The average price for a home in The Bahamas is $1 million more than a home in Turks and Caicos. If you’re looking to score a dwelling in one of the scenic Caribbean countries, be prepared to have a little extra in your pockets to spend on Bahamian property. Global Property Guide discloses that the housing market in The Bahamas is marginally more expensive than their neighboring nation, Turks & Caicos. While the median price in The Bahamas sits at approximately 3 million USD, Turks & Caicos Islands hold a price of about 2 million USD. It is clear that Turks is more favorable in terms of pricing but it is also common knowledge that it takes much more than a price tag to ensure you are making the right purchase choice with real estate. BE Luxury is discussing what it is like to invest in the two attractive archipelagoes before making your home buying decision, especially if it is for a vacation pad.
This stark difference in average prices demonstrates an important consideration to stick a pin in but shockingly, in discovery, we find that The Bahamas and Turks & Caicos are actually a lot similar in other areas of realty. While analyzing markets for the two countries, there is a swift realization that it is going to take digging deeper into statistical data to uncover heavy variances and polarities between them. The sense of paradise - sun, sand and sea isn’t the only thing that aligns for these tropical nations. Both present pivotal housing market trends and opportunities that mirror each other, overall.
Trends reveal strong growth
With average prices hitting over a million dollars, it’s normal to wonder what’s driving the numbers so high. The answer is low inventory and high demand. Investors are seeking homes in the two nations way more than sellers are supplying or making available. The noteworthy housing shortage is playing a major role in heating things up and creating extremely competitive markets. Homes are indeed selling, we can tell you. Turks Caicos & The Bahamas have truly been seeing unprecedented numbers in property sales as of recent and the markets are currently booming. According to publications, there are percentage increases in just about every segment. In fact, the sales value of properties sold in the Bahamas have soared by 73% quarter-over-quarter. During the first quarter of 2022, the sales volume of condominiums in Turks & Caicos increased by 61.53% with an average of only 162 days on market. Real estate companies are announcing record-making totals and solid performances between this year and last year. Buyers are evidently undeterred by the high prices. This doesn’t come by surprise. The excess demand is powered by the work from home phenomenon that was developed during the Covid-19 pandemic. There are many people who prefer to be isolated on a beautiful serene island and would rather make paradise their homes. We’ve noticed that there is also momentum crawling from the tourism bounce back. Tourists are traveling again and investors are seeing paramount value in securing vacation homes for themselves or to place on rent.
Here’s what people are buying …
Quality luxurious homes are sweeping the markets in both Turks & Caicos and The Bahamas. Home-buyers are desiring state-of-the-art waterfront properties more than ever to get the true experience of paradisiacal living. Surrounded by panoramic beach views, gated communities and high-end neighborhoods seem to be the popular picks among others. Investors are prioritizing elevated residential arrangements and sales are flourishing within this segment. Whether it’s a splendor condo, a posh villa, and or a grand estate, these are the trendy development purchases on the two alluring islands within the Caribbean.
Here’s what investors are paying…
There’s still more to factor in when purchasing real estate in either country - the transaction costs. The fees associated with making the property sale are a bit steep but are pretty comparable in both areas. Typical costs incurred are stamp duties, legal fees and real estate commissions. In the Bahamas, stamp duties are very progressive and range between 2.5% - 10%. The legal fees are 2.5% on average. In Turks and Caicos, the stamp duty is 2.5% - 8%. For the legal fees, expenditure is usually 2% on properties worth at least $700,000 and 0.85% on properties worth $1 million or more. As for commissions, the two countries have the same standards. On improved properties, 10% of the sales price has to be paid and on unimproved vacant properties, 6% of the sales price has to be paid. Although these costs are normally paid by the seller, it is still something buyers should take into account. Additionally, in the Bahamas, service fees (legal and commissions) are subject to an additional 12% VAT.
When it comes to taxes, investors can take comfort in The Bahamas and Turks & Caicos. These islands are known to be the ultimate destinations for investors seeking tax breaks. Properties are subject to very little taxes , if even at all. As mentioned earlier, in The Bahamas, there is a flat tax called Value Added Tax (VAT) levied on properties and fees. Home buyers are also liable to an annual Real Property Tax but under some conditions they can be exempted from paying this. It is important to discuss this with your real estate agent to understand what exactly is required from you. The government in Turks and Caicos does not trouble purchasers about taxes at all. This is why many see it as the literal tax haven out of the two. However, the utmost advantage lies in the fact that you won’t encounter personal income tax, inheritance tax or corporate taxes when residing in either nation.
Here’s why people are moving…
The similar investor-friendly laws in the Bahamas and Turks present another reason why the nations are seeing a soaring demand from foreign investment. These countries have no restriction on foreign residency. Any noncitizen who obtains a home valued $750,000 or more in the Bahamas can apply for permanent residency. There is also a minimum level of investment for foreign nationals to qualify in Turks & Caicos. Furthermore, policies in the two countries are pro-landlord. If you find that you do not want to fully reside in either island and would rather rent your property for greater returns, then these are the ideal places. Landlords have the right to freely set their terms for rentals and negotiate without limitations. All of these aspects have propelled demand in both The Bahamas and Turks & Caicos.
We bet you imagined reading this analysis would make your decision between the countries easier but the reality is, it probably made things harder. There are some market twins in the Caribbean and they just happen to be The Bahamas and Turks & Caicos. If you are trying to determine which of the countries provide more appealing conditions for investing in real estate, it is best to think a little more outside of the economy and put some regard into the way of life you’d like to live. Lifestyle considerations are equally great points to help guide you. Turks & Caicos is made up of fewer islands, therefore there is only so much available land. Regardless of this, many say this is where you’ll get more peace and tranquility. There isn’t a huge amount of hustle and bustle in Turks when compared to The Bahamas. When residing in Bahamian territory, especially in the capital, that is where you’ll get a mixture of city-life and island life.
Let us help you better determine!
We’ve made a dedicated effort to sit these countries side by side and evaluate their markets. In spite of only having a few small industry differences, they each offer some sort of uniqueness that can fit your tailored needs. They’re two of the richest nations in their region and remain top options for investors to choose between. Let BE Luxury Real Estate assist in making your decision one of ease. We offer a skilled team of advisors possessing top-grade area knowledge of both islands to help you find the perfect property. While inflation conversations fluster the world, it’s promising to learn that these countries are fundamentally headed into the same direction with real estate in this climate. Once merely places for people to visit following global recessions and hurricane devastations, The Bahamas and Turks & Caicos have made drastic comebacks with irresistible home-ownership environments.