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By Keith Archibald Forbes (see About Us) at e-mail exclusively for Bermuda Online
To refer by email to this webfile, please use "bermuda-online.org/homes" as your Subject
Some lovely Bermuda homes. Bermuda Tourism photo
Buying a single-family home or condominium or fractional unit in Bermuda, with its only 13,000 acres in total and an average of 3,400 people per square mile in the most affluent country in the world, is far more costly for non-Bermudians than buying one in, say, the USA (where, according to the National Association of Realtors, the median price is currently $166,100) or Canada, Spain or the Canary Islands or Italy, France or Greece or anywhere in the Caribbean. Only in Bermuda are there so many restrictions and exclusions. In contrast, in all the other tax havens - such as the Bahamas, Cayman Islands, etc - and international business centers, there are no such restrictions. Also, the cost of living is far higher than in any of these places. Nothing is cheap in Bermuda; not fuel (petrol, gas); not electricity; not automobiles or other transport; not property taxes; not alcohol, not anything. But for those who can afford it, the rewards can be many. Bermuda is in a mid Atlantic setting of green foliage, pink coral beaches and golf courses, less than two hours away by air from North America and seven from Europe.
For all non-Bermudians, also referred to as restricted persons - some Bermuda realtors refer to them as international buyers, a License from the Bermuda Government is required to acquire land in Bermuda unless you are on the Register of Bermudians or are a local company with Government approval to do so. They must first apply to the Minister of Labour, Home Affairs and Public Safety for a "License to Acquire" a property. Note that non-Bermudians are severely limited in what freehold properties - homes with land - in Bermuda they may buy, only the 5% top end of the market. They may select only Bermuda's 200 or so most expensive single family properties - luxury homes with an Annual Rentable Value (ARV, see below) of US$177,000 a year or more - from among the more than 20,000 residences, or from an expensive condominium - with an ARV of US$32,500 or more (Bermuda Immigration and Protection (Designation of Eligible Condominium Units) Regulations 2007). Or, instead of freehold buying a Bermuda property such as a house on land or a condominium, a practical solution for some may be to purchase a fractional unit, of which there is now a wide variety. There is a fee for the first-time sale of such a unit, more than 10 per cent. The fee for sale of a fractional unit is more than 18 per cent on the second disposition of such units. For hotel residences condos or hotel units with individual land valuation assessment numbers if they are placed on the hotel inventory it will cost a minimum of 18 percent, or a minimum of 25 percent if the property is kept for private use.
Land in Bermuda is widely defined to include “land … and any building erected on land and any estate, interest, right or easement in, over or under any land or building”. Such extends to all residential homes and buildings, including condominiums, as well as to commercial buildings and other structures. Typically, licences are granted to an individual, an individual and spouse, or to members of an immediate family. Licences are rarely issued to trusts or to special purpose companies. At current rates (since 2013), the application fee for a Licence is from $1,375 and is refunded if the application is successful. Because it is rare for an attorney-prepared application to be refused, is recommended that non-Bermudians purchase their Bermuda property via a local (Bermudian) attorney If the Licence is granted, the full fee anticipated is 12.5 per cent of market value for a home, or six to 8 per cent for a condo, and must be paid prior to property acquisition. For Permanent Resident Certificate (PRC) holders, the anticipated fee for condos may be less. Further, PRC holders (subject to obtaining a Licence and paying the relevant percentage fee) may purchase a home or condo with a single ARV of more than $63,600. Thus, PRC holders have a wider choice than other non-Bermudians. Overall, unlike non-Bermudians limited to the top 5%, almost a quarter of the market is available to holders of Permanent Resident Certificates. In the non-Bermudian market, houses start at $3,500,000 with condos from $560,000. A selling agent’s particulars should advise if a specific property is available to non-Bermudians. Property ownership does not automatically allow residence in Bermuda, however several options ensure that residence is permitted. PRC holders may reside in their acquired Bermuda home on that basis and no further permits or consents are required. Holders of a work permit may reside in their acquired Bermuda home during the currency of the work permit and no further permits or consents are required. Other purchasers may apply for a multiple re-entry permit (“Permit”), allowing re-entry on a single ticket basis on any number of occasions during its validity and with ability to remain for up to 90 days after arriving (in each case). A Permit is valid for one year. Technically, the Permit is only available after property acquisition is registered at the Office of the Registrar-General. However, the Bermuda Department of Immigration recognizes registration delays and may, at its discretion, grant the Permit on proof of purchase. If Immigration ceases to exercise discretion, a non-Bermudian purchaser may still enter Bermuda under usual tourist or visitor pre-conditions such as return air ticket etc. If a non-Bermudian owner is fully retired from all business interests, does not have more than two dependent children and wishes habitual residence in Bermuda, a residential certificate may be granted. International/non-Bermudian buyers may not buy investment property such as land, commercial real estate or property intended mainly to earn rental income. International/non-Bermudian owners may be granted permission to rent their property by the Immigration