By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A prominent Bahamian realtor yesterday warned tax administration reforms must not create “bottlenecks” that slow a “strong” property market where sellers are getting up to 95 percent of the asking price.

David Morley, Morley Realty’s owner/broker, told Tribune Business that while he backed the Government’s ambitions to collect all due VAT on property sales it must not allow the changes to “further delay the time it takes to complete” a transaction to nine months or more.

He added that such an outcome would frustrate both buyer and seller, eager to close on their new asset and receive the due sales proceeds respectively, and potentially threaten their desire to participate in Bahamian real estate market activity that “continues to strengthen” following a 2025 second quarter in which New Providence home sales increased almost 40 percent year-over-year.

Mr Morley forecast that, while the overall market will likely remain “consistent” with such trends during the 2025 second half, it will be critical for all participants - the Department of Inland Revenue, attorneys and realtors - to speedily work out the “growing pains” and “wrinkles” associated with the new VAT transfer tax regime that is now just 18 days old.

“My concern for the real estate business in the country is, with the changes that they did, the procedural changes they implemented with regard to conveyances, my concern is it may delay further the time it takes to complete sales,” Mr Morley told this newspaper.

Setting out the basis for his concern, he explained that it was vital the Department of Inland Revenue provide guidance notes to both attorneys and realtors on how the new regime for reporting and administering property sales - and collecting the VAT due on the transaction - is to work and be implemented in practice.

“I know that the Bahamas Real Estate Association has written to the Department of Inland Revenue to seek guidance for real estate agents and our involvement,” Mr Morley said. “We’re only 17 days into the new procedures. We have sales contracted from before June 30, and are now subject to these procedures. It’s not like the Government had a transition period.

“As soon as it came it became law we had to switch to the new procedures. There’s going to be some wrinkles we’re going to have to go through and make some adjustments. I hope there’s no significant additional delays caused to these transactions.”

Mr Morley said the reforms now give attorneys up to 180 days from when a conveyance is executed to pay the due VAT on the sale to the Government. While this might delay the Government receiving its taxes, it would at least know the funds are due and coming, but he added that this could also lengthen the time before Bahamian real estate sellers receive the purchase price.

The Morley Realty chief said the changes, which now require attorneys representing parties in a real estate transaction to obtain a VAT invoice before the conveyance can be executed, mean that the frequent disputes with the Department of Inland Revenue over the purchase price’s validity and amount of tax due must be settled before the invoice is issued and conveyance executed.

Prior to June 30, 2025, such disputes were resolved after the invoice was issued, so Mr Morley warned there now may be “a delay of getting that invoice”. He added: “If that’s the case, and you get your invoice and the conveyance is executed the next day, what’s the rationale for giving 180 days to pay the transfer tax?

“The law states that attorneys are not to disburse the proceeds of sale until the receipt of that invoice. I hope the end result of these procedural changes does not cause a reduction in the collection of VAT transfer tax.

“There’s going to be growing pains involved, and I hope the Department of Inland Revenue provides guidance and irons these things out so it creates an effective path way for getting things done rather than creating additional delays than we were accustomed to prior to June 30.”

Referring to the salesman’s adage that “you always strike a deal while the buyer’s hot”, Mr Morley said nine-month or even greater timelines for closing Bahamian real estate purchases could quickly cool such enthusiasm unless the new VAT procedures are implemented smoothly.

“If the buyer says it takes nine months to close, and the seller says will it take nine months to get my money, they will ask: ‘Do I really want to sell?’,” he added. “I hope the new procedures shorten the closing period required but, at the same time, the Government has to be open-minded.

“There’s going to be a period of adjustment for the coming months. We have to make sure we don’t create a bottleneck, and the Department of Inland Revenue has to add additional staff and focus to run it properly so we avoid delays.

“I think the market is strong. It continues to strengthen and look at demand. Demand is up in every aspect and in every market for the five islands. We’re not at the point of demand exceeding supply and we don’t have diminishing inventory. We continue to have a net positive on inventory every single quarter.”

Morley Realty, in its analysis of data from BREA’s multiple listings system (MLS), which now includes 76 percent of the Association’s registered firms as members, said the three months to end-June 2025 had been “one of the strongest quarters” for sellers with New Providence homes on average achieving 93.3 percent of their asking price.

“The list-to-sale price ratio stayed within a tight band but saw notable shifts. New Providence homes climbed to 93.3 percent, and land jumped to 95.9 percent, one of the strongest quarters for sellers. Grand Bahama land also rose to 95.3 percent,” the firm said in its analysis.

“Abaco and Eleuthera homes posted slight declines, while Exuma held at a strong 94.5 percent despite the small decline. Most sellers across the islands continued to receive offers close to the asking price. And, while new listings declined for a number of islands, New Providence saw quarter-over-quarter increases of 12.7 percent and 53.1 percent for homes and land coming on to the market, respectively.

“New listings declined across most markets this quarter. Exuma and Eleuthera saw the sharpest quarter-over-quarter drops, with Exuma home listings down 53.8 percent and Eleuthera homes down 20.5 percent. Abaco homes posted a modest 8.6 percent gain, and New Providence homes rose by 12.7 percent, indicating stable seller interest in those areas,” Morley Realty added.

“However, land listings in nearly every market fell significantly - Exuma land fell 52.3 percent - highlighting a tightening of available inventory in that segment.” Assessing the market’s overall condition, the firm added: “In the 2025 second quarter the Bahamian real estate market continued to show distinct trends by island and property type, with momentum shifting in several key areas.

“The landscape remained varied, as some markets saw cooling activity while others experienced renewed interest, particularly in land sales..... Overall, the 2025 second quarter reflected a more fragmented and localised market. New Providence and Abaco saw growing activity, while Eleuthera homes closed faster.

“Exuma adjusted from earlier highs but saw renewed land interest. Grand Bahama showed consistency with moderate gains. Looking ahead, shifting inventory and price sensitivity will likely shape market behaviour through the second half of the year.”