Housing and the Economy

Make no mistake, home ownership is extremely important to our people and our economy. This applies to both Bahamian and foreign home ownership.

Some of our Bahamas out islands are buoyed by foreign home owners who contribute enormously to their economies.

So we were pleased to learn that the new Bahamas government will make good on its promise to implement real estate tax breaks.

The government will re-introduce a cap on the maximum level of real property tax and roll back the top stamp tax rate from 12 to 10 per cent.

Home sales don't just benefit professionals. They have a trickledown effect on the broader economy. Hardware stores, painters, plumbers and electricians, to name a few, all benefit.

Housing accounts for 18-23 percent of the U.S. GDP, according to a recent Harvard study. I think the same more or less holds true here.

That's a significant figure. The U.S. National Association of Realtors (NAR) says that a home sale adds $60,000 into the U.S. economy and that a local job is created every time two homes are sold.

I am sure this ratio is higher when the sale involves a foreign homeowner who purchases a vacation home here in the Bahamas.

Historically, housing helps the economy rebound.

I look forward to the real estate tax relief coming on stream when the new budget comes into force July 1.

I hope it will help make home ownership a little easier for Bahamians and will also stimulate the important second home industry.

(Mike Lightbourn is president of Coldwell Banker Lightbourn Realty in the Bahamas).


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