How Property Tax Works in The Bahamas

Most of what's online about Bahamian property tax is written for foreign investors deciding whether to buy a vacation home, not for the Bahamians and long-term residents actually paying it. The rates have been amended several times in the last few years, and the 2025 amendment changed something fundamental that most third-party sites haven't caught up with yet.

Last updated: May 2026. Verify current rates and forms at the Department of Inland Revenue.

This guide is about the annual real property tax you pay each year on land you own in The Bahamas. The one-time taxes and fees that come up when you buy or sell a property (Value Added Tax on the conveyance, stamp duty, legal fees) are different and are governed by separate statutes. They're not covered here.

The Short Version

Real property tax is the annual tax you pay on the value of land you own in The Bahamas. The rate depends on four things: who owns the property, whether the owner lives in it, what's built on it, and how many units it has. Bahamians pay nothing on vacant land they own anywhere in the country, including New Providence, and nothing on any property they own in the Family Islands, whether vacant or built upon. For an owner-occupied home, the first $300,000 of value is exempt, the next $200,000 is taxed at 0.625%, anything above $500,000 is taxed at 1%, and the total annual tax is capped at $150,000 if you actually live there 183 days or more a year. Tax is due by March 31 each year. Pay by then and you get a 10% discount. There's no surcharge until January 1 of the following year, when 5% per annum starts accruing on whatever you still owe.

What Gets Taxed (And What Doesn't)

Real property tax is governed by the Real Property Tax Act, Chapter 375, originally enacted in 1969 and amended many times since. The most recent amendment came into force on July 1, 2025. Section 42 of the Act lists the categories of property that are completely exempt from the tax:

• Vacant land owned by Bahamians, anywhere in the country (including New Providence)
• Property owned by Bahamians in the Family Islands, whether vacant or built upon
• Property used exclusively for religious worship, plus property owned by religious institutions, non-profit organizations, trade unions, civic organizations, and burial societies (the broader list was added by the 2022 amendment)
• Schools and the gardens or playing fields attached to them
• Crown land and property of the Government of The Bahamas
• Foreign State property used as a consular office or residence
• Property used for commercial farming
• Property used for charitable or public service from which no profit is derived
• Bahamas National Trust property
• Improved historic property in the national register, for 20 years from the date of improvement (you have to apply before the work, not after)

Two further large exemptions sit alongside the Act. Freeport, Grand Bahama is exempt from real property tax under the Hawksbill Creek Agreement. It's the only blanket geographic exemption in the country. And first-time homeowners can claim a five-year exemption under section 42A of the Act, which we cover in detail below.

If your property doesn't fall into one of these buckets, it's taxable. The next question is at what rate, and that depends on which of four categories your property falls into.

The Four Categories That Determine Your Rate

Every taxable property in The Bahamas falls into one of four categories. The rate schedule is very different across them, so this is the single most important thing to get right.

1. Owner-Occupied

Property where the owner lives in it as a dwelling on a permanent or seasonal basis for at least 90 days a year. If the property is held through a company, the person actually living there must own more than 50% of the company's shares. This is the most favorable category, with the largest exemption and the only annual cap.

2. Residential

Property that isn't owner-occupied but meets four conditions: it has four units or fewer, it's used solely as a dwelling, it's owned by a Bahamian (or by a person VAT-registered for a commercial rental establishment), and it's not used for any business activity. This is the standard category for landlords renting out small properties.

The 2022 amendment added an important proviso: if a person owns more than four non-owner-occupied dwellings, all of them get reclassified as commercial property. So if you have exactly four non-owner-occupied dwellings, you stay in the residential category. Add a fifth and all five get reclassified as commercial, with the higher rates that come with it.

3. Commercial

Any property used for business purposes. This includes hotels, offices, retail stores, warehouses, plus any rental portfolio of more than four dwellings, plus rental properties owned by non-Bahamians who aren't VAT-registered for commercial rental. No annual cap.

