By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Realtors and attorneys yesterday praised the Government’s “huge” move in raising the economic permanent residence threshold to $1m and diversifying how wealthy foreign investors can qualify.

Prime Minister Philip Davis KC, unveiling the 2024-2025 Budget in the House of Assembly, disclosed that the Government is raising the minimum investment required by one-third or $250,000, from $750,000 to $1m, but expatriates are no longer solely restricted to real estate purchases to qualify.

In a move long-argued for by the Bahamian financial services, legal and real estate industries, he said persons will now be able to qualify by acquiring what he described as “zero coupon bonds” from the Central Bank. The proceeds will be invested in education, health, Family Island infrastructure development and culture, he promised, and not go into the Government’s consolidated fund to finance operational expenses.

And, in a bid to ensure investors value economic permanent residency, become established members of this society and do not abuse this status, Mr Davis added that as a condition of obtaining their permits they must hold either of these assets - real estate or bond - for a minimum ten years.

“The requirements for application for economic permanent residency have been updated. The minimum investment requirements to qualify for economic permanent residency status will be increased and diversified,” the Prime Minister said.

“Before, the requirement only called for $750,000 in real estate investments. This will now increase to $1m in real estate investments and or the purchase of zero coupon bonds from the Central Bank of The Bahamas. In both cases, the asset must be held for a minimum of ten years. This measure will come into effect on January 1, 2025.

“The legislation is clear that the proceeds from these bonds can only be used for investment in education, health, culture and Family Island infrastructure, and not to fund ordinary expenses of the Government. We are also amending the Immigration Act to clarify that deed of gift cannot be used by foreigners to make application or qualify for permanent residency.”

Mario Carey, the Better Homes & Gardens Real Estate MCR Group founder, who in January this year called for the economic permanent residency benchmark to be raised to $1m, backed both the increase, diversification and terms attached while suggesting that another way to qualify should be owning a business that employs Bahamians in the domestic economy.

He told Tribune Business of the move: “That’s good. That’s very good. That’s huge. I would think another way to qualify would be if they have a business here. That would have been a really good one... bringing a unique business to The Bahamas that employs Bahamians.

“Those are very popular all over the world for countries that are gaining needed skills, new ideas and global-focused businesses. We might be missing the boat on that one and need to rethink it, but it’s a good one. I think ten years is long but it’s a good one. Our real estate market is not meant for flipping.”

Richard Lightbourn, the former FNM MP and consultant/partner at the McKinney, Bancroft & Hughes law firm, echoed Mr Carey in backing the Government’s decision to impose the ten-year term as a means to prevent foreign investors from simply acquiring status in The Bahamas, rapidly flipping their property purchases for profit, and exiting without making a meaningful economic contribution.

“That could easily be higher as far as I’m concerned. I don’t think that will have much of a negative impact,” he said of the $1m threshold. “I know it’s quite a common practice that, if you want for some reason to become a permanent resident, it entitles them to certain tax concessions in their own country.

“People apply for permanent residency, they get it because they have spent so much. That’s where it was headed. That probably makes sense [the ten years]. From my viewpoint I felt that something like that should have been introduced.

“People were getting permanent residency, saying thank you very much and selling the place. The Government was getting VAT on the resale but the goal with permanent residency was for them to live here and that by itself brings money into the country, buying goods and doing good for the economy.”

Mike Lightbourn, Richard’s brother and head of Coldwell Banker Lightbourn Realty, predicted to this newspaper that the economic permanent residency changes unveiled by the Prime Minister will have no impact on investor demand for high-end Bahamian real estate. “I think the general public will certainly look more favourably on it,” he said. “I don’t have a problem with it personally.”

Mr Carey, meanwhile, also praised the Government’s move to review the little it is earning from investors through Crown Land seabed leases. “It is not right to sign away acres of seabed to commercial ventures for minimal amounts, something I am sorry to say has occurred in the past. No more,” Mr Davis said.

“The Government is currently undergoing a comprehensive evaluation of all seabed leases in order to guarantee that we are receiving fair compensation for the use of our resources.” Mr Carey said of the move: “I think that’s a brilliant idea. I think the Government should look at figuring out how to empower Bahamians to make money out of seabed leases.

“Some could be through leasing the seabed for buoy farms for boats so they just don’t throw their anchors overboard. People just throw their anchors anywhere. How can you have a mega yacht anchored off Atlantis, stay for nothing and pay no dues and fees? It makes no sense. The Government should offer that business out to people.”