Department. Permission rarely extends to periods of more than a year and includes a tax of from 7.25 percent. Non-Bermudians cannot subdivide the property. They cannot purchase property with multiple Annual Rentable Values (ARVs). They cannot rent the property they have acquired without official Bermuda Government Ministerial consent. Non-Bermudians are advised not to seek to evade these laws by "fronting" via local or overseas law firm or attorney or Bermudian living in Bermuda or abroad or any other kind of fronting. If they ignore this advice the property will be forfeited to the Bermuda Government. Plus, there are heavy Bermuda Government stamp duty charged on sale or re-sale of all homes owned by Bermudians and non-Bermudians; legal fees involved; and recurring real estate or property taxes, referred to as Land Taxes. By American and Canadian standards, Land Taxes, paid on homes and condominiums twice a year, are not too onerous for most middle-income Bermudians but for non-Bermudian owners of local properties are extraordinarily high, the highest in the world. For non-Bermudians they cannot be compared to Council Taxes in the UK because the Bermuda annual land taxes are hugely more than any UK council taxes. (For example, in 2014-2015 Westminster, London, $950+million Buckingham Palace and all other London millions-of-pounds properties pay less than £1500 a year in total Council Taxes but in Bermuda a prominent property owned by a non-Bermudian, depending on its ARV, could easily cost the owner more than $85,000 a year in annual Land Tax. Almost uniquely in Bermuda, Land Taxes do not include Water or Waste Water/Sewage. Neither are piped in or out via a central system. Costs of water and disposal of waste water and sewage from cesspits is the separate responsibility of the home or condominium owner or tenant or both.
Because of the complexity and licensing costs of buying a Bermuda home or condominium or fractional unit it can be hugely important to have a knowledgeable local attorney (lawyer) and/or a Bermudian real estate professional help navigate the process. An attorney will generally cost more than US600 an hour, plus very expensive fees for conveyancing compared to the UK, USA, Canada, Europe and elsewhere. Bermuda Real Estate Agents/Realtors can be found in Bermuda Employers. Legal fees generally for buying and/or selling a Bermuda-based property to non-Bermudians (international buyers or sellers) are the highest in the world.
These restrictions can make leasing or renting a property a preferable option for non-Bermudians who wish to live in Bermuda, but by international standards Bermuda single-family homes and/or condominiums are very expensive. There are no regulations limiting non-Bermudians who retire or work here to what type of property they may lease or rent.
Presently, there is no current-year Bermuda Real Estate or in UK parlance real property handbook. The only one available to date is the 2009 Bermuda Chamber of Commerce Real Estate Division Handbook see 2009 Bermuda Real Estate Handbook.pdf.
Only Bermudians (see "Citizenship"), if they can afford it, may own any price and type of property.
Agapanthus for sale for $19.5 million, left, and Chelston for sale for $45 million
2014. April 17. Landlords and other property owners who break the law by failing to regularly clean water tanks are escaping prosecution, despite concerns about the risk to public health posed by Bermuda's rainwater catchments system. Government admitted yesterday that no one has ever been prosecuted for not cleaning a tank under the Public Health (Water Storage) Regulations 1951, even though the law requires tanks to be cleaned every six years and allows for suspected offenders to be taken to court and fined if convicted. Public health officers have the power to order a tank to be cleaned but the Department of Health said when water is tested and found to be unsuitable for drinking, it gives only verbal or written advice to the property owner to clean then chlorinate, if the tank hasn't been cleaned for more than six years or looks dirty. A spokeswoman said: "When cleaning and chlorination is completed, then a sample may be resubmitted for retesting. In the past, we have not had to use a formal notice to achieve this result." Bermuda Environmental and Sustainability Taskforce (BEST) insisted last night that better enforcement of the law was needed if the Island was to continue relying on its traditional roof catchments system for the majority of its freshwater supply. BEST founder Stuart Hayward said: "While the regulations do require that tanks be cleaned and sludge removed at least every six years, the mechanisms for tracking and enforcing the regulations are less than efficient. It is difficult to imagine an efficient bureaucracy that could track and enforce this regulation effectively. The he public needed to understand that excessive sediment and the failure to regularly clean tanks could promote the breeding of unhealthy bacteria and cause an accumulation of contaminants such as metals and petroleum hydrocarbons that can pose health risks. It can cost several hundred dollars to get a medium-sized tank professionally cleaned. We would not be surprised to find that people will be put off cleaning their tank for years or decades because of the cost of the cleaning and replacing the water. The only way to ensure tanks get cleaned, particularly with landlords, is to have greater enforcement of the law. A public education campaign would be useful on the reasons to have tank water tested and to clean tanks, and the best ways to disinfect tanks between cleanings. People need to be mindful of testing their water regularly and using some form of disinfection if there is any indication of unhealthy bacteria. However, they need to know that adding chlorine when there is a lot of accumulated sediment can cause the creation of cancer-causing chemicals. They cannot rely on just disinfecting the tank the sediment needs to be removed regularly as well. The Island's system of collecting and conserving water in individual catchments had several advantages, including that it encouraged