4. Foreign-Owned

Property owned by someone who isn't a Bahamian citizen, and not held by a company that's at least 60% Bahamian-owned. Foreign-owned vacant land is its own category with its own rate. Foreign-owned dwellings can qualify as owner-occupied if the owner meets the residency rules (covered below), and otherwise track the commercial rate schedule.

The Math: Owner-Occupied

If your property qualifies as owner-occupied, the rate schedule is:

• First $300,000 of market value: exempt (no tax)
• $300,001 to $500,000: 0.625% per year
• Above $500,000: 1% per year
• Annual cap on the tax bill: $150,000, but only if you reside in the property for at least 183 days in the year (no cap if you reside there less)

The cap matters for very expensive homes. Because the 1% rate kicks in above $500,000, you don't actually reach the $150,000 cap until the home is worth roughly $15 million, so for almost every Bahamian homeowner the cap is theoretical.

Worked example: a $400,000 home you live in year-round

• First $300,000: $0
• Next $100,000 (the band from $300,000 to $400,000): $100,000 × 0.625% = $625
• Total: $625 a year

Worked example: a $700,000 home you live in year-round

• First $300,000: $0
• Next $200,000 (the band from $300,000 to $500,000): $200,000 × 0.625% = $1,250
• Next $200,000 (the band from $500,000 to $700,000): $200,000 × 1% = $2,000
• Total: $3,250 a year

The 10% prompt-pay discount, if you pay by March 31, brings those annual figures down to $562.50 and $2,925 respectively.

The Math: Residential, Commercial, And Vacant Land

The other three categories use different rate schedules.

Residential rentals (Bahamian-owned, four units or fewer)

• First $75,000 of market value: $300 flat fee
• Above $75,000: 0.625% per year

Worked example: a $200,000 rental property

• First $75,000: $300 flat fee
• Next $125,000 (the band from $75,000 to $200,000): $125,000 × 0.625% = $781.25
• Total: $1,081.25 a year

Commercial property

• First $500,000: 0.75% per year
• $500,001 to $2,000,000: 1% per year
• Above $2,000,000: 1.5% per year

Worked example: a $1,000,000 commercial property

• First $500,000: $500,000 × 0.75% = $3,750
• Next $500,000 (the band from $500,000 to $1,000,000): $500,000 × 1% = $5,000
• Total: $8,750 a year

This also covers a landlord with five rental dwellings, since the four-unit cliff bumps that whole portfolio into the commercial category.

Foreign-owned vacant land

• First $7,000 of market value: $100 flat fee
• Above $7,000: 2% per year

Worked example: a $50,000 foreign-owned undeveloped lot

• First $7,000: $100 flat fee
• Next $43,000 (the band from $7,000 to $50,000): $43,000 × 2% = $860
• Total: $960 a year

The 2% rate is steep relative to other categories, and that's deliberate. The Government wants foreign-owned vacant land developed or sold, not held passively for appreciation.

Bahamian-owned vacant land is fully exempt under section 42(1)(g), so the only line on this category that matters for Bahamians is the foreign-owned variant. If your land is held by a company, the test is whether at least 60% of the shares are beneficially owned by Bahamians. Below that threshold, the company is treated as foreign for property tax purposes.

The Residency Rules

This is where the law has changed the most recently, and where most of the inaccurate online summaries are still showing pre-2025 rules. Three different residency rules now affect whether your property gets the favorable owner-occupied treatment.

Rule 1: Only one home gets the owner-occupied rate (since 2022)

Section 3(8A), added by the 2022 amendment, says that if you own more than one property used as your residence, only one of them can be classified as owner-occupied. The same rule applies to married couples: if you and your spouse each own a home, only one of those properties qualifies. The reason: the law treats a married couple as a single household for owner-occupied purposes, so that a couple can't double-up by each claiming a different home as their primary residence.

