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On 1 July 2026 The Bahamas began taxing foreign-owned homes under a category that did not exist before. The Real Property Tax (Amendment) Bill, 2026, brought forward in the 2026/2027 budget cycle, created a separate class for “foreign owned owner-occupied property,” set its rate at five-eighths of one percent, and capped the annual charge at $200,000. For anyone underwriting a purchase on Grand Bahama or elsewhere in the archipelago, the change replaces guesswork about exemptions with a rate you can put in a model.
What the 2026 amendment actually changed
Before this year, a non-Bahamian who occupied a Bahamian home could claim the owner-occupied exemption through an annual affirmation, with a day-count condition attached to it. The amendment narrows the ordinary owner-occupied definition to Bahamians and permanent residents holding the appropriate permits, and moves non-Bahamian occupiers into their own class.
- New class: “foreign owned owner-occupied property” — a non-Bahamian with a residence permit occupying the property as a dwelling house.
- Rate: five-eighths of one percent (0.625%) per annum.
- Cap: $200,000 per year, against $150,000 for Bahamian owner-occupied property.
- Day count: the statutory wording requiring occupation “for a period of not less than 90 days in the year” was deleted.
- Commencement: the Act comes into force on 1 July 2026.
The Ministry of Finance put a number on what it expects this to raise: roughly $24m in the first year, rising to $26.5m and $28.3m in the two fiscal years after, as reported during the budget debate. That projection is worth noting for a different reason than revenue. A measure the government has costed into its fiscal plan is a measure it intends to administer, not a signal it plans to reverse.
The rate arithmetic, in three bands
The flat structure makes the annual charge straightforward to estimate. Applying 0.625% to assessed value:
- A $600,000 home: approximately $3,750 per year.
- A $1.5m home: approximately $9,375 per year.
- An $8m home: approximately $50,000 per year.
The $200,000 cap only binds above roughly $32m of assessed value, which is why it drew criticism during the budget debate. Mario Carey of Better Homes & Gardens Real Estate MCR Bahamas argued publicly that a higher tier should apply above $20m, on the grounds that no domestic buyer competes at that price point. The Bahamas Real Estate Association pushed from the opposite direction, noting that Bahamian owner-occupiers face a sliding scale reaching 1% on value above $500,000 while foreign owner-occupiers pay a flat 0.625% — an inversion the association asked the government to correct.
Neither critique changes the rate as enacted. Both are useful as a read on where future pressure sits: the debate in Nassau is about whether the top end pays enough, not about whether foreign ownership should be discouraged.
A residency test replaced the day count
The more consequential change for most buyers is structural rather than numerical. The earlier approach, set out when the measure was first floated in the 2025/2026 budget communication, contemplated tiered thresholds — partial relief above 90 days of presence, full relief above 183 days. The enacted version drops the day-count language in favour of a permit-and-occupation test: the qualifying question is whether the owner holds a residence permit and occupies the property as a dwelling house.
For an investor who cannot commit to spending half the year in the country, that is a meaningful simplification. It also shifts the compliance burden from calendar records to permit status, which is documentation you either hold or do not. Our guide to tax and residency in The Bahamas covers the permit pathways themselves; the point here is that the property tax classification now travels with them.
Grand Bahama's Port Area sits under a different regime
None of the above displaces the Hawksbill Creek Agreement. Property inside the Freeport Port Area has historically been governed by the exemption regime established under that agreement, which was extended to 2054, and the Department of Inland Revenue continues to list Freeport as exempt under it. That is a materially different starting position from a comparable property in New Providence or on a Family Island.
Two cautions belong alongside that statement. Eligibility is parcel-specific and depends on the property's status and licensing history, so it should be confirmed in writing for the individual title rather than assumed from the postcode. And the Port Area's incentive framework has been a recurring subject of parliamentary debate for a decade. The Progressive Liberal Party's re-election on 13 May 2026 points to policy continuity in the near term, but the 2054 horizon is a statutory date, not a guarantee against future amendment. We treat it as a favourable current condition, not a permanent one. The Port Area overview sets out the wider framework.
The annual charge is the smaller number
An annual 0.625% is rarely what decides a transaction. Acquisition costs are the larger line: value-added tax on the conveyance runs on a tiered scale reaching 10% at the top band for individuals and a flat 10% for corporate purchasers, with legal fees and recording costs on top. Against that, the recurring charge on a $1.5m home is a rounding item.
Two administrative details are worth building into a holding model. Payment in full by 31 March attracts a 10% discount on the current year's tax. Unpaid balances carrying past 31 December attract a 5% surcharge from 1 January. The spread between those two is 15% of the annual bill, which is a larger swing than most buyers expect from a payment date.
What this means for an underwriting model
The practical effect of the 2026 amendment is that foreign ownership costs became predictable. A flat rate with a stated cap and a documentary qualifying test can be modelled with confidence over a ten-year hold; a discretionary exemption tied to a day count could not. For Grand Bahama specifically, the reform arrives alongside a capital expenditure cycle that is already under construction rather than announced: Carnival's Celebration Key received 2.4 million guests in its first year and doubled its berth capacity, Concord Wilshire's $700m Grand Lucayan redevelopment anchors a 550-room Hilton, MSC has committed a separate $450m cruise facility, and the airport rebuild is in progress. Our Grand Bahama market overview tracks those projects in detail.
The sequence matters. Tax clarity and infrastructure delivery landing in the same eighteen months is a different proposition from either one alone.
If you are modelling an acquisition on Grand Bahama and want the holding-cost assumptions checked against the current statute, we maintain a detailed investment paper covering the market, the applicable charges, and project-level analysis. It is available to accredited investors on request.
This article is for general information only. It is not investment, tax or legal advice, and it is not an offer to sell or a solicitation of an offer to buy any security or any interest in any property. Tax treatment depends on individual circumstances, may change, and must be confirmed with qualified legal and tax advisors in your own jurisdiction and in The Bahamas before you act.
