By NATARIO McKENZIE
Tribune Business Reporter
A Cabinet Minister yesterday conceded that the Government had been forced to “reconsider” plans to double the permanent residency investment threshold to $1 million, due to the “considerable pushback” by realtors and developers.
Hope Strachan, minister of financial services and local government, said a final decision on increasing the threshold from the existing $500,000 is expected “within the next several weeks”.
Addressing a Society of Trust and Estate Practitioners (STEP) Bahamas luncheon, she moved to reassure Bahamian realtors and developers that regardless of the Government’s decision, “all efforts” will be made to maintain business currently “on the table”.
This reflects calls for the Government to give a one-year warning of the change, so that all market participants can adjust, and for it to ‘grandfather in’ developments that are already selling to foreigners in the $500,000 to $1 million price bracket.
Some realtors have estimated that increasing the threshold for accelerated permanent residency consideration immediately could undermine up to 60 per cent of active real estate developments.
“Since November of last year we have had considerable push back with respect to the announcement from the real estate community,” Mrs Strachan acknowledged yesterday. “Therefore, it forces us to reconsider it.
“We have to take into account all sectors. We have to look at projects on stream in the Bahamas, expectations that may be in place as a result of those projects, and we have to perhaps take advice as to the advisability of doing it, and to what extent, as well as the timeframe, which is of great importance.”
Mrs Strachan added: “If there is going to be an increase we have to look at whether it’s going to be an increase that comes into effect right away, or whether you give it so many months of lead time before it is implemented; whether you give it a year before it’s implemented.
“It is under consideration, under consultation and under advisement. We will know within the course of the next several weeks what the final decision is going to be.”
Mrs Strachan had announced the investment threshold increase last November at a seminar hosted by the Higgs & Johnson law firm. Speaking on the current $500,000 threshold at that time, she said: “This threshold is no longer achieving the intended objective, which is to attract high net worth individuals to our country and to support the real estate market in a tangible way, while maintaining the integrity and profile of the Bahamas as a premier financial centre.”
The announcement prompted considerable push back from local realtors and developers, with some labelling the move as one which was “unacceptable”, “foolish” and threatened to destabilise the real estate market.
Mrs Strachan said yesterday: “I want to reassure the real estate sector that whatever decision is made, all efforts will be made to ensure that we are able to maintain whatever business is on the table for those realtors who are affected, and all stakeholders that may be affected.
“That may mean looking at a lead time before implementation. As it stands now people should go about their business as per usual.”