So if you own a Nassau home and an Eleuthera cottage, you choose which one gets the $300,000 exemption and the $150,000 cap. The other is classified as residential (and taxed at the residential rate above $75,000) or, if foreign-owned, as commercial.

Practically, the choice usually goes to the higher-value property, since the exemption is worth more there. A $600,000 home as owner-occupied pays $1,250 a year. The same home reclassified as residential pays roughly $3,281. The difference is real money.

Rule 2: At least 90 days a year, every year (since July 2025)

The 2025 amendment redefined "owner-occupied" to require occupancy "on a permanent or seasonal basis for a period of not less than ninety days in the year." Below 90 days, the property doesn't qualify as owner-occupied at all, and it loses the $300,000 exemption and the annual cap.

What happens to it next depends on who owns it. A Bahamian-owned dwelling with four units or fewer that's used solely as a residence falls back into the residential category, taxed at the residential rental rate ($300 flat on the first $75,000, then 0.625% above). A foreign-owned home that fails the 90-day test gets taxed at full commercial-style rates with no exemption and no cap, which is a much harsher landing.

This rule is aimed mainly at foreign owners who buy a Bahamian home, claim the owner-occupied benefit on paper, and then visit only a couple of weeks a year. It also catches Bahamians who relocate abroad and keep a Bahamian home as an occasional retreat, though for a Bahamian the fallback to residential rates is comparatively mild.

Rule 3: 183 days for the cap (since July 2025)

The same 2025 amendment tightened the $150,000 annual cap. The cap now only applies if "the property has been occupied and resided in by the owner for a period not less than one hundred and eighty-three days in the year." Live there less than half the year and your property tax has no upper limit, even if it otherwise qualifies as owner-occupied (because you spent 90 to 182 days there).

For most Bahamian homeowners, this rule has no practical effect, because they live in their primary home year-round and well under the cap anyway. But for a high-value home (above about $15 million in market value, where the unconstrained tax would exceed $150,000) or for any owner who splits time between countries, the 183-day test is now the line that matters.

The Office of the Prime Minister issued a clarification on May 28, 2025 explaining how foreign owner-occupied applicants would be treated under these rules. Foreign owners residing 183 or more days a year qualify for the full owner-occupied exemption. Foreign owners residing 90 to 183 days a year qualify for a partial exemption. Foreign owners residing less than 90 days no longer count as owner-occupied at all. The rules apply to Bahamian and foreign owners alike, but the OPM statement was aimed at non-Bahamians, who are most affected.

Recap: the residency rules at a glance

The First-Time Homeowner Exemption

Section 42A of the Act gives first-time homeowners a five-year exemption from real property tax. The conditions are specific:

• You're a first-time owner in fee simple (or mortgagor in possession) of a dwelling house
• You actually occupy and reside in the property exclusively as a dwelling
• The market value of the home is more than $300,000 but not more than $500,000
• You haven't already applied for or received this exemption on another property
• The property isn't used for any commercial purpose

You apply in writing to the Chief Valuation Officer with an affidavit confirming the conditions. The five years run from the date on the occupancy certificate (or the conveyance date if the home is already complete). False statements on the affidavit carry a $5,000 fine.

The reason the exemption applies only to homes valued $300,000 to $500,000 is that anything below $300,000 is already fully exempt under the standard owner-occupied threshold. The first-time exemption is the extra benefit for homes in the band that would otherwise be taxable. So a first-time buyer of a $400,000 home who would normally owe $625 a year pays $0 for five years.

It's worth applying as soon as you have the occupancy certificate or close on the conveyance. The benefit only counts forward from approval, not retroactively to the start of ownership.

Discounts And Concessions

Beyond the exemptions and the first-time-homeowner relief, there are several discounts and concessions baked into the system. Most homeowners qualify for at least one.

