Acquisition of Property in Bermuda by Overseas Purchasers
There are strict laws in place by Bermuda Government regarding the purchase of real estate by Non Bermudians to preserve the majority of homes and condominiums for it's Bermuda citizens.
Non Bermudians must acquire a license from the Minister of Labour and Home Affairs in order to purchase real estate in Bermuda. They are required to make an application for the license through a local law firm and are required to provide a banker's reference and two personal references from two individuals whom have know them for over a period of 3 years. The application fee is currently $1,416.00 and is refundable once a license to aquire property is granted.
Policy on Residential Homes
Overseas Purchasers are able to buy single family homes with a ARV (Annual Rental Value) of $126,000 or greater. The ARV is the number used in the calculation of land tax. A Non Bermudian will not be permitted to own more than one residential property at any one time. They will be permitted to purchase a second property under the condition that the first property will be dispose of within a twelve (12) month period. License fee for residential homes effective April 1, 2013 are 8% increasing to 12.5% on March 1, 2019.
Policy on Condominiums
Condominiums available to Overseas Purchasers must be in designated developments with a ARV (Annual Rental Value) of $25,800 or greater. License fee for condominiums effective April 1, 2013 are 6% increasing to 8% on March 1, 2019. All properties within a designated resort development are 6.5%.
Policy on Undeveloped Land
Unqualified Non Bermudians are not allowed to own undeveloped land in Bermuda. Qualified Non Bermudians can acquire land and are defined as Non Bermudian spouses of Bermudians and Non Bermudian children of Bermudians.
Policy on Commercial Property
Non Bermudians are only permitted to own up to 40% of a local company in Bermuda. (known as the 40/60 rule) and hotel properties of more than 50 beds. There is currently no license fee for Commercial Property.
Renting a Property in Bermuda owned by Non Bermudian
Non Bermudians must obtain permission form the Minister of Labour and Home Affairs if they wish to rent their home or condominium. These provisions are given for usually a period of one year, and can be renewed and under the condition that the owner of the property is not in Bermuda during the rental period.
Government has approved Non-Bermudaian purchasing by application in Trust subject to (a) locally licensed Trustee, (b) limited to one generation and (c) after death, the property must be sold within 2 years.
Cost Associated with Property Purchase
In Bermuda, it is usual that the cost of the agreement as well as the preparation of they conveyance and stamp duty to be equally shared between the Vendor and the Purchaser. Stamp Duty is calculated on the purchase price of the property as per the chart below:
STAMP DUTY ON SALE OF A PROPERTY
·First $100,000 is at 2%
·NEXT $400,000 is at 3%
·NEXT $500,000 is at 4%
·NEXT $500,000 is at 6%
·OVER $1.5 Million is at 7%
If you would like to view the full policy on Overseas Purchasers, please click on the link below: