Introduction to Purchasing Real Estate in The Bahamas
Like most countries, The Bahamian Government recognizes foreign home ownership as an important source of Foreign Direct Investment (FDI). And as with most governments, they try and do their best to balance FDI legislation between being investor friendly, maintaining national sovereignty and jobs for Bahamians. Where it gets tricky, is that in a small island nation with a tiny population and a ton of people screaming ‘me, me, me’, the dynamics of government can seem a little chaotic at times. We refer to this chaos as ‘coconuts,’ and it is one of the most important aspects of life in the Bahamas that you need to understand if you are going to make any kind of investment here.
Historically, the Bahamas has been an extremely stable country and tends to follow in South East Florida’s economic footsteps (our largest trading partner by far in every aspect).
A former British colony, the nation went independent peacefully in the early 70’s and has held regular free and fair democratic elections per its constitution ever since. And whilst there has been no shortage of controversies and dumb policies made by naive, populist-driven politicians there has really never been any kind of political or financial instability; no debt defaults, no coup d’etat, no land repossessions, no political prisoners. This may all seem a bit dramatic, but if you look around the Caribbean and Latin America in the last 50 years, there’s a lot to be said for the Bahamas keeping it all together!
The Bahamas remains a member of the British Commonwealth under the supreme legislature of Britain’s Privy Council, and there does not seem to be any motivation to change this any time soon. The Bahamian dollar remains at a (pegged) par value with the $US and as much as we all complain about it, there has been little objection when the government introduces new taxes to support the value of our dollar and pays respect to the national debt. So the point is fundamentally, in spite of what sometimes seems to be a lot of ‘coconuts,’ an investment in real estate in the Bahamas is safe on a macro level. We cannot guarantee you will make a profit in the short term, but all ‘other’ international investment risks are extremely low.
At street level, it is just important to remind yourself that this is a different country and whilst a lot of things may seem just like back home, some nuances can make a big difference when it comes to spending a considerable amount of money on that slice of paradise.