The 10% prompt-payment discount. Pay your full annual tax by the March 31 due date and you receive a 10% discount on the bill. This is the single most common form of relief. On a $3,250 owner-occupied bill, the discount is $325.

The pensioner's discount. Bahamian homeowners aged 65 or older with an NIB Senior Citizen card get a 50% reduction on the portion of tax above the $300,000 owner-occupied exemption. The benefit caps at homes valued up to $1,000,000. So a 65-year-old Bahamian living in a $700,000 home would normally owe $3,250 a year. With the pensioner discount, that becomes roughly $1,625 a year, before the prompt-pay discount.

The hardship relief certificate (section 33). If undue hardship would result, the Minister can grant a relief certificate authorising total or partial exemption from the tax, or deferring payment. This is the discretionary safety valve for homeowners on a fixed income, in poor health, or otherwise unable to pay. The application is in writing with documentation of age, health, or financial circumstances. The certificate can be varied or revoked if your circumstances change, and it terminates on death.

Payment plans. If you can't pay the full bill by March 31, the Department of Inland Revenue offers an installment plan with 25% down on the balance and the remainder paid over a period agreed with the Department. The plan is granted case by case based on your circumstances. Having a mortgage doesn't bar you from a payment plan with Inland Revenue. Your lender may have its own opinion, since unpaid property tax becomes a first charge on the property under section 25 and ultimately affects their security, but that's a separate conversation with your bank.

The Timeline: Assessment, Due Dates, And What Happens If You Don't Pay

Property tax in The Bahamas runs on a calendar year. Here's how the year unfolds:

The assessment. The Department of Inland Revenue assesses your property at fair market value. The assessment is published in the Gazette and a notice of assessment is sent to you. A general re-assessment can happen at most once every five years (section 8). The "state of facts" used for exemptions is fixed as of October 15 of the year before each tax year (section 42(2)).

January 1. Tax year begins. You owe the tax for the new year as of this date.

March 31. Due date under section 18, as replaced by the 2022 amendment. Pay your full year's tax by this date and you receive the 10% prompt-payment discount.

April through December. No surcharge accrues during this window. You can pay any time and avoid penalty. You just lose the prompt-pay discount.

December 31. Last day to pay before the surcharge kicks in.

January 1 of the following year. Surcharge starts accruing at 5% per annum on the unpaid balance (section 21).

Bounced check fee. A failed payment carries a $30 fee, on top of the surcharge if the payment was supposed to land before the deadline.

If you don't pay, the Act gives the Treasurer several recovery routes:

• Direct proceedings. Thirty days after a notice has gone unpaid, the Treasurer can begin court proceedings for the recovery of the tax (section 23).
• Garnishee. The Treasurer can serve notice on anyone who owes you money (an employer, tenant, or debtor) and require them to pay your tax debt directly out of what they would otherwise owe you (section 24).
• First charge / lien. Tax is a first charge on the property for as long as it's unpaid (section 25). You can't sell or transfer the property under execution without clearing the tax first.
• Forced sale of unimproved property. After six months of arrears, the Treasurer can sell unimproved property (vacant land, or land where construction is incomplete and no occupancy certificate has been issued) at public auction to recover the tax (section 25A). The 2022 amendment narrowed this provision so it doesn't apply to property that's owner-occupied by a Bahamian. Other recovery routes still apply, but the auction route is reserved for foreign owners and unoccupied land.
• Voluntary surrender. Section 22A lets you transfer the property to the Treasurer to settle the arrears. The 2025 amendment clarified that if the property's market value exceeds the arrears, the surplus isn't paid back to you. You get the debt cancelled, but no excess.
• Mortgagee liability (section 19). If your property is mortgaged and the tax goes unpaid, your bank can be required to pay it to the Treasurer to protect its security interest. The bank may then recover what it paid from you, often by adding it to your mortgage principal, though the exact mechanism depends on your lender. If you have a mortgage and you're worried about falling behind, check with your loan officer to understand how your bank handles property tax arrears.

