The International Persons Landholding Act, 1993
The repeal on the 1st January, 1994 of The Immovable Property (Acquisition by Foreign Persons) Act drew a sigh of relief from many attorneys and real estate agents. For years, these professionals had complained that the Act made the acquisition of land in The Bahamas by foreign persons cumbersome and that it acted as a deterrent to legitimate investment.
The International Persons Landholding Act 1993 encourages foreigners or companies owned by them to purchase a second home in The Bahamas as this area was thought to have the most significant potential. If a foreigner acquires a single family dwelling or vacant land to be used in the construction of such a dwelling then he no longer need obtain a permit from the Government (specifically the Investments Board) prior to the purchase. He need only register the acquisition subsequently with the Investments Board.
Permanent residents of The Bahamas and foreigners who inherit property in the Bahamas are now treated more kindly. In neither case are they to obtain a permit before acquiring land but must merely register subsequently.
The foreigner will require a permit however if (1) the property is undeveloped land and of five acres in size or larger, or (2) the property is not a private residence, or it is not intended for development as such.
Failure to obtain a permit will render the acquisition null and void but the foreigner will be entitled to recover all monies paid in consideration of the acquisition less any legitimate deductions. If a permit has been granted for the acquisition of land and the intended usage changes then the permit must be varied by the Board otherwise it will be invalid.
A registration certificate or permit must be included along with title documents to be recorded in the Registrar General's Office otherwise the recording will be null and void.
The new act is not intended to be a stumbling block for legitimate credit transactions. It provides that licensed banks, trust and insurance companies who acquire an interest in or take possession of property under a Court Order must register that acquisition or fact of possession. Acquisition by way of foreclosure under a mortgage or of land acquired by an authorised foreign state will not require a permit but must be registered.
Foreigners are not required to obtain permits, register leases or letting agreements unless they are for trade or business purposes and the term can exceed 21 years.
In line with its policy of actively encouraging foreign investment, the government has included in this Act a provision that a foreigner no longer pays a double rate of stamp duty. He now pays the same single rate as a Bahamian.
Furthermore, a foreigner who owns a home in the Bahamas may now obtain an annual home owner resident card upon application and payment of a fee to the Director of Immigration. The Card authorises the entry of the holder and his immediate family. Their stay in the Bahamas is authorised provided there are no restrictions for policy reasons or under the Immigration Act.