people to moderate their water use and lessened the chances of a water-borne infection affecting many due to a piped-in system. But he added that a disadvantage was the exposure of the collective water supply to air-borne pollutants, such as acid rain from a distance, road dirt, vehicle exhausts and emissions from plants like Belco and the Tynes Bay Incinerator. It wouldn't hurt for the Government to perform a water supply audit to examine our current system and look at alternatives." The issue of tank water safety hit the headlines this week after the parents of a baby girl who doctors believe was made sick due to contaminated water urged Government to rigorously enforce the six-year rule so other families don't suffer. Asked if anyone had ever been prosecuted under the regulations, a Department of Health spokeswoman told The Royal Gazette yesterday: " No. But compliance activities, advice and education are applied with stakeholders daily to collaboratively achieve improvements. Members of the public could get their water tested by Environmental Health for all of the standard bacterial indicators coliforms, faecal coliforms and E. coli, which are proxy indicators for the risk of pathogenic [disease-causing] organisms. When water was found to be unsuitable for drinking at a property, follow-up samples were taken after advice was given to the occupants about water safety. But there has been at least once instance last year when an unacceptable result did not result in any request for follow-up samples. One of the first questions asked when poor results are received would be whether the tank has been cleaned within the past six years. Dependent on where the property in question is located, more frequent tank cleaning may be required. It is important to remember that water test results indicate the water quality for a particular sample, taken on a particular day, and that microbiological flora can fluctuate with every rainfall. " A study of 140 household tanks was conducted last year by government and overseas scientists, the results of which are expected to be published later this year. A similar study done ten years ago by the same team found that while rainwater collection from rooftops is a simple, efficient and cost effective procedure for the provision of freshwater supplies to individual households, it may represent a risk to human health if used for drinking.
2014. April 15. The parents of a baby girl who doctors believe was made seriously ill by contaminated water are urging Government to rigorously enforce regulations that require all household tanks to be cleaned every six years. The American couple, whose two-year-old daughter is still recovering after contracting a rare lymph node infection in 2012, claim the Public Health (Water Storage) Regulations 1951 are not enforced in any way by the Department of Health, despite the risk to human health from dirty tank water. They told The Royal Gazette they fear most landlords are not t aware of the legal requirement to regularly clean tanks and that unsuspecting tenants could be exposing themselves, their children and their pets to dangerous drinking and bathing water. The couple's daughter had to have an MRI scan and a three-hour operation under general anesthetic to have an infected lymph node the size of a golf ball removed from her neck a month before her first birthday. The infant also had to take medication which could damage her eyesight in the long-term. The couple, who asked not to be named, say their child never drank tap water at the three-bed roomed property they rented for $4,400 a month in Smith's, but they believe she was exposed to the disease-causing bacterium kansasii in her bath water and from having her teeth brushed. "We had pure water delivered [for drinking]" said the father. But the doctors determined that it could have been just that little bit of an amount, just from bath water and brushing teeth." Pediatrician Douglas Savino, from New York State, initially diagnosed the child with atypical mycobacterial cervical lymphadenitis and said in a statement shared with this newspaper that contaminated tank water "was the probable and likely cause." Another doctor, infectious diseases specialist Patricia DeLaMora, from the Weill Cornell Medical Center in New York, confirmed that diagnosis and said in a statement that it was proven when "cultures of the affected node taken during an open operative procedure grew mycobacterium kansasii. Contaminated drinking water is considered to be the main vector for transmission of this organism to humans." In a second statement, Dr DeLaMora wrote that the girl's infection was "typically associated with ingestion and/or exposure to contaminated water. The water tank located in the [family's Bermuda-rented] home did not meet hygiene standards, making it the logical source of [the child's] infection." The couple say a third doctor, Jay Dolitzky, from ENT & Allergy Associates in Manhattan, told them that the likely cause of their daughter's infection was contaminated water or milk. The child drank only formula milk at the time and it was never made with tap water. According to the couple, their Bermudian landlady admitted to them after their daughter's diagnosis that she could not remember having the tank cleaned at the house and that it could have been 30 years since it was done. A Department of Health report shows that an analysis of the tap water at the house conducted by the Central Government Laboratory on February 19 last year found it was not fit for drinking and contained 16 different types of bacteria, including e-coli. A local water supply company called in by the couple to clean the tank found a "significant build-up of organic and inorganic sediment." The company boss sent an e-mail describing the clean-up to the child's father, in which he wrote: "Heaviest dosing of chlorine we've ever used ended up spraying a solution on the walls and letting sit a while. While not clean in terms of volume of sediment, this is not uncommon to find in tanks that have not been cleaned in many years, nor the worst we've ever seen. While we have not seen the test