A buyer and seller agree on a number. Attorneys draft the conveyance. Then the Department of Inland Revenue looks at that number and decides it doesn't believe it.
This is not a rare edge case in New Providence real estate. It is a recurring, well-documented friction point that has shown up in Bahamian business press for years, and as of July 2025 it now sits earlier in the closing process than most buyers expect, before the deed is even signed rather than after. If you are under contract on a home in Lyford Cay, Old Fort Bay, Cable Beach, or anywhere else on the island, the gap between your agreed price and the government's opinion of value is worth understanding before you get to the closing table, not during it.
The Government Has Its Own Opinion Of What Your Home Is Worth
Every conveyance in The Bahamas triggers a Value Added Tax payment, calculated on whichever is higher: the price on the contract or Inland Revenue's own appraisal. In practice, that second figure comes from the real property tax valuation the department already has on file for that address.
The trouble starts when the two numbers disagree by a meaningful margin. In October 2024, Dexter Fernander, the Department of Inland Revenue's operations manager, told Tribune Business the department typically queries a sale price once it falls roughly 15 percent above or below the property's assigned real property tax valuation. Once queried, the file stalls until someone resolves the gap.
Carla Sweeting, president of the Bahamas Real Estate Association, described what that uncertainty feels like from inside a transaction: "you hold your breath every time there is a sale," as she told Tribune Business in October 2024. Adrian White, the St. Anne's MP and a commercial attorney who has personally handled deals caught in this exact bind, put it more bluntly around the same time, accusing the tax authority of "creating and setting the market price themselves" when its valuations run ahead of what buyers are actually paying.
The problem hasn't faded. In May 2026, Mario Carey, president and CEO of Better Homes & Gardens Real Estate MCR Bahamas, was still telling Tribune Business that these disputes cause "a huge confusion" that can delay closings or collapse them outright, with buyers, sellers, banks, agents, and attorneys all losing time and money while the file sits unresolved.
Why This Cuts Deeper In New Providence Than Almost Anywhere Else
A 15 percent valuation gap on a modest property is an annoyance. On a New Providence luxury property, it is real money and real risk.
Consider the range of what's actually for sale in the island's gated enclaves. Homes in Lyford Cay span roughly $2 million to $40 million depending on lot, water frontage, and privacy. Old Fort Bay, built around a converted 18th-century fort turned private club, has sold through most of its lots and now trades on scarcity as much as square footage. That kind of dispersion, where two homes a few streets apart can differ in value by a factor of ten, makes it much harder for a tax assessor working from a limited set of comparables to land on a defensible number. Mr. White's complaint, that Inland Revenue sometimes finds one high sale in a neighborhood and applies it across the board, is exactly the failure mode you'd expect in a market this uneven.
The market is also moving fast enough to widen the gap on its own. Waterfront sale prices on New Providence rose 15.45 percent during 2025, according to Bahamas Multiple Listing Service data reported by Boat International. When prices climb that quickly, a valuation built on last year's comparables can drift out of step with this year's contract price in either direction, which is precisely the scenario that triggers a DIR query.
The 2025 Rule That Moved The Dispute Earlier
Until recently, this valuation fight typically surfaced after the conveyance was signed, when the document reached Inland Revenue for stamping. The Conveyancing and Law of Property (Amendment) Act, which came into force on July 1, 2025, moved that checkpoint to the front of the process.
Attorney General Ryan Pinder confirmed the change to the Senate during the 2025-2026 budget debate: a new section 40 now requires parties to obtain a VAT invoice from Inland Revenue before the conveyance can be executed at all, not after, as Tribune Business reported from the Senate floor. That invoice is provisional, and the final amount can still shift once the executed document goes back to the department for stamping. Once the deed is signed, the clock changes shape again: the VAT must be paid in full and the conveyance recorded within 180 calendar days, and lenders are barred from disbursing mortgage funds until they've verified that a VAT invoice was actually issued.
A separate obligation runs on its own 30-day clock. Anyone who conveys a beneficial interest in real property, directly or indirectly, must file a declaration with Inland Revenue within 30 days of execution. Miss it, and the transferor and any real estate agents involved are jointly and severally liable for a penalty equal to 3 percent of the consideration.
David Morley, broker-owner of Morley Realty, has argued publicly that this puts agents on the hook for a process they don't control, since attorneys handle the actual filing and payment. Whether or not that criticism gets addressed, the liability sits where the law puts it today.
Here's what changed in practical terms:
| Before July 2025 | Since July 2025 | |
|---|---|---|
| VAT invoice | Requested during stamping, after signing | Required before the conveyance can be executed |
| Signatures | Wet signatures standard practice | Wet signatures required by law; electronic signatures are not valid |
| Payment and recording | No fixed statutory clock | Must be completed within 180 days of execution |
| Beneficial interest declaration | Not a distinct filing requirement | Due within 30 days; 3% penalty for missing it |
| Mortgage disbursement | Tied to attorney's internal timeline | Lenders must verify the VAT invoice before releasing funds |
What This Means If You're Under Contract Right Now
None of this makes New Providence a bad place to buy or sell. It means the timeline you were quoted at the start of the process is a floor, not a guarantee, and the reason it can stretch usually has nothing to do with the buyer, the seller, or the property itself.
A few things are worth doing before you sign anything:
- Ask your attorney to request the VAT invoice as early as possible, since the conveyance cannot be executed without it and the review can take time.
- If your property sits at the high or unusual end of its neighborhood's comparables, an independent appraisal in hand before the dispute starts gives your attorney something concrete to argue with.
- If you're financing the purchase, confirm with your lender how they plan to verify the VAT invoice before disbursing funds, since that step is now a legal requirement rather than a courtesy.
- Plan for wet-signature logistics if you're closing from outside The Bahamas. A digital signature service will not satisfy the conveyance requirement.
A Short FAQ
Does the 10 percent VAT rate still apply to my purchase as a foreign buyer? Yes. Foreign buyers pay a flat 10 percent VAT on the conveyance regardless of price, customarily split evenly with the seller unless the contract says otherwise. The valuation dispute affects what number that 10 percent gets calculated against, not the rate itself.
Can I sign the conveyance remotely if I can't travel to Nassau? You'll need to arrange for a wet, original signature. Electronic signatures are not accepted on Bahamian conveyancing documents.
What happens if the beneficial interest declaration is filed late? The transferor and any real estate agents involved are jointly and severally liable for a penalty of 3 percent of the consideration.
Who actually resolves a valuation dispute with Inland Revenue? Your attorney handles it directly with the department, typically by submitting comparable sales data or an independent appraisal to support the contract price.
A closing timeline in New Providence now depends on more than the buyer and seller agreeing to terms. It depends on whether the government agrees with them too, and how quickly that agreement gets documented. If you're weighing a purchase or sale in Lyford Cay, Old Fort Bay, Cable Beach, or anywhere else on the island, Colibri Bahamas can walk you through what your specific property and price point are likely to face before you're locked into a contract. Schedule a consultation before you sign, not after the file stalls.