The blunt point: the system isn't built to take Bahamian-owner-occupied homes for tax debt. It's built to recover tax through other means, including from your wages and bank balances if needed. Don't ignore a notice of assessment, but also don't panic that your home is at imminent risk if you fall behind.

If Your Assessment Is Wrong: Objecting And Appealing

You don't have to accept an assessment that's wrong. The Act gives you a clear path to challenge it.

Step 1. Object to the Chief Valuation Officer (section 11). Within 30 days of when the notice of assessment is served, file a written objection stating your grounds. You can get an extension up to 90 days if you were absent from The Bahamas or had another reasonable cause. Note: under section 12(3), the Chief Valuation Officer will dismiss the objection unless you've first deposited the full tax payable with them, or the officer is satisfied you should be relieved of that requirement. So in most cases, expect to pay first and recover later if you win.

Step 2. Appeal to the Tribunal (section 13). If the Chief Valuation Officer rules against you, within 30 days of that decision you can require them to refer the case to the Real Property Tax Appeal Tribunal. The Tribunal is a three-member body that reviews the assessment and can affirm it, modify it, or overturn it. Hearings are public unless the Tribunal directs otherwise.

Step 3. Appeal to the Supreme Court (section 16). If you disagree with the Tribunal's decision, you have 21 days to appeal to the Supreme Court, but only on a question of law. The Court won't re-litigate the facts. This last step is uncommon and usually involves a lawyer.

Two practical notes. The 30-day objection clock starts running on the date the notice is served, which can be earlier than the date you actually read it. If you've been out of the country, ask for the 90-day extension immediately. And the deposit-first rule under section 12(3) is the part that catches most homeowners by surprise. If you can't pay the disputed amount up front, raise that with the Chief Valuation Officer when you file the objection, not after.

What's New (2025) And What's Coming (2026)

The Real Property Tax (Amendment) Act 2025 (Act No. 43 of 2025) was assented to on June 27, 2025 and came into force on July 1, 2025. Five changes are worth knowing:

• The 90-day owner-occupied requirement. Covered above. Effectively a residency floor for the favorable category.
• The 183-day requirement for the $150,000 cap. Also covered above. Live there less than half the year and the cap goes away.
• Derelict buildings get a $5/year minimum on New Providence. A new section 3(11) says that any New Providence property containing a derelict building is liable for at least $5 of property tax a year, regardless of any other provision. The point isn't the $5. The point is keeping these properties on the tax rolls so the Government can use the lien and recovery powers to address blight.
• A new arrears waiver for owners who improve derelict buildings (section 42B). If you own a property with a derelict building and you fix it (or demolish and rebuild), you can apply to the Chief Valuation Officer for a waiver of the past arrears, in part or in full. The waiver requires pre-approval before the work begins, and the Officer specifies the amount to be waived in writing as part of that approval. This is a deliberate carrot for redevelopment.
• Chief Valuation Officer replaces Minister for tax-relief and surrender applications. A delegation that's supposed to make decisions faster.

Coming, but not yet enacted as of May 2026: the duplex and triplex extension. In his National Address on January 14, 2026, Prime Minister Davis announced that the law will be amended so owners of duplexes and triplexes who live in one unit can claim the full owner-occupied exemption on the entire property, not just the unit they personally occupy. Minister of Economic Affairs Michael Halkitis confirmed the commitment in the Senate on March 27, 2026. As of writing, no Real Property Tax (Amendment) Act 2026 has been passed. The most likely vehicle is the 2026/27 budget, typically presented in May or June with a July 1 effective date. We'll update this guide when the change becomes law.

At a Glance: Quick Reference

The full rate schedule and the rules that affect it, in one place. For details on any row, jump to the relevant section above.