results, sounds like the worst bacteriological issue we've seen yet." The couple lived in Bermuda as guest workers from 2009 to 2013 but have since returned to the US. They say the ordeal they have gone through has caused immense emotional distress, as well as loss of income and loss of friends on the Island, who have objected to their criticism of Bermuda's system of collecting rain water for drinking and bathing. The mother said: "We firmly and wholeheartedly believe that [our child] contracted this bacteria from swallowing a small amount of bath water. something that cannot be prevented, as anyone that has children would know. We wrongly assumed this water was safe. She described having to hold her daughter down while she was anaesthetized for the MRI and the surgery, adding: "To say this was traumatic would be a gross understatement." One infected node was successfully removed from the little girl, but other smaller ones were too close to facial nerves and had to remain. The child was immediately put on a daily regimen of four antibiotics, which were not kid-friendly in any way, according to her mother. One medication could damage the infant's eye nerves and she has had to have a series of regular eye tests, which are not available in Bermuda. The woman said: "We really do want to make this public so it doesn't happen to anyone else. [Our daughter] is still seeing the eye doctor to make sure there is no long-term damage to her eyes from the medications. Furthermore, we won't know if any or all of the medication and/or the bacterial contamination will affect [our daughter] in the long run. We can only pray that it does not." The father said: "The day we found out it was the water, my wife was hysterically crying. She ended up having to quit her job to move home [to the US] to take care of our daughter. My wife ended up moving back [to the US] because the medication our daughter needed wasn't available in the right potency in Bermuda." He said he eventually had to quit his job here to be with his family and that the stress of his daughter's illness put an enormous strain on his marriage. We don't have anything against Bermuda but it was about our daughter. We don't want anyone else to suffer like we have." Through their lawyer here, the couple have asked their former landlady to pay them $35,000 in damages or face legal action but she has denied any liability and her lawyer has said she will vigorously defend any lawsuit. The landlady's property insurers, BF&M, have also rejected the claim that the tank water at the house was responsible for the child's illness. Asked to respond to the allegations made by the couple, the landlady told this newspaper: "At this point, there is no comment. This has been a matter that has been already taken care of with lawyers." The Department of Health did not respond to a request for comment for this story. It recommends that tanks are cleaned every five years while the law requires it to be done every six years and says water should be regularly disinfected to make it safe to drink.
2014. March 18. Businesses owned by non-Bermudians will be able to buy up residential and commercial properties under new Government proposals. But Economic Development Minister Grant Gibbons cautioned that, because land is a scarce commodity, restrictions limiting the capacity of companies to acquire land will be in place. The laws relating to land purchase had become confused and inconsistent in recent years and amendments debated in the House of Assembly will for the first time, provide a clear and transparent written policy on corporate landholding in an otherwise cloudy area of law and practice. The Companies Amendment Act 2014 and new Corporate Landholding Policy policy relate. The holding of land by corporate entities became a restricted business practice under the Companies Act. The Policy is to provide guidance for the Minister in making the decision as to whether to provide consent for a business entity to acquire and/or hold land. The changes will also stimulate turnover in the real estate market and create jobs in the construction sector, and make the Island a more attractive and competitive jurisdiction. Some companies had been unable to sell on their properties because of irregularities with the current laws. The Minister will be able to provide rectification to situations where, if a company can prove that they should have had proper ministerial consent, they will be able to receive it. This consent will then put them in a position to pass on clean title to prospective buyers. The most significant change under the new proposal would allow local and exempt companies to purchase residential property. The residential properties they will be allowed to purchase are very specific and are the properties that are already available to restricted persons. This restricted person category is a designation that the Department of Immigration uses for foreign nationals or persons who do not possess Bermudian status. Residential properties with an Annual Rental Value of $177,000 and above are the properties available to restricted persons. There are about 250 high end residential properties in this category, as well as a number of condos that are similarly designated. The new law will prevent companies from renting these properties in the market, and the changes will also allow exempt companies to hold commercial property if it is used for the specific purposes of their business. Similar provisions will apply to local businesses. The revisions did not affect the Bermuda Immigration and Protection Act. The decision making of the Minister of Home Affairs with regard to Immigration consent still applies on landholding. Consultation with the Bermuda Bar Association and the Chamber of Commerce on the proposed amendments had taken place over the past year. With passage of this Bill, several properties are currently on the market will be acquired, to produce revenue for the government via stamp duty. And, most importantly, it will produce jobs in the construction sector. Many of the properties, once acquired, will undergo renovation and redevelopment.
