By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Bahamian realtors are seeking “a period of consistency” on real estate-related taxation in a bid to eliminate annual Budget “fluctuations” they fear unnerve both Bahamian and foreign investors.

David Morley, broker/owner at Morley Realty, told Tribune Business that the Bahamas Real Estate Association (BREA) has been advising the Government to halt the constant adjustments to VAT and real property tax rates/structures to allow the market to settle and enjoy a period of tax-related certainty and calm.

Speaking after Michael Halkitis, minister of economic affairs, said there will be no new and/or increased taxes unveiled with today’s 2025-2026 Budget, he added that he is “not anticipating any major announcements or concerns” that could disrupt the Bahamian real estate sector or wider economy especially given that a general election has to be called by September 2026.

“In all fairness I don’t anticipate any major changes,” Mr Morley told this newspaper. “I know, for example, that BREA has been trying to get the point across to them that, especially with international investors, you can’t keep changing taxes. We need to keep them consistent.

“When someone is going to invest a couple of million dollars in buying a property, they don’t need the fear that VAT will next year go up to 15 percent or down to 8 percent. They need comfort that taxes are not going to fluctuate and will stay fairly consistent from year to year.”

This has not been the practice in The Bahamas. Real estate taxes have been viewed by successive administrations as a major revenue earner for the Public Treasury, and annual Budgets have consistently - almost on an annual basis - unveiled changes to VAT and real property tax rates and structures in a bid to maximise this income source as well as administrative changes seeking to crack down on evasion.

Mr Morley, though, pointing out that property, land and real estate in general are not liquid assets easy and/or quick to sell, explained that a more seamless and consistent tax policy that is largely unchanged from year-to-year would provide a further stimulus to already-significant sales activity and buyer interest.

Besides the VAT levied on the actual sales price, he added that consistency is also required on real property tax. “You don’t want to buy a home today and be paying $10,000 in annual real property tax and, all of a sudden, the Government decides it needs more money and changes the tax rate and structure so that it goes from $10,000 to $15,000,” the Morley Realty chief told Tribune Business.

“From an investment perspective, that’s not a comfortable feeling because you have no control over that. BREA has been discussing with the Government the need to have a period of consistency as it relates to taxation. I think that’s the message BREA is trying to convey.”

Mr Morley added that Bahamian realtors are “applauding” the Department of Inland Revenue’s drive to collect all taxes due and outstanding, target long-time delinquents and, if necessary, seize and sell-off their properties via auction to recover the liabilities. He added that it was especially vital that the tax authority ensure all pay their fair share rather than hike rates because of consistent non-payers.

“In the past, Bahamians were never overly concerned about paying real property tax because they only had to make it good when they sold a home or property,” Mr Morley recalled. “The Government, in the past year, has been exercising its power of sale to auction off delinquent properties.”

While these sales, at present, do not include Bahamian-owned owner-occupier properties, Mr Morley predicted that “at some point in time” they would have to be included in these auctions although he acknowledged “that’s such a tough thing” for any government because of the general election votes impact.

“Personally I don’t anticipate any major announcements or changes,” he added of today’s Budget unveiling. “I’m hoping they take BREA’s advice and try to keep it consistent. The other thing is to make sure all businesses that are conducting business in this country have a Business Licence and, if eligible to be VAT registered, are so and taxes and paid to the Government.

“It’s about making sure all are treated equal, and VAT and business taxes apply to everyone. It’s a situation where it levels the playing field. You cannot always keep going after the ones who are compliant.”

Meanwhile Mario Carey, principal of Better Homes and Gardens Real Estate MCR Group Bahamas, told Tribune Business that the Government should reduce the burden and challenges associated with home ownership by Bahamians by creating an incentive package specifically targeted at multi-family home development.

Arguing that this will further “empower” Bahamians, by enabling them to offset mortgage and construction costs using rental income from leasing out several units, he asserted that the “single family home model is failing”. Mr Carey said that, when he evaluated all bank-foreclosed residential properties several years ago, some “99 percent” of this distressed real estate was single family homes.

“There’s such a demand for multi-family properties in this country because it allows Bahamians to have more successful real estate investments by offsetting the costs from the rent,” Mr Carey explained to this newspaper. “If there’s anything the Government should look at, it’s empowering Bahamians through multi-family ownership and giving concessions like those they give to condo hotel developers

“Imagine if you built a multi-family property under the same guidelines and how much that would empower them for ownership if they didn’t have to pay duty or being real property tax exempt for ten years like they give to developers building condo hotels. Zoning needs to be more multi-family friendly, the process of zoning properties. It’s a trickle down effect. Zoning, banks, government, that all helps.”

Justifying his call for tax breaks and other incentives to be directed at multi-family homes, Mr Carey told this newspaper: “The single family home model I think is failing. I did this exercise before where I went to every foreclosed residential property of every bank. I looked at all of them and, at every bank, 99 percent were single family and 1 percent were multi-family.

“It was interesting data. I did this a couple of years ago. I don’t know if that number would have changed. But how would the Government not look at that space and see that we do all these things with condo hotels for employment; no duty, no real property tax, and the loopholes that go with that. Create a similar model and call it a ‘multi-family concessions’ model.”