Bahamas Rental Income Guide 2026

The Bahamas does not tax rental income. Landlords receive rental payments entirely free of income tax, regardless of whether the property is residential or commercial. There are no withholding taxes on rent paid to non-resident landlords. However, commercial landlords may be required to charge VAT at 10% on commercial rent if their total annual turnover exceeds the BSD 100,000 registration threshold. All landlords must still pay annual real property tax on the property.

Overview — No Income Tax on Rent

Rental income is not subject to income tax in the Bahamas because there is no income tax. Landlords — whether resident individuals, non-resident individuals, companies, or trusts — can receive rental income entirely tax-free. There is no requirement to declare rental income to any tax authority, no rental income tax return to file, and no withholding tax for tenants to deduct. This makes buy-to-let property investment particularly attractive in the Bahamas. The only tax considerations for landlords are real property tax (annual, on the property value) and potential VAT obligations for commercial property.

Residential vs Commercial Rental

The tax treatment differs slightly between residential and commercial rental:

Residential rental — no income tax, no VAT (residential rent is exempt from VAT). Landlords must pay real property tax annually. No registration or filing required.
Commercial rental — no income tax, but VAT at 10% must be charged on rent if the landlord's total annual turnover (including rent) exceeds BSD 100,000. The landlord must register for VAT, charge VAT on rent, file quarterly VAT returns, and remit the VAT collected to the government.

Commercial landlords below the BSD 100,000 threshold are not required to register for VAT and do not charge VAT on rent. Landlords who are not VAT-registered should not charge VAT on their invoices.

Short-Term Rentals & Vacation Properties

Short-term rentals (holiday lets, Airbnb, VRBO) are treated the same as long-term rentals for income tax purposes — no income tax applies. However, operators of short-term rentals should be aware of:

VAT — if annual turnover from short-term lets exceeds BSD 100,000, VAT registration is required and 10% VAT must be charged on bookings
Business license — operating short-term rentals may be considered a business activity requiring a business license (0.75–1.25% of turnover)
Tourism levy — the Ministry of Tourism may require registration and payment of a hotel accommodation levy for certain short-term rental operators
Property tax — real property tax applies regardless of rental type

Most short-term rental platforms (Airbnb, Booking.com) may collect and remit VAT on behalf of hosts. Hosts should verify their obligations with the VAT Department.

Non-Resident Landlords

Non-residents who own property in the Bahamas and receive rental income benefit from the same tax-free treatment as residents. There is no withholding tax on rent paid to non-residents, no requirement for a Bahamian tax representative, and no additional filing obligations for non-resident landlords. However, non-residents should check their home country tax treatment of foreign rental income. For example, US citizens must report worldwide rental income to the IRS even if it is not taxed in the Bahamas, and may be able to claim foreign housing exclusions or deductions. Property management companies in the Bahamas can handle day-to-day operations and remit rental proceeds net of management fees.

FAQs

Do I need to pay tax on my rental income in the Bahamas?

No, rental income is not subject to income tax. You only need to consider VAT (if commercial rent exceeds BSD 100,000) and real property tax (annual, on property value).

Can I deduct property expenses against rental income?

Since there is no income tax on rental income, there is no concept of deducting expenses. However, for VAT purposes, commercial landlords can deduct input VAT on property-related expenses against output VAT collected on rent.

Do I need a business license to rent my property?

For long-term residential rental, generally no. For short-term vacation rentals (Airbnb-style), a business license may be required depending on the scale of operations and local regulations. Check with the Bahamas Investment Authority.

Disclaimer

This guide provides general information about rental income in the Bahamas for the 2026 tax year. Tax laws and VAT obligations may change. Always consult with a qualified Bahamian tax advisor or the VAT Department for advice specific to your situation. InvestmentKit does not provide tax advice.