The Sunday Business Post Sunday, June 04, 2006 – By Francesca Lombardo

Traditionally known as a hideaway for wealthy American weekenders and holidaymakers, the Bahamas, the most pro-investment of Caribbean countries, has never been a place for the masses.

Many of the 700 islands and inlets forming the archipelagos of the Bahamas, which is located a mere 50 miles off the coast of West Palm Beach in Florida, are in fact privately owned by the likes of Bill Gates and Johnny Depp. As a result the country has gained a reputation as an exclusive retreat for those hiding a way from the clutches of the taxman in swanky villas.

But with government’s increasing commitment to boosting tourism and Hollywood executives eyeing it up as an ideal location for shooting blockbusters, the Bahamas real estate is changing dramatically and is in a boom phase.

However, the choice of bahama real estate properties available has also expanded significantly, and now ranges from beachfront villas to boutique condominiums to luxury Bahamas property. It is not unusual today to snap up a quarter of an acre of land for around €10,000 or a one-bedroom apartment in a two-storey cottage for as little as €219,000.

‘‘For many years, the Bahamas were identified with the capital Nassau, where the choice of properties was quite poor,” said Dominic Pickering, USA general manager of McAnthony Realty. ‘‘You either had the multi-million-dollar mansion or cheap homes built mainly for locals which by no means met the standards of the holiday homes sought by foreigners. ‘‘Things have changed lately, thanks to a pro-tourism policy introduced by the government in 1993, which only now is showing its most evident effects.”

To stimulate tourism, which along with offshore banking is the country’s main industry, the Hotel Encouragement Act was enacted with a view to creating more short-let accommodation for tourists.

Christopher E Lightbourn, a successful Bahamas real estate developer, said that exempting buyers from paying property tax and tax on rental income until 2015 and exempting developers from tax on construction and building material had pushed prices down significantly.

‘‘To meet the Hotel Encouragement Act’s standards, a property needs to be available for rent for a minimum 180 days a year, therefore serving as a hotel for tourists,” he said.

According to Dominic Pickering, this law has not only encouraged tourism but also a flow of European budget buyers. ‘‘Maintaining Bahamas properties if you lived in Europe used to be exorbitantly expensive, but the hotel-condominium concept where you own the property freehold is financially a very viable solution,” he said.

‘‘Not only you can now buy a fully kitted out modern apartment in a cottage from as little as €200,000, but your property will yield a strong rental income thanks to the tourists flocking in all year round, especially from the USA. It’s a buy and lock-away solution.”

Red tape has been cut down, meaning opening bank accounts and getting access to finance is easier. ‘‘There are no restrictions on buying, since a resident’s permit is given to everyone as long as they have a bank account in the country and purchase a home,” said Lightbourn.

Among the pluses is capital appreciation, which varies from 15 to 30 per cent a year and the guarantee of buying in one of the most politically stable Caribbean countries, with a strong economy reflecting that of the US.

‘‘These are all aspects that need to be considered when you buy in a far-flung destination,” said Pickering.

Grand Bahama Real Estate

Dubbed the Venice of the Caribbean for its numerous water canals, Grand Bahama is the second-most visited island in the archipelago, boasting kilometres of white sandy beaches, indigenous plants and a natural park with one of the oldest cave systems in the world.

With Johnny Depp camping out in the Grand Bahama Sea on a yacht owned by Nicolas Cage for nine months while filming Pirates of the Caribbean two and three, the island has often made headlines over the past year.

House prices here are 20 per cent cheaper than Nassau Bahamas real estate, and the island is scarcely populated and has strong restrictions on planning permission.

However, a local film studio has plans over the next five years to build a theme park the size of Orlando’s Universal Studios and a 18-hole golf course; this is having a major impact on the local property market, both from a capital appreciation and rental-yield perspective, according t o Dominic Pickering.

During the filming of the Pirates of the Caribbean sequel, a British couple who live in the Bahamas, Barby and Jon Badham, claimed to have been offered $10,000 per week by the production company to rent out their canal-front home.

One place likely to profit from this growing film activity and demand for tourist houses is Basset Cove, a fully fenced-off plan development of 11 cottages and townhouses on five acres of land, with private access to a beach, clubhouse and swimming pool. Prices start at just over €505,000.

Eleuthera

Famous for hosting Prince Charles and Princess Diana in 1982, Eleuthera is enjoying a renaissance following a period of oblivion after the hurricane of 1999. The island is fast becoming a fashionable destination for those wanting to escape the hustle and bustle of Nassau; boasting white sandy beaches and coral reefs, it is already home to celebrities such as Lenny Kravitz and Patti LaBelle.

‘‘The property market here is booming, with house prices having grown 30 per cent over the last year,” said Lightbourn, who is the developer of Pineapple Fields, a recently built resort, which meets condominium hotel standards.

Just 20 minutes’ drive from Governors Harbour, one of the three airports of the island, Pineapple Fields is a fully-managed beachfront resort offering 36 one and two-bedroom apartments in two-storey cottages on over 80 acres of land which will accommodate further units in the future.

Prices at Pineapple Fields start from €220,816.

FACT BOX

The main banks in the Bahamas are the First Caribbean Bank and the Royal Bank of Canada.

Mortgage interest rates are around seven per cent.

The minimum deposit is 30 per cent of the purchase price.

The local currency is the Bahamian dollar, which is often referred to as B. Dollars, and has the same value as the US dollar.

Stamp duty is on a sliding scale but most properties fall into the five per cent range.

The Hotel Encouragement Act exempts buyers from property tax until 2015. It also enables developers to obtain materials for building with a much lower import duty and those savings are passed onto the buyer.

Both Virgin Atlantic and British Airways operate weekly direct flights to Nassau from London.