2013. December 9. The non-Bermudian house market had five completed freehold contracts so far this year and there are several others at varying stages of contract. Some of these are truly world-class estates. Chelston Estate on Grape Bay Beach in Paget, was listed at US $45 million, is an example. The change in Bermuda Government policy, particularly the lowering of the non-Bermudian licence fee was a motivating factor in several of the 2013 non-Bermudian sales. The first house to break the $1 million dollar ticket price was Atlanta-by-the-Sea in Tuckers Town. That was more than 30 years ago. There was a For Sale sign on the lawn of a $38 million dollar property, one of a small handful of Bermuda properties which have reached stratospheric price levels. It is the Tuckers Town, Idolwood Lagoon Estate, set on 4.27 acres and comprises a beautiful main house of approximately 10,350 square feet. and three separate cottages together offering an additional 4,000 square feet. It was completely rebuilt in 1997 and includes five bedrooms suites, a study with half bathroom, a spacious two-storey entrance hall, grand living room, formal dining room, kitchen, family room and two-storey library. It has four garages, gym, tennis court, an extensive orchard, nature trails with ravines, two docks and moorings. Another is the former US Consuls residence Chelston, in Paget, listed at $45 million. Another, priced at $19.5 million, is a beach front home in Paget, Agapanthus. The main house includes four spacious bedrooms all en suite, a vast formal living room, an informal living room/movie room with wet bar, dining room and library all with fireplaces, an office wing, a conservatory, two wine cellars, elevators and a two bedroom staff apartment. The grounds are beautifully manicured and feature a beach pavilion, two bedroom guest cottage, separate gym, pool, tennis court and putting green. The property also enjoys a manicured trail leading to a secluded, private and peaceful beach.
2013. October 3. HSBC Bermuda offers home buyers a break that will hopefully help boost the local property market. The bank has introduced new five-year fixed-rate mortgages of 6.10%, 6.15% and 6.25%. But the lowest 6.10% rate is for customers who maintain at least $200,000 at HSBC. This limited time offer is ideally suited for any new borrower seeking the stability of a fixed payment amount over the first five years of their mortgage, HSBC said. "First-time home buyers and seasoned real estate investors looking for the security of a monthly mortgage payment in a changing interest rate environment or who are interested in locking into a competitive rate for the next five years are best suited for this option. Those on a budget or a fixed income can also benefit from a fixed-rate mortgage because of its stable nature. Knowing exactly how much is going out of your pay check for your mortgage repayment means you can budget more effectively without having to worry about rising interest rates. This also helps when budgeting and planning around other key financial needs such as saving, investments and insurance. If you have a large mortgage, even a slight rate increase may mean big increases in your monthly mortgage payment. You may be better off with a fixed rate. If you wish to be cautious, then the fixed rate mortgage can be your option. By offering this low rate on a fixed-rate mortgage for a limited time, we are adding another way to home ownership. This offer is an extremely competitive rate at 6.10% for the next five years. The rates from HSBC are: Premier member customers: 6.10%. Advance member customers: 6.15%. Personal banking customers: 6.25%. HSBC notes savings could exceed $24,000, based on Premier Rate $1 million mortgage paid over 30 years. To qualify for HSBC Premier in Bermuda, you need to maintain at least $200,000 (or foreign currency equivalent) in personal savings or investments with HSBC Bermuda. To qualify for HSBC Advance you need to maintain at least BM$50,000 or more across all of your joint and sole accounts, deposits and investments. By comparison Butterfield's Bank variable 30-year mortgage rate is 6.75 percent.
2013. October 3. "Desperately seeking a $20,000 a month rental home!" Joy Lusher Real Estate has placed advertisements appealing for modern executive family homes with apartment and preferably water views/access/pool. "Do you have a newly built or renovated home?", says the ad. "We have clients seeking an unfurnished home with 4 Bedrooms, 4 baths, a great kitchen and separate apartment. Water views, a dock and mooring would be an added bonus! Willing to pay up to $20,000/month." If you have a home that fits this description, call Donna Bennett at Joy Lusher at 535-9909. Ms Bennett said while there is not a big surge in demand for executive rentals, the market is definitely picking up and she is doing more property tours with people wanting to move to Bermuda for business. She said there are currently several top executives moving to Bermuda who are looking for high-end executive rentals. the kinds of luxury homes these executives are looking for are either rented well, long-term already or owner occupied. "Maybe we can peak the interest of owners who may want to rent out their homes (at these prices). We don't know how long this demand will last. I want to try to make people coming to the Island feel as welcome as possible and find them whatever they want. The type of clients looking in this price range want a specific property; It must be large, modern and upgraded throughout with a fabulous kitchen, and of course, stand-alone. Swimming pool, water views and water access are all preferable." (Note, the highest market rent ever achieved on the Island to date was $35,000 a month, or $420,000 a year).
