BY ARIANNA NEELY
JOURNAL STAFF WRITER

Prime Minister Philip Davis, speaking at the House of Assembly in early June, addressed the
ongoing underperformance in the real estate sector regarding VAT collections. He noted that
despite efforts such as amnesty programs and the modernization of systems, these measures have
not resolved the issue of underperformance.
Davis said “From the public utterances of the real estate professionals, the Ministry of Finance
has estimated that government is being deprived of at least $100 million a year in annual
revenue, with most of it, if not all, related to foreign purchases of Bahamian real estate. In this
budget, we are proposing a comprehensive set of measures to address this leakage.”
The under reporting of real estate transactions in relation to VAT on property sales remains a
growing concern for the Government of The Bahamas. Prime Minister Davis emphasized in his
speech that this act of underreporting is one of the most apparent forms of leakage contributing
to the sector’s underperformance. He also discussed the repercussions this continued trend will
have.
“The proposed amendment to the VAT Act provides penalties for underreporting, including, in
the most extreme cases, an application to the Supreme Court for forfeiture to the Treasury.”
In response to this situation, Bahamas Real Estate Association (B.R.E.A.) President Carla
Sweeting spoke with media and is recommending closer collaboration between the real estate
sector and government agencies, as officials allege the country is losing approximately $100
million annually in VAT returns due to unreported or underreported property transactions,
particularly involving foreign buyers.
“I have been made aware that this is the estimate that the government is saying they’re losing on
real estate transactions,” Sweeting said in a recent interview. “I am not aware of who and how
that is happening, but if that is the case, then the government has every right to look at avenues
in how to bridge that gap.”
The Prime Minister recently suggested that such evasive practices likely involve real estate
professionals. However, Sweeting pushed back on that assumption, stating, “I am not aware of
any B.R.E.A. member who is involved in fixing or doing anything they ought not to be doing to
encourage or to evade paying taxes on a real estate transaction.”
She added, “If there are B.R.E.A.-licensed agents out there who are doing things they ought not
to be doing, they need to be reported to our association.”
While B.R.E.A. can only discipline members of its own body, Sweeting urged that any unethical
activity by non-members should be reported to the relevant authorities. “We are not aware that
anybody in our industry is doing this, but if we are made aware, obviously we will take that
matter very seriously and we will discipline them according to our act,” she said. In response to
newly implemented compliance laws, BREA has already taken steps to inform and guide its
members.

“The day the Bills were enacted in Parliament our legislative committee pulled out pertinent
sections and we have disseminated that to all of our members. We have encouraged them to
adhere to the new laws,” Sweeting explained.
Sweeting also raised concerns about growing delays in closing real estate transactions. “At the
moment you’re looking at anywhere from 90 to 120 days, and I’ve been reliably informed that it
could take up to three months for the government agencies… to acknowledge when a transaction
is uploaded onto their portals and payment made,” she said. “You could be looking at six to eight
months for a real estate transaction to close.”
She suggested that such delays could deter both foreign and local participants. “No one wants to
take their property off the market for that length of time and not be compensated.” In comparison
to regional markets, Sweeting noted, “In terms of the world, we’re way, way behind. But in terms
of the Caribbean, Cayman could close a transaction in two weeks. Turks and Caicos, they’re 60
to 90 days.”
Sweeting said B.R.E.A. is open to discussing digital tools or data-sharing platforms with the
government to promote better oversight of real estate transactions. “We would gladly sit with any
government agency or entity to discuss data-sharing platforms or any other type of process to
enhance that the proper and legal way to transfer real estate in this country is done, but done in a
timely fashion,” she said.
However, she also noted concerns about fairness in the newly introduced legislation. “What we
are concerned with these new bills is that we don’t feel that there’s equity.”
On the economic side, Sweeting emphasized the importance of real estate to national revenue.
“Prior to VAT being introduced, the stamp duty collected on real estate transactions was the third
largest in the country. It would surprise a lot of people, I think, to know how much money is
generated through real estate in terms of taxes collected.”
She warned that delays in transaction closings would slow down government revenue collection
as well. “Can you imagine every transaction that typically takes three months is now going to
take six? They’re not going to collect in a year what they would have collected in previous
years,” she said.
Sweeting also highlighted ongoing concerns about unauthorized foreign agents selling Bahamian
property, especially in the Family Islands. She pointed to a case in Eleuthera where a foreign
individual is allegedly operating without a license. “He certainly doesn’t have a BREA license, so
he’s not eligible to engage in the practice of real estate and he’s not paying back,” she said. “We
have reported him to the relevant authorities, and he is on their radar.”
Sweeting clarified that B.R.E.A. can only discipline its members, but will continue to report
non-compliant actors to both local authorities and international partners such as the Florida
Board of Real Estate Agents. “Nobody wants to see a foreigner coming in here selling Bahamian
property and not allowing a Bahamian to have that opportunity, not only to buy it, to sell it, but
as a real estate agent, to represent as per the law,” she said.
As the sector continues to navigate new compliance demands, Sweeting stressed that
transparency and enforcement must be consistent and fair to all. “We don’t know the whole
story… We’re only hearing bits and pieces from various people that this is the case.”