By NEIL HARTNELL
Tribune Business Editor
A top realtor yesterday said the permanent residency investment threshold should be increased to $750,000 “for sure”, while calling on the Government to spark land development through incentives, not penalties.
Mario Carey, head of Mario Carey Realty, told Tribune Business that raising the minimum permanent economic residency threshold from the current $500,000 to $750,000 would “correlate” well with current real estate market conditions.
He added, though, that an increase in this threshold had to be accompanied by improvements in the process, and time taken, at the Investments Board (Cabinet) level to approve foreign real estate purchases.
“I think the threshold should be increased for sure,” Mr. Carey told Tribune Business. “There’s been talk about it before, but with that said, the process of approval needs to be improved.”
He suggested “why not” increase this to $750,000, as this would “correlate with a lot of different things – the cost of land, the cost of property, and the product within that price point range”.
The Government is currently reviewing its real estate policies, seemingly with the objective of ensuring Bahamians continue to have access to ‘affordable land’ without disrupting foreign investment and the international second home market.
A questionnaire sent out by the Bahamas Real Estate Association (BREA) to its members indicates the Government is also reviewing the minimum $500,000 investment threshold that a foreign real estate buyer must hit to obtain permanent residency.
Asking how much foreign buyers should be required to invest to obtain this status, the questionnaire also suggests the Government is assessing whether to impose strict time limits for foreign buyers to develop undeveloped land purchases.
BREA members are asked policy the Government should adopt on non-Bahamian land purchases “without any conditions for construction”.
In response, Mr. Carey said the Government should seek to incentives property owners to develop vacant land, rather than penalize them for not doing so.
Suggesting that the latter approach would depress real estate market activity, and reduce sales, Mr. Carey said: “The whole thing about foreign investors buying real estate and any level of speculations needs to be given some realistic thought on motivation to do things differently.
“If someone buys a property, develops it and make some money and profits, but doesn’t repatriate it and invests it further here, they should get a credit for doing that. That’s incentive based.”
Mr. Carey said penalties should only be applied if foreign investors sought to repatriate their real estate development properties out of the Bahamas, rather than invest it in further projects here.
The well-known realtor also suggested that major foreign developers entering the Bahamas should be “obligated”, as in the US, to contribute to social development in their host and neighboring communities by creating the likes of schools and parks.
“We don’t get any of that here; there’s no demand for it,” he added.
Mr. Carey called for the Government to adopt a multifaceted approach to Bahamian real estate industry development, saying this tied into issues such as the ‘brain drain’ of top college students who remained abroad after completing their degrees and never returned home.
“I’ve always said the Government needs to look at, and review, their real estate policy to make short and long-term decisions to stimulate the economy, push the banks to lend money, create mentoring programs for people who borrow money, and reverse the ‘brain drain’,” Mr. Carey told Tribune Business.
Noting that many Bahamian college students were mired in education loan debt, and thus struggled to obtain real estate financing, he added: “How do we get those people to come back.
“All these things in real estate can be good for our economy.”