2013 July 27. Lawmakers yesterday removed a licensing requirement for mixed-status couples who purchase land. Government described the Bermuda Immigration and Protection Amendment Act 2013 as “housekeeping” measures. But the Opposition Progressive Labour Party — which had imposed the restrictions when in Government — opposed the move, citing the need to preserve property rights for Bermudians, lambasting Government for not providing relevant data to the House of Assembly and questioning what measures will be in place to prevent the practice of fronting. Introduced by Public Safety Minister Michael Dunkley on behalf of Home Affairs Minister Senator Fahy, the changes repealed controversial provisions forcing married couples in which one person is a non-Bermudian to get a licence before purchasing land. “In practice, married couples, where one spouse is a Bermudian, will simply be allowed to acquire property in accordance with the rules and regulations that pertain to a Bermudian with no added regulatory requirements,” said Mr Dunkley. Much of the debate centered around the rationale and history of the licensing requirement. Opposition MPs led by Shadow Home Affairs Minister Walter Roban explained that the PLP had first introduced land licensing requirements for mixed-status couples in 2007 to combat the practice of “fronting” — where a Bermudian would stand in as the owner of a property for a non-Bermudian — and because it was unclear how much land was in the hands of non-Bermudians. The 2007 law proved controversial and sparked intense lobbying with opponents claiming it discriminated against Bermudians simply because of the status of their spouse. In 2012, the measure was amended to exempt a couple’s first land purchase from the licence requirement. But Mr Dunkley told the House that the law simply deterred property purchases and created an administrative burden." With the elimination of the requirement to acquire a license for a first property the opportunity to monitor land held by restricted persons using the licensing regime is greatly diminished. The estimated number of licenses ever issued for the purchase of a second or third property under the regime is in the region of three.” He added that in the event of death or divorce of the Bermudian spouse the law already provides for the non-Bermudian to obtain a licence to hold land. “Protecting the rights of Bermudians are paramount when it comes to land,” Mr Roban. He added: “ Any Bermuda Government has a duty to protect the property rights of Bermudians now and Bermudians yet to be born.” And he said that non Bermudian spouses can apply for status after ten years of marriage in any case — a period in which they are unlikely to have paid for their first property. He said the law limits non Bermudian held land to 400 acres per parish and that it was important to know how much land is currently in non Bermudians hands. Public Works Minister Trevor Moniz said the practice of fronting had been rampant before the 2007 legislation and that some companies continued the practice today. But he warned against an “us and them” paradigm and defended the new legislation as part of an effort to boost confidence in the community. “We’re trying to do a number of things to stimulate this economy to stimulate the confidence of Bermudians and non-Bermudians. We’re trying to stimulate inward capital investment and the investment of people in this community who have money. We’re trying to open up the economy and we don’t want people to be frightened by that.” Deputy Opposition Leader Derrick Burgess reminded the House that in 2007, 37 percent of land was owned by non-Bermudians. “We should have had the figures presented to this House today on what percentage of residential property is owned by non-Bermudians, how many non-Bermudians are married to Bermudians at this point, how many non-Bermudians own property,” said Mr Burgess. “These figures would have been most helpful to us.” He warned against “opening the floodgates” without having the data and called on the Government to rise and report progress. Shadow Education Minister Walton Brown rejected the measures saying it was “aided and abetted by the real estate community” and not sensitive to the needs of the vulnerable. “This particular piece of legislation will further marginalize those who are more financially challenged. Those who have will get more. Those who find challenges in this current marketplace will continue to see those challenges in place.” And he noted that the bill could be “effectively illegal” given that the data on non-Bermudian held land was not clear. “We cannot make effective policy in the absence of good data. How do you make policy without knowing what the facts are. Simply being lobbied by the real estate community is not sufficient justification for passing this bill.” Mr Brown rejected what he said were calls by the real estate community to bring prices back to the “unsustainable” levels of 2007. “Who loses in that, Mr Speaker? The average working Bermudian. I go back to my parents. In 1972, a bartender and a waitress were able to buy a home in this country. What bartender and what waitress today can afford to buy a home in this country? If all you’re going to do is bring forward legislation to benefit the rich, to benefit those who are your strangest lobbyist, then you’ve shirked the responsibility that was given to you on December 17.”
