Overseas property: BahamasPosted on: 17 July 2012 by Laura Henderson
The palm-fringed Bahamas are drawing a new breed of investor in search of a low-key, tropical escape.
Few locations boast quite the same ‘licence to thrill’ credentials as The Bahamas. James Bond author Ian Fleming, coaxed silver-tongued Sean Connery to the ‘little known’ island paradise of New Providence in 1965 for the making of Thunderball, the fourth in the celebrated 007 film series. By 1970, word had got out about the barefoot luxury attributes of this 700-island archipelago with a record one million sun-seekers jetting in to feel the sand between the toes for themselves.
But the islands have long been a favoured sun spot for the British elite. The playground for wealthy bachelors in the Roaring Twenties, Nassau the capital, was also the preferred winter resort of the Duke of Windsor, who was governor of the Bahamas in the 1940s.
These days, this English-speaking, tea drinking nation 180 miles off the Florida coast, still offers a taste of the tropical high life with a sense of home. Independent from Britain since 1973, the Bahamian political system is still based on the British parliamentary model and cricket is the national sport. While tourism is the country’s primary source of income, with 50% of GDP coming from the hotel and resort industry, the region is also garnering a reputation as an ‘offshore banking’ haven. Encouraged by a highly competitive tax regime — no income tax, capital gains tax, wealth tax or VAT — the islands are home to High Net Worth Individuals seeking to avoid high tax burdens overseas. The country's stable government and sovereign status are among its strengths as an international financial centre,” says Ellison Thompson of the Bahamas Tourist Authority. But the balmy climate and island-hopping lifestyle also make it popular with foreigners looking to relax and recharge. Direct BA flights five days a week from the UK to Nassau are boosting British visitor footfall, with a £250m airport extension to accommodate additional long-haul airlift likely to see Virgin Atlantic opening a new route.”
Like most holiday-centric locations, the islands are feeling the lingering effects of the recession with a fall-off in real estate values since 2008. Says local agent Simon Peterson: Five years ago over inflation defined the premium end of the market. Now, buyers can acquire property at more realistic prices – 15%-20% below previous thresholds, although prices vary considerably with established locations such as New Providence and Grand Bahama appreciably more.
One recent initiative boosting ‘value’ recovery as well as highlighting real estate opportunities to a broader global investor base has been the introduction by the Bahamas Real Estate Association (BREA) of the Multiple Listings Service (MLS) - an online database of all listed properties in The Bahamas that allows prospective homeowners to search properties on the market from anywhere in the world. The MLS website is regularly updated by all BREA members in The Bahamas so that agents can easily access current information, such as who is bidding on a property, what the property’s history is, and whether the seller’s status has changed,” explains BREA president Patty Birch. Buyers also benefit as they can browse all available properties in a single location online.”
Further signs of an uptick in investor confidence, has been rising levels of interest for second-homes in some of the lesser-developed outer islands, with the scenic Abacos chain leading the way. Populated by the descendants of British loyalists fleeing the United States during the War of Independence, these low-lying coral islands lined with shallow bays are rich in history with plenty on offer beyond lazy days on the beach. Great Abaco has become a thriving resort-filled sailing centre,” adds Thompson, and its main town, Marsh Harbour, is the third largest city in the Bahamas.
Property choice, in contrast to the proliferation of turn-key offerings on New Providence, is also quite diverse: traditional clapperboard cottages and characterful townhouses nestled alongside contemporary custom-build villas, with a sprinkling of small-scale resort communities. It’s horses for courses,” says Peterson. Overseas buyers thinking about relocating often opt for a stand alone property in one of the residential ‘hubs’ such as Marsh Harbour or Hope Town. Those buying for second-home purposes with a view to rentals often plump for the hassle-free set up of a managed resort.”
Garnering its share of publicity as one of the islands’ most innovative residential projects to date is the newly launched harbour front community of Schooner Bay. Located on the tranquil easterly fringes of Great Abaco, yet just a short flight or ferry ride from Nassau, this 330-acre urbanist masterplan” is the creation of award winning developer Orjan Lindroth, a Swedish national who was brought up on the islands. The thinking behind the project wasn’t to create yet another gated development – quite the opposite,” he explains. It’s more about taking a slower, more culturally attuned approach to residential development. Since it opened last year, we’ve made a concerted effort to welcome a diverse population: primarily Bahamians but also foreigners – that way the community has a year-round spark to it with residential neighbourhoods, shops, leisure amenities and local businesses all carrying equal status.
One keynote feature of the village explains SB Marketing Director James Malcolm is its ecological footprint”. Only one third of the site will be developed to preserve natural dunes and indigenous vegetation,” he explains. Transportation is by golf buggy, bicycle or foot with an integrated ‘green’ infrastructure including features such as rainwater-harvesting cisterns and geothermal cooling systems in homes, which will dispense with the need for air conditioning.
The heartbeat of the community - a 14-acre working harbour will allow homeowners to have a small boat mooring. The harbour isn’t a conventional marina,” adds Malcolm, rather a working harbour (with Yacht Club and full marina services) which will be open to fishing boats as well as visiting vessels – the ideal place to drop anchor while island hopping.”
Leisure amenities in the pipeline include a world-class Black Fly Bonefish Club offering access to miles of little fished saltwater flats, together with equestrian trails, tennis courts, a Farmer’s Market, arts and crafts centre and wellbeing spa.
While it’s still early days, inspection visits have delivered a healthy ‘browser-to-buyer’ conversion rate with 50 plots of the 130 released in Phase One already spoken for. A choice of bespoke designs gives individuals plenty of input into the aesthetic of their home,” adds Malcolm, although the overriding architectural theme remains true to the Bahamian vernacular – clapperboard exteriors, cedar shingle roofs, shuttered jalousie windows, and wrap around verandas which make the most of the cooling island breezes.
With a total build out of 450 homes, Lindroth is expecting a cosmopolitan ownership base.” We already have residents from the UK, Germany and Canada,” he adds. Plots range from £116,000 for a two-bedroom cottage harbour village lot to £1.6m for an acre beachfront plot with an average build time of around 8-10 months – something for buyers of all persuasions.”
Buying in the Bahamas
- There are no restrictions on foreigners buying freehold property in the Bahamas.
- Registration fees are between £95 and £375.
- Legal fees range from 1.0% - 2.5% of the property purchase price.
- Stamp Duty ranges from 8% - 12% and is usually shared equally between vendor and buyer. Most Real Estate transactions for holiday property range between 10% -12%.
- There is no inheritance tax, Capital Gains Tax (CGT) or wealth tax.
- Foreign owners can apply for residency status. Preferential consideration of applications for permanent residence is given to investors and to qualified owners of residential property valued in excess of US$500,000 (£315,000).
About the Author
Laura Henderson is a national property journalist and Features Editor of The Good Property Guide. A regular contributor to the Telegraph Expat, Sunday Express and Scotsman newspapers, she is also the author of numerous on-line property guides for among other Channel 4 Homes. Her latest book Tricks and Mortar: The Little Book of Property Wisdom is out now.
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