Rate schedule by category

Key rules, dates, and discounts

Bottom Line: What To Do Today

A short, concrete checklist if you own (or plan to own) property in The Bahamas:

• Find your assessment number. It's on your last property tax bill or available from the Department of Inland Revenue. Nothing else can happen without it.
• Confirm your category. Owner-occupied, residential rental, commercial, or foreign? If you have a duplex or rental units, the four-unit cliff matters more than most people realize.
• Mark March 31 on your calendar. Pay early for the 10% discount. If you can't pay in full, ask Inland Revenue about a payment plan with 25% down.
• If you own multiple homes, designate which one is owner-occupied under section 3(8A). Usually the higher-value home, since the exemption is worth more there.
• If you're 65 or older and Bahamian, apply for the pensioner's discount with your NIB Senior Citizen card. The 50% reduction above the $300,000 exemption is significant on any home over $300,000.
• If you're a first-time homeowner with a $300,000 to $500,000 home, apply for the section 42A five-year exemption as soon as you have the occupancy certificate. The benefit doesn't accrue retroactively.
• If you live in the property less than 183 days a year, remember the $150,000 cap doesn't apply. For high-value homes, the 2025 change has real consequences.
• If your assessment looks wrong, file an objection within 30 days of service. Be ready to deposit the disputed amount first.
• If you have a derelict building or arrears, the new section 42B waiver can erase past arrears in exchange for fixing the building. Get pre-approval before you start.
• If you're buying a home, the owner-occupied declaration is normally filed by your lawyer or loan officer as part of the closing paperwork. Confirm with them that the right designation is being filed so your first-year bill comes out correctly.
• If you're selling a home, any outstanding property tax has to be cleared before the conveyance can be completed. Section 25 makes the tax a first charge on the property, so the closing lawyer handles the payoff out of the sale proceeds.

The Act is dense and the amendments come thick and fast, but the core math is simple once you know your category. Most Bahamian homeowners with a typical primary residence pay between a few hundred and a few thousand dollars a year. The biggest mistake we see isn't underpaying. It's overpaying because the homeowner doesn't know about an exemption, a discount, or a residency rule that would have applied.

Sources And Further Reading

This guide is built from the actual statutes, the Department of Inland Revenue's published guidance, and Bahamian legal commentary. To verify any specific point or read further:

• Real Property Tax Act, Chapter 375 (2010 consolidation): the principal statute. The version we worked from is published by the Department of Inland Revenue at inlandrevenue.finance.gov.bs. The full canonical version is at laws.bahamas.gov.bs.
• Real Property Tax (Amendment) Act, 2022 (No. 22 of 2022): rate restructure ($300,000 owner-occupied threshold, commercial bands, the four-unit cliff, section 3(8A) one-residence rule, section 18 due date clarified). Available at laws.bahamas.gov.bs.
• Real Property Tax (Amendment) Act, 2025 (No. 43 of 2025): 90-day floor for owner-occupied, 183-day rule for the $150,000 cap, derelict-building $5 minimum on New Providence, section 42B arrears waiver for improved property. Available at laws.bahamas.gov.bs.
• Department of Inland Revenue Real Property Tax page and FAQs: the current rate schedule in plain language, payment instructions, and the assessment process. Available at inlandrevenue.finance.gov.bs/real-property-tax.
• Office of the Prime Minister Statement (May 28, 2025): clarification of owner-occupied residency tiers for foreign homeowners. Available at opm.gov.bs.
• The Tribune (January 19, 2026 and March 27, 2026): coverage of PM Davis's National Address concessions and Minister Halkitis's Senate commitment on the duplex and triplex amendment. Available at tribune242.com.
• Higgs & Johnson, "Modernization of Real Property Taxation in The Bahamas": legal-firm analysis of the 2022 amendment in plain language, useful for cross-checking the rate restructure. Available at higgsjohnson.com.

As of May 2026. This guide is for educational purposes only and does not constitute legal or financial advice. Always verify the current rules with the Department of Inland Revenue and consult a qualified attorney for situation-specific advice.