2013. July 24. Bermuda’s inventory of properties for sale is shrinking not expanding. This from Coldwell Banker Bermuda Realty in its July sales market update. There are currently about 236 properties for sale on the market in Bermuda, compared to some 360 last year, the realtor’s manager Susan Thompson said. That approximate number includes the listings of all local realtors. “The area that we have seen the largest decrease in listings is in the condo market; condo inventory has fallen from 60 percent of the total number of properties for sale, down to 40 percent,” she noted. So does that mean condos are selling or just removed from the market? “Our records indicate that 18 percent of the total sales in 2012 were condos,” she said, and: “Last year there were approximately 200 transactions!” Ms Thompson pointed out, though, that the number of real estate transactions in Bermuda has fallen drastically in the last couple of years. “In fact, in recent history the highest recorded number of transactions Island-wide (excluding fractional sales) was as far back as 2001 (650 transactions),” she said. Based on Island-wide averages for 2012, condos on average sold for $650,000 which is comparable to 2003-4 prices. Single family homes are still “coveted by Bermudians”, she said, with an average price of approximately $1,400,000 which is comparable to 2005 averages. And land prices averaged around $500,000 which is close to 2004 averages. Ms Thompson added: “Another key component affecting real estate decisions is access to accurate data regarding the market through an experienced real estate agent. Without accurate data, it is nearly impossible to analyse/comprehend the market in Bermuda. Gone are the days when an agent can effectively practice in all market segments. Coldwell Banker Bermuda Realty maintains teams who focus on individual market segments so that they can provide expert knowledge based on real time market intelligence. What the average layman may believe about the market and what the statistics support are often at opposite ends of the spectrum. In today’s market some purchasers seem to think they can make ridiculously low offers and the vendors are so desperate for a sale they will take anything … that is not the case. In fact, at Coldwell Banker Bermuda Realty our average list to sale price ratio is 92%. That means that we typically price property very close to the actual final selling price, which is good for sellers who want to know that they received the best price for their home in today’s market. Finally, once you have made the decision to buy or sell you need to find out what is happening in the market right now? While we can not speak for the entire industry it is exciting to say that activity has increased at Coldwell Banker Bermuda Realty with more viewings … offers and sales! There is a buzz in the office that has been missing for quite a while. And yes, multiple offers (some over the asking price) on correctly priced properties are occurring from properties as low at $90,000 to those as high as $2,400,000 and everything in between."
2013. July 16. Government’s reduction in property licence fees for international buyers and Permanent Resident Certificate holders is stimulating the Bermuda real estate market. But realtors say the Island is not out of the woods yet, as they wait and see if the increased interest will translate into more sales. Coldwell Banker Bermuda Realty said they had seen a jump in inquiries from PRCs and international buyers. However they cautioned they could not say at this point whether the pick up in interest would result in increased sales through 2013. “We are pleased to announce that we have received significant interest in one of our waterfront Tucker’s Town homes from both PRCs and Bermudians and successfully negotiated sales and purchase agreements on two condominiums with prices in excess of $2,500,000,” Coldwell Banker Bermuda Realty said in its July luxury market update. The realtor said that luxury homes and condominiums which are located in sought-after areas, in excellent condition and priced for the current market are benefiting from the recent increase in market interest from qualified luxury home buyers and “this bodes well for 2013. Recent policy changes relating specifically to PRCs and overseas buyers announced in early 2013 were most certainly welcomed by the industry. The Government’s stated objective was to stimulate the market and ultimately, our economy by incentivising overseas buyers and PRCs to participate and engage in our community through the acquisition of real estate. During Q2 of 2013, our agents have noted an overall increase in enquiries from PRCs and luxury home buyers however, it’s difficult to state unequivocally at this juncture, whether this increased activity will result in notable and sustainable increases in transactional activity in this market segment through 2013. ” Penny Pascual MacIntyre, executive vice president of Rego Sotheby's International Realty said the realtor had seen interest and activity from PRCs “awaken” since the land policy change. "As with any sector, the properties which are well-maintained, properly priced to market and in need of minimal repairs and/or upgrades are of most interest. Last year operated at a whisper for internationally available properties. This year we feel a pulse as we are experiencing more inquiries and conducting viewings with more international buyers. However the Bermuda real estate market is nowhere out of the woods with more than half the year gone and only two internationally available properties under contract." The PRC property license fee was reduced to four percent for 18 months and international buyers licence fees have been reduced from 25 percent to eight percent for a stand-alone home (rising to 12.5 percent after 18 months) and from 18 percent to six percent for a condominium (increasing to eight percent after 18 months).
