Technical article
Is a Foreign Pension Taxed in the Bahamas or Bermuda?
The page says dividends above BMD 20,000 a year are taxed as pay.
Picture a couple named Frank and Lena. Both are 64. They live on a pension and some savings, and they have heard that islands with no income tax could stretch their money. Their question is a fair one. If there is no income tax, what is left to pay?
I read the government pages for the Bahamas and for Bermuda. Neither one answers the pension question in so many words. Each does list the taxes that do exist.
The Bahamas
Income. The page I found that says it most clearly is a 2013 International Monetary Fund paper, "Tax Reforms for Increased Buoyancy," which the Bahamas government hosts. It describes the country as having "no personal income tax, no corporate profits tax and a comprehensive consumption-based tax." It is a 2013 document. No current Bahamas government page in the sources says this in the same words.
Spending. The Bahamas Inland Revenue page says "Two rates of VAT are applied which is the standard rate of 10% and a zero rate of 0%." The page has no date. The 2013 IMF paper talks about a proposed 15% rate. That was a proposal at the time, so I do not treat it as a conflict.
Property. The 2013 IMF paper lists real property tax rates after November 2012, in US dollars:
| Property | Rate (as of 2013) |
|---|---|
| Residential under US$250,000 | Exempt |
| Residential US$250,000 to US$500,000 | 0.75% |
| Residential over US$500,000 | 1%, with the tax capped at US$50,000 |
Transfers of real estate pay graduated stamp duty "at rates up to 10 percent." The current Inland Revenue property page I read gave no rates, so I cannot confirm these are still in force.
Residence. The government residency page does not mention retirees. The closest category is for "Financially independent individuals or investors who are legitimate owners of a residence in The Bahamas." It says people "purchasing a residence for BS$1.5 million or more will get speedy consideration." The processing fee is BSD 100. I read the amounts as Bahamian dollars (the page writes "BS$"). The page shows no date.
Bermuda
Income. The Government of Bermuda says: "Individuals in Bermuda don't pay personal income tax." The page was last updated 14 July 2026.
Payroll tax. The same page says payroll tax is "levied on all employers." The Office of the Tax Commissioner page for 1 April 2026 to 31 March 2027 shows the employee share as a graded rate. The page shows only a dollar sign, and I read the amounts as BMD.
| Annual pay (BMD) | Employee rate |
|---|---|
| 0 to 48,000 | 0.25% |
| 48,001 to 96,000 | 7.75% |
| 96,001 to 200,000 | 10.75% |
| 200,001 to 500,000 | 11.50% |
Higher bands run to 12.50% up to BMD 1,000,000, where the tax is capped. The page says dividends above BMD 20,000 a year are taxed as pay. It does not say whether pension income counts as pay, so I cannot confirm that.
Land tax. "All homeowners and long-term tenants are required to pay Land Tax twice yearly," based on a property's annual rental value. For homes, the rate runs from 0.80% on the lowest band to 50.00% on values above BMD 120,000. Some figures on the page refer to 2016 to 2019, so the Tax Commissioner would need to confirm today's table.
What is left open
- Whether either country taxes a pension that comes from abroad. Neither page I read addresses it.
- A current Bahamas page that states the no-income-tax position; the clearest source is from 2013.
- Current Bahamas real property tax rates.
- Bermuda's customs duty, medical costs and car rules, which the original ideas for this piece mentioned. They are left open.
You could…
- Ask each tax office whether a pension from your home country is treated as income, pay, or neither.
- Add up the taxes that remain (VAT or payroll tax, plus property tax) for a home at the price you have in mind.
- Ask an accountant or lawyer who works with Americans abroad whether your home country's rules still apply to you there.
If the island taxes spending and property, what would your monthly spending look like?
Figures are estimates for planning, based on public data. Date read: 10 October 2026.
Sources
- Government of The Bahamas, International Monetary Fund paper "Tax Reforms for Increased Buoyancy" (https://cdn.bahamas.gov.bs/tenant/tenanttgotb/documents/All%20Documents/imftaxreformsforincreaszedbuoyancy-20240123170359.pdf); Bahamas Department of Inland Revenue, "About VAT" (https://inlandrevenue.finance.gov.bs/value-added-tax/about-vat/) and "Real Property Tax" (https://inlandrevenue.finance.gov.bs/real-property-tax/); Government of The Bahamas, "Residency" (https://www.bahamas.gov.bs/residency); Government of Bermuda, "Types of taxes in Bermuda" (https://www.gov.bm/articles/types-taxes-bermuda) and "Calculating Payroll tax for the period April 1, 2026" (https://www.gov.bm/articles/calculating-payroll-tax-2026).
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