Anticipating The Cost Of Living In The Bahamas And When To Rent Or Buy

The Bahamas has no taxes on sales, income or capital gains, so the government must make its money from import taxes and duties. The cost of living in the Bahamas can prove relatively high compared to other retirement destinations in the western hemisphere.

The Cost of Living in the Bahamas: How it Compares to the U.S.

The United States and the Bahamas have two entirely different economic structures, and where one offers savings, the other has high costs. Due to the lack of domestic taxes in the Bahamas, food, cars and clothing are typically more expensive compared to the United States.
Businesses must pay high taxes to import goods, and those expenses are often passed down to the buyers. But as sticker prices on basic items are higher than those in the United States, Bahamians are compensated by the savings on their tax bill.
By American standards, the cost of living in Nassau, the capital city of the Bahamas, is comparable to that of New York City. Food and personal care purchases are close to a third higher in Nassau, but housing is far more expensive in New York City. Living in Nassau is almost a third more expensive than living in Chicago, and nearly a fourth more expensive than living in Dallas.

How Stable is the Bahamian Currency?

The Bahamian dollar is based on the U.S. dollar system, where one Bahamian dollar equals 100 pennies. Both currencies are equivalent–one U.S. dollar is equal to one Bahamian dollar. You can spend either U.S. or Bahamian dollars while on the islands, but Bahamian money isn’t very valuable outside of the commonwealth.
Bahamian currency is not based on a gold standard, or the fixed weight of gold. Instead, the Central Bank of the Bahamas, similar to the U.S. Federal Reserve, regulates the monetary system. The Bahamian government purposefully ties the Bahamian dollar to the U.S. dollar in value, so officials are constantly working to maintain parity through stabilizing credit controls and other economic techniques.

Should I Buy or Rent a Home in the Bahamas?

The Bahamas is a hot market for real estate and new developments are taking shape all over the islands. Both rentals and permanent homes are available, but purchasing a home may be the best option for your Bahamian retirement. Foreign investment in the commonwealth is encouraged, and residency permits are usually expedited for people who invest more than $500,000 in the country.
One of the major benefits of retiring in the Bahamas is that many homes, either rented or bought, come furnished, so you won’t have to worry about importing your furniture.