Closing Costs in the Bahamas: What Every Investor Should Know

At CPH INVEST LLC, we specialize in guiding discerning investors through real estate acquisitions in the Bahamas — from premium residences and boutique hospitality projects to marina resorts and luxury developments. One of the most common questions we receive concerns closing costs: What are they, how much do they add up to, and who pays them?

Understanding these numbers is critical. While the Bahamas is renowned as a zero-tax jurisdiction — with no income, capital gains, or inheritance taxes — there are transaction costs attached to property purchases. These must be factored into every investment decision.

1. Stamp Duty (Transfer Tax) – The Largest Component

• Rate: 10% of the purchase price or market value, whichever is higher.
• Split: Traditionally shared between buyer and seller (5% each).
• Variation: In some transactions, the buyer may be required to cover the full 10%.

Example: For a $1,000,000 acquisition, the stamp duty equals $100,000.

2. Legal Fees – Mandatory Representation

• Standard Fees: ~2.5% of the purchase price.
• VAT: 10–12% applied to legal fees.

Bahamian attorneys conduct title searches, verify ownership, and safeguard investors — essential for international buyers.

3. Real Estate Commissions

• Commission: 5–6% of the purchase price.
• VAT: Applied to commission.
• Responsibility: Typically paid by the seller, though negotiable.

4. Value-Added Tax (VAT)

The current VAT rate is 10%. It applies to:

• Stamp Duty
• Legal Fees
• Commissions

5. Miscellaneous Costs

• Title search and registration fees (several hundred USD).
• Appraisals or due diligence reports (recommended for larger deals).
• Bank financing fees (~1% of loan + lender’s legal costs).

6. Example Calculation: $1,000,000 Property

• Stamp Duty (10%): $100,000 → split $50,000 buyer / $50,000 seller.
• Legal Fees (2.5%): $25,000 + VAT (~$2,500).
• Miscellaneous Fees: ~$1,500.

Buyer’s net closing costs with split stamp duty: approx. $78,000
If buyer covers full stamp duty: approx. $128,000

Strategic Importance for Investors

For high-net-worth individuals seeking permanent residency or tax-free diversification, these costs directly affect investment returns. The allocation of Stamp Duty is particularly significant: structuring deals so that the seller absorbs half — or more — is a frequent negotiation point.

At CPH INVEST LLC, we structure acquisitions for maximum efficiency. Beyond securing premium properties, our role is to minimize transaction friction and ensure a seamless residency and investment process.

Final Thoughts

The Bahamas remains one of the world’s leading jurisdictions for asset protection, tax optimization, and lifestyle investment. While closing costs are part of every acquisition, they are predictable and transparent:

• Stamp Duty is the largest cost driver.
• Legal fees are mandatory but essential.
• VAT applies across all service fees.

With the right guidance, investors can plan precisely, avoid surprises, and unlock both financial security and permanent residency benefits.