2013. July 3. Former Premier Dame Pamela Gordon Banks and her husband have criticized the Land Valuation Department for waging a costly four-and-a-half year legal battle against them, instigated by a senior civil servant who overvalued their Gate Wood, Inglewood Lane, Paget, house. The Court of Appeal has ruled in favour of the couple, agreeing with an earlier tribunal that Chris Farrow, the Director of Land Valuation, proposed an “incorrect and unfair” annual rental value for their luxury home in Paget. The civil matter is likely to cost taxpayers hundreds of thousands of dollars in legal costs, since Government brought in a QC and junior barrister from London to argue its case, against the wishes of the Bermuda Bar Council. Dame Pamela told The Royal Gazette she and husband Andrew Banks were willing to fight the case as the outcome impacted hundreds of Bermudian homeowners. “We will never shy away from looking for justice and a just outcome,” she said, adding that they would “take it to the nth degree” to ensure justice was done. Businessman Mr Banks said the couple endured the “four-and-a-half year legal gauntlet” to “right the wrong that was inflicted upon us” and ensure it didn’t happen to others. He alleged that Mr Farrow used “bully tactics” with them and said he’d heard similar complaints about inaccurate valuations from “many, many, many people” who didn’t have the means to appeal such decisions. He also shared documents with this newspaper showing how the Director did not pass important paperwork about their property to the Tax Commissioner’s office for a year, resulting in the couple receiving an inaccurate land tax bill for almost $215,000. The bill included $151,000 in arrears and interest, although it was the first demand they’d received. “When we heard from scores and scores of people who had [also] been mistreated we just felt like ‘we can’t let this go’,” said Mr Banks. “People continue to tell us how they were treated unfairly. We were appalled.” The couple’s argument with the Land Valuation Department began in December 2008 when Mr Farrow proposed that their newly built property should be deemed for land tax purposes as a single unit with an annual rental value of $852,000. The highest ARV given to a property in Bermuda is thought to be $1,182,000 for Golden Eye in Tucker’s Town. GateWood comprises a main three-bedroom house, a two-bedroom staff apartment and a two-bedroom guest cottage, but Mr Farrow proposed giving it just one assessment number, instead of the three it had, increasing the amount of land tax payable. The Bankses objected to the proposal and to a proposal a year later giving the property an ARV of $768,000. Two tribunals heard their objections, with the first upholding their appeal and concluding that GateWood should have three assessment numbers. The second tribunal confirmed the same and decreed that the total ARV for the three units should be $360,000. It heard evidence from a realtor that the highest market rent ever achieved on the Island was $35,000 a month, or $420,000 a year. Mr Farrow had 21 days to appeal the decisions but he took almost 14 months to challenge the first one, with the AG’s Chambers bringing in Jonathan Small QC and barrister Nathaniel Duckworth from London to make an “out of time” application. Bermuda Bar Council objected to the expensive silk and his junior coming here for the Supreme Court hearing in March last year, as its policy is that foreign counsel shouldn’t be used for “interlocutory” proceedings and foreign junior counsel shouldn’t be used at all. Bar Association president Justin Williams said the result was that at a hearing in then Chief Justice Richard Ground’s chambers, counsel for the Attorney General’s Chambers appeared with work permits for Mr Small and Mr Duckworth. “The Attorney General’s Chambers obtained the work permits directly from the Department of Immigration,” he said. “Bar Council had put in place the procedure to protect the rights and engagement of Bermudian attorneys.” Mr Farrow’s “out of time” application failed and his timely appeal of the second tribunal decision was also dismissed by Chief Justice Ian Kawaley. The judge agreed to look at the “wider public interest” issue of how residential properties are evaluated for tax purposes, with Mr Farrow giving evidence in an affidavit that there were 758 properties classified as single valuation units, despite having a main house and at least one guest house or pool house. The judge found there was no “coherent legal basis” for reclassifying high-end properties like GateWood as single units when there were “too many examples” on the Department’s valuation list of “more humble” houses with apartments and cottages being treated as separate units. The Director appealed the Chief Justice’s ruling in the Court of Appeal, where he lost again earlier this month, meaning all costs must be met by Government. Meanwhile, the appeal panel found no “pressing reason” to consider and rule on the issue of how the number of assessment units should be evaluated. Mr Justice Kawaley’s judgment could open the door for the 758 homeowners whose properties are currently classed as single units to challenge that when the Department’s next valuation list is compiled in 2014 — and be granted multiple assessment numbers. Dame Pamela, the Island’s first female premier and a former Environment Minister, said the issue was an important one as many Bermudians relied on rental incomes to pay their mortgages. The Land Valuation Department and the AG’s Chambers have failed to respond to numerous requests for comment from this newspaper since June 18 and have not shared any information on how much the case will cost taxpayers.
March 15, 2013. Land tax will be increased for the Island’s most expensive homes, according to legislation approved in the House of Assembly. The Land Tax Amendment Act increases taxes for properties with an annual rental value of between $90,001 and $110,000 from 9.6 percent to 19.2 percent. Taxes on properties with an ARV of more than $120,001 will rise from 19.2 percent to 23 percent. Land taxes on all other properties will remain unchanged. The increase comes into effect on July 1. Finance Minister Bob Richards said the legislation would only affect a small percentage of homeowners and raise millions in revenue for the Government. “This is fair,” Mr Richards said. “Those who live in the most expensive homes should pay more land tax than others.” Shadow