* Urges tax, permanent residency bottleneck end
* Says Americans in 'unheard of' status inquiries
* $50m project 30% sold; targeting April start
By NEIL HARTNELL
Tribune Business Editor
A Bahamian developer poised to break ground on a $50m project yesterday urged the Government to resolve tax and permanent residency bottlenecks for the country to exploit an "American first".
Jason Kinsale, Aristo Development's principal, told Tribune Business The Bahamas needed to complete and launch its tax residency certificate while also reducing the permanent residency approvals time to just one month with American real estate buyers suddenly interested in the latter product given the political unrest back home.
Confirming that he plans to start construction on his latest project, the 11-storey Aqualina development at Cable Beach, by April, Mr Kinsale said he and Aristo Development had received a sudden flurry of residency inquiries from potential US purchasers within just two months.
Disclosing that such requests from Americans had previously been unheard of, he also revealed that 30 percent of Aqualina's 27 units - priced at between $2.6m to just over $9m - have already been pre-sold prior to ground breaking.
Mr Kinsale said himself and other Bahamian developers, together with the wider real estate market, were also benefiting from COVID-19 accelerating the trend towards home working. With high net worth investors and businessmen realising they can work from anywhere that provides the necessary Internet capacity, he added that many were seeking to escape the harsh winter and pandemic restrictions.
Urging the Government to fully promote the Bahamas' extended work/study visa to this market, the Aristo chief said the Airbnb/vacation rental product at his One Cable Beach development was presently enjoying 90 percent occupancies with clients opting for extended stays of one to three months instead of the traditional week-long visits pre-COVID.
"We're just moving forward with Aqualina, and it's our intent to break ground in April," Mr Kinsale said of the planned $50m construction spend. "We're just going through the permitting process now. We're 30 percent sold already. The market dynamics have changed quite a bit.
"We see a tremendous amount of activity in the islands, the private islands, and Exuma and Eleuthera. This is also the first time we've seen Americans looking for residency [in The Bahamas]. They are seeking a second option because of the political unrest in the US."
Asked by Tribune Business how many US residency requests he had received, Mr Kinsale replied: "We've had five to six inquiries for residency in the last two months. It's the first time anybody's heard of Americans looking for residency."
Suggesting that other developers and realtors were seeing similar trends, he said Americans had traditionally been more focused on using The Bahamas for tax-related purposes. The Aristo chief said concerns over US inflation, and a potential dollar depreciation, were also driving Americans to view real estate purchases as a "hedge" against this and a means to put their money to work.
"That's the general sense with other realtors; it's not just us," Mr Kinsale told this newspaper. "The other thing that helped us in The Bahamas is that people realise they can work from anywhere now. Before they always felt they had to go into the office. We have good Internet infrastructure that rivals any city. Why not come here?
"We're seeing a very strong upturn - one or two month rentals - at our Airbnb product. The extended stay market has picked up quite a bit - one, two and three months at a time - whereas before it was always a weekend or a week. We're at 90 percent occupancy with Airbnb at One Cable Beach."
Mr Kinsale said he had also just completed his first long-term rental to a visitor approved for The Bahamas' extended work/study visa, which allows successful applicants to remain in this nation for up to a year, and urged the Government to ensure the product was properly promoted as a means to generate badly-needed foreign exchange earnings and foreign direct investment (FDI).
To maintain this initial momentum, he urged the Government to complete and launch the long-promised tax residency certificate, which will enable expatriate residents to prove to their home country tax authorities they are domiciled here and compliant with all Bahamian and overseas tax laws.
Certificate holders will have an identification number, and must prove that they spend a minimum 90 days in The Bahamas per year. "A number of people want to take advantage of that," Mr Kinsale said. "We need to get that product finalised...
"The wealth managers know how to advise their clients, but they do not know what product is being offered. They're in a state of limbo. You're causing people not to move forward because we don't have that product finalised. Every day that goes by.... they just need to get it done."
Elsworth Johnson, minister of financial services, trade and industry and Immigration, said late last year that the Government was in the final stages of readying the tax residency certificate - which has been talked about for years - for launch.
However, Mr Kinsale argued that this needed to be accomplished in tandem with "expediting" permanent residency applications to drive one of the few FDI sources available to The Bahamas amid the COVID-19 pandemic.
"If someone wants permanent residency then it should take no longer than a month and not need to go to Cabinet," he told Tribune Business. "I know I harp on that all the time, but it's an antiquated process. We should be begging people to come here.
"It's mind blowing. What else are we going to do? Five hundred expatriates, each buying a $1m home, that's $500m. What else are we going to do to generate that amount? I think the reality is that we have to get the country flowing again. We need Immigration, and we need people here. It's not the total solution, but I've seen it work."
Advocating that The Bahamas' COVID-19 health protocols and testing regime are another potential selling point for the country, Mr Kinsale said "you cannot get a COVID test faster anywhere than here", pointing to his experience of obtaining tests in Miami, Toronto and Spain.
Revealing that he is targeting Aqualina's sell-out within 18 months, the Aristo chief added of the decision to restrict the property to 27 units: "One thing I've learned is never to fool myself at the level of absorption in The Bahamas.
"Thirty units is a comfortable number. You get out in a three-year period instead of another project where you are there for years and years and years."