How Much Money Do You Need to Retire in the Bahamas?


The Bahamas’ appeal as a retirement destination is as obvious as its appeal to sun-seeking tourists. There’s no foreign language for English speakers to learn. Its proximity to Florida means it’s close to the grandkids stateside. And there’s the climate, the beaches and the charmingly slow pace of island life.

What tourists don’t benefit from, however, are the qualities from which only residents reap the full benefits. Consider the tax situation – residents save on the absence of income tax, capital gains tax, wealth tax or gift tax. 

Despite what you’ll save on taxes, keep in mind that “island prices” for everything from a pair of shoes to a gallon of milk can seem exorbitant compared to what you’re accustomed to paying. Do your research and adjust your expectations before setting your sights on that beachfront Paradise Island condo.

Residency Rules

People often assume that the world is their proverbial oyster when it comes to relocating for retirement. However, residency rules vary wildly by country: The first step in researching a potential retirement destination is to apprise yourself of the legal and financial requirements for long term, or permanent, residency. If you plan on residing in your new retirement home for only part of the year, less stringent rules may apply.

There are several ways to gain legal permanent residence in the Bahamas, but the easiest – unless you marry a local – remains to buy a property valued at $500,000 or more. If that’s out of your budget, there’s another solution: After purchasing a home in the Bahamas, owners become eligible for a Home Owner’s Resident Card. Similar to the long-term visas or residence permits of other countries – with the exception that these often entail the right to work, which this card explicitly does not – the Resident Card allows homeowners to reside in, as well as freely enter and exit, the country during the one-year duration of its validity. Annually, the card will set you back $500, plus an initial processing fee of $100. If that seems expensive, keep in mind that it’s good for the whole family. Many other nations require separate residence permits, each with its own accompanying fees, for each family member. 


While 700 islands comprise the Bahamas, only 30 are inhabited: The price indexes here refer to the most populated areas, including Nassau, Freeport, Governor’s Harbour and Paradise Island.

Are you planning to buy undeveloped real estate on which you’ll build a new home – or is your goal an owner-occupied existing home? The tax situation for these two options is significantly different, with the former not only more expensive but also more complex.

  • Expect to apply for a permit to buy 5 acres or more of land; in addition, you’ll need to pay approximately 2.5% of the purchase price in legal fees, along with a flat 2.5% tax called “stamp duty,” and 7.5% value added tax or VAT .
  • Real estate taxes on owner-occupied property are more straightforward: In fact, there’s no tax on properties priced at less than $250,000. For more expensive homes, expect to pay between 0.75% and 1%, which is still quite reasonable. 

To forgo the complications of real estate entirely, consider renting. Centrally located apartments are more affordable than you might think: from about $800 for a one bedroom to about $2,125 for a three-bedroom unit in 2018. Compare those prices to Miami, a city also known for its sunshine and beaches, where a one-bedroom averages about $1,800 a month. 

Real estate prices, however, may convince you to wade through the confusing paperwork since a 1,000-square-foot apartment in Nassau, for example, can be found for less than $160,000.

Food, Transportation and Clothing

Blame island life: Whether you need to buy a box of cereal, a car or a pair of jeans, it’s likely that you’re buying imported goods. As a result, you can expect to pay not only the price of the item itself, but also the costs of shipping, freight and customs duties. For example, a midsize car purchased off the lot in Nassau will cost about $15,000 more than a comparable model would in Dublin or Reykjavik: Figure on about $45,000 for a Toyota Corolla or a similar make and model. 

A trip to the grocery store can be a downright puzzling experience due to the hugely divergent pricing – all dependent, of course, on what can be produced locally and what must be imported. A case in point: A mid-range bottle of wine ($20) seems like a bargain compared to a gallon of milk ($13). Staples like bread, rice, produce and local cheese are generally priced more reasonably, but still cost from 10% to 50% more than what you’d pay at home in the U.S.

The Bottom Line

Though the cost of living is a bit more expensive than many retirement destinations, the Bahamas gets good marks for essential quality-of-life categories. To retire comfortably here, your pre-retirement life need not involve a jet-setting lifestyle with offshore bank accounts. The simplicity of living on an island is often its own reward, and that the old adage about how the best things in life are free – sunshine, fresh air and the soothing sound of the surf – actually rings true in a place like the Bahamas.

For more on retiring outside the U.S., see Things to Consider Before Retiring Abroad and What Does Retirement Abroad Cost? To compare the Bahamas to other options, see Find the Top Caribbean Islands for Retirement.

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