Beautiful seashores, hotter climates, and a relaxed life-style are just some causes you would possibly journey to the Bahamas.
However have you ever ever thought of making your summer season vacation spot a every day actuality?
In keeping with the World Migration Report, the Bahamas has round 64,000 worldwide migrants, which is comparatively excessive contemplating its small inhabitants measurement. And with all of the earnings perks that include the island nation, it’s no marvel.
The Bahamas has one of many highest GDP per capita within the Caribbean. Mixed with tax advantages like no capital features or inheritance taxes, high-net-worth people could considerably construct their nest eggs and move on extra wealth to their kids.
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However on the similar time, chances are you’ll want to arrange for added prices like stamp charges, import duties, and value-added tax, which could hike your every day residing bills.
Sound fascinating? Properly, buckle your seatbelts and put together for takeoff for 3 tax advantages that may make you wish to retire within the Bahamas.
Retiring within the Bahamas: Is it a good suggestion?
There are a number of steps for U.S. residents to retire within the Bahamas. Under is a instructed checklist:
- First, you’ll want to use for and acquire a single-entry visa. Usually, these aren’t thought of tough to acquire.
- When you’ve had three profitable journeys to the Bahamas with single-entry visas, you may apply for a multiple-entry visa, which can mean you can keep for a interval longer than 90 days.
However issues get dear in case you’re trying to set up a everlasting residency within the Bahamas as a U.S. retiree.
One of many main methods to determine everlasting residence includes buying property value not less than $1,000,000 and holding it for not less than ten years.
Due to this excessive bar of entry, you would possibly wish to preserve a Bahamas “residence allow” as a substitute (or whilst you’re ready on your ten years to complete). This annual allow has a number of preliminary necessities, together with:
- Proof you can help your self, usually out of your financial institution or a Licensed Public Accountant (CPA).
- Medical, marriage, and start certificates.
- Two character references.
Not like the visa perks that include Panama retirement tax advantages, retiring within the Bahamas doesn’t get you particular reductions on utility payments, transportation, or medicines. Nevertheless, the Bahamas do supply one thing Panama doesn’t for U.S. retirees: No capital features tax.
Bahamas capital features tax
Bahamian residents and resident aliens aren’t levied capital features tax on belongings like inventory or actual property within the Bahamas.
This may be excellent news for U.S. buyers who pay a federal tax between 10% and 37% on capital features plus state taxes.
Though you’ll nonetheless be topic to federal taxes within the Bahamas, chances are you’ll not need to pay state taxes on capital features.
That is significantly true in case you promote a non-U.S. asset and the state you’re leaving makes use of the next components when figuring out your resident tax standing:
- Time spent inside state traces.
- Property possession, voter registration, or a driver’s license.
- Mailing deal with or household and enterprise ties within the state.
However it’s essential to notice that every state determines your “tax residency” a bit of in another way. You should definitely try your state’s Division of Income website for particular tips earlier than you progress.
Bahamas tax fee on retirement earnings
One other good thing about retiring within the Bahamas is that there isn’t a tax on retirement earnings. As an alternative, residents are taxed on different forms of transactions (extra on these later).
Like with capital features, you’ll possible nonetheless have to pay federal earnings tax charges as a U.S. retiree. However you could possibly exclude a certain quantity of earnings with the International Earned Earnings Exclusion (FEIE). Necessities embrace:
- Having foreign-earned earnings that was earned whereas within the Bahamas.
- Establishing your tax residence within the Bahamas, and
- Residing within the Bahamas for a complete calendar 12 months, OR
- Being bodily current within the Bahamas for not less than 330 full days for 12 consecutive months.
When you’re eligible for the FEIE, chances are you’ll exclude as much as $130,000 of foreign-earned earnings in 2025. This contains any freelance work performed on the aspect, commissions, or wage earnings.
Nevertheless, it doesn’t embrace Social Safety or different retirement advantages like annuities or pensions.
For extra info, try Kiplinger’s report on Residing Overseas Tax Breaks.
Retirement within the Bahamas might change into a actuality with no earnings, capital features, or wealth taxes.
(Picture credit score: Getty Photographs)
The Bahamas has no inheritance, property, wealth, or reward taxes
As reported by Kiplinger, not less than three international locations for retirement don’t have any inheritance tax.
However the Bahamas sweetens the pot by not levying property, wealth, or reward taxes both. This may be main, contemplating fashionable retirement international locations like France or Germany can levy among the highest inheritance taxes on this planet.
Plus, not like one of many tax causes to not retire in Portugal, there isn’t a “pressured heirship” within the Bahamas. This implies you may have extra management over who receives your belongings and the way a lot you’d like to provide.
In fact, as with different taxes on this checklist, you should still need to pay U.S. federal tax on inheritances. And there could also be some taxes you haven’t paid earlier than when planning a transfer to the Bahamas.
What are the tax disadvantages of residing within the Bahamas?
Though the Bahamas have very low taxes in just a few areas, different tax charges could be comparatively excessive in comparison with what you’re presently paying. For example:
- Import Duties. As a result of the Bahamas are an island nation, it depends closely on imported items. Levied duties can vary considerably, with the best being 220%. Comparatively, mainland U.S. import duties can peak at 37.5% (although tariffs could influence costs sooner or later).
- Worth Added Tax (VAT). Just like a gross sales tax, Bahamian VAT is about 10% for many items and providers (exceptions could embrace meals and medical providers). Relying on the place you reside within the U.S., your state could have low gross sales taxes.
- Stamp obligation. Akin to an actual property switch tax, Bahamian properties bought for over $100,000 levy a ten% obligation on the client (2.5% on purchases decrease than that quantity). By comparability, states within the U.S. usually levy as much as a 4% tax, per Property Shark.
Speaking to a trusted tax skilled for steering in your monetary state of affairs could also be one of the simplest ways to know how a lot you and your loved ones may very well be affected by taxes within the Bahamas. However regardless of your particular circumstances, nearly each U.S. retiree may very well be impacted by increased prices on sure items and housing.
Bahamas value of residing
Sadly, the Bahamas have the next nationwide common value of residing than many locations within the U.S. on account of import charges and duties.
On-line database Numbeo, as of June 2025, reveals how the typical retiree residing within the Bahamas could pay increased prices:
- Whereas 1-bedroom hire costs within the Bahamas could be as much as 24% cheaper than within the U.S., 3-bedroom residences are usually about 25% to 42% dearer than their American counterparts.
- Clothes like denims, attire, or trainers could also be as much as 26% extra pricey than within the U.S.
- Groceries are usually pricier within the Bahamas. For instance, milk can value 299.5% greater than within the U.S., whereas tomatoes and eggs are 45% to 80% dearer.
Total, client costs within the Bahamas are 8.8% increased than the U.S. nationally. You should definitely speak to your tax advisor and clarify your monetary circumstances earlier than relocating to the Bahamas.
