The cost of living in the Bahamas is very expensive, with a Cost of Living Index of 98.3 (NYC = 100). Groceries (index: 100.6) and restaurant prices (index: 114.0) are notably higher than the NYC baseline.

The housing market is considered affordable, with a Property Price to Income Ratio of 7.6 years. The Rent Index is 46.8, indicating relatively affordable rental costs compared to NYC.

A Purchasing Power Index of 66.9 suggests below-average buying power compared to NYC. While there is no personal income tax, the high cost of living impacts real purchasing power.

The Bahamas has no personal income, capital gains, inheritance, or wealth taxes. Revenue is primarily generated through a 10% VAT (5% for unprepared food and some medical supplies), customs duties, and real property taxes. Owner-occupied properties have the first $300,000 tax-exempt. Social security contributions are 4.65% for employees and 6.65% for employers up to an insurable ceiling of $810 BSD. Most businesses pay 0% corporate tax, except for large multinational enterprises subject to a 15% Domestic Minimum Top-up Tax.

The Bahamas was ranked 119th in the World Bank's 2019 Ease of Doing Business report. While there is generally no corporate income tax, a 15% Domestic Minimum Top-up Tax applies to large multinational enterprises from January 2024. The government is implementing reforms to enhance transparency and efficiency, including new corporate transparency laws enacted in June 2025 and efforts to ensure economic substance. The financial services sector is a key economic pillar.

The National Insurance Board (NIB) provides a comprehensive social security program covering sickness, maternity, funeral, retirement, invalidity, survivorship, unemployment, injury, disablement, and death benefits. The National Health Insurance (NHI) Bahamas offers free primary healthcare to all legal residents. However, NHI does not cover emergency care, specialist treatments, or in-patient hospital stays, making private health insurance highly recommended for comprehensive coverage.

Deposits in Bahamian dollar accounts are protected up to B$50,000 (approx. USD 50,000) per depositor by the Deposit Insurance Corporation (DIC). The banking sector is stable and highly liquid, with strong regulatory oversight from the Central Bank of The Bahamas, which is also integrating international payment standards. Foreign currency deposits are not covered by the DIC.