700K property → $45,000/year (6.4% yield, 40% vacancy risk)
  • Eleuthera: $500K property → $25,000/year (5% yield, 50% vacancy)
  • Exuma: $2M property → $70,000/year (3.5% yield, 50% vacancy)

7. Is Exuma better than Grand Bahama for real estate investment?

No. Exuma is better for ultra-luxury vacation homes and prestige; Grand Bahama is better for investment returns and rental income.

Exuma advantages: Stunning natural beauty, celebrity neighbors, ultra-luxury lifestyle

Exuma disadvantages for investors:

  • 3-4x higher property prices ($1.5M-$10M+ vs. $400K-$1M Grand Bahama)
  • Lower rental yields (5-7% vs. 8-10% Grand Bahama)
  • Seasonal vacation rental market (40-60% vacancy vs. 95%+ occupancy Grand Bahama)
  • No major employers (tourism-only economy vs. Port/Shipyard/Cruise in Grand Bahama)
  • Higher residency threshold ($1.5M vs. $750K Grand Bahama)
  • No tax-free zone (Grand Bahama has Hawksbill Creek Agreement)
  • High operating costs (3-5% of property value vs. 1.5-2.5% Grand Bahama)

Bottom line: If you're a billionaire seeking a $10M vacation home for personal use, choose Exuma. If you're an investor seeking maximum ROI and tax-free rental income, choose Grand Bahama.

8. Which Bahamas island has the best infrastructure?

Nassau (New Providence) has the best infrastructure in the Bahamas as the capital city, with the largest airport, most hospitals, international schools, and extensive retail/dining options.

However, Grand Bahama offers excellent infrastructure for investors:

  • Grand Bahama International Airport: Daily flights to Miami, Fort Lauderdale, Nassau
  • Port of Freeport: Caribbean's fourth-largest container port, deep-water access
  • Modern utilities: Reliable electricity, water, high-speed internet
  • International schools: Freeport Anglican High School, Mary Star of the Sea Catholic School
  • Healthcare: Rand Memorial Hospital, modern medical facilities
  • Shopping & dining: Port Lucaya Marketplace, international grocery stores, restaurants

Infrastructure comparison: Nassau has more options but is crowded and expensive. Grand Bahama has everything investors need—modern infrastructure, international connectivity, quality services—without Nassau's premium pricing and congestion.

9. Which Bahamas island is best for retirees?

The best Bahamas island for retirees depends on priorities:

Choose Grand Bahama if you want:

  • Tax-free rental income to supplement retirement (8-10% yields)
  • Modern infrastructure and healthcare
  • Easy access to Florida (45 minutes) for medical care, shopping, family visits
  • Lower cost of living than Nassau
  • Peaceful beachfront lifestyle with amenities

Choose Eleuthera if you want:

  • Maximum peace and quiet (small population, limited tourism)
  • Authentic Bahamian culture
  • Lower property prices ($200K-$500K)
  • Don't need extensive infrastructure or services
  • Don't require rental income (vacation home only)

Retiree recommendation: Grand Bahama offers the best balance—peaceful lifestyle, modern amenities, tax-free rental income, and easy US access. Eleuthera is better for those seeking total seclusion and willing to sacrifice infrastructure.

10. Which Bahamas island has the best tax benefits?

Grand Bahama has the best tax benefits in the Bahamas—and the entire Caribbean.

The Hawksbill Creek Agreement (1955) established Freeport as a tax-free zone with:

  • Zero income tax on rental income
  • Zero capital gains tax on property appreciation
  • Zero property tax on real estate holdings
  • Zero inheritance tax on property transfers
  • Duty-free imports for construction materials and personal goods
  • No exchange controls (freely repatriate funds)

This tax-free status is guaranteed through 2054 and is unique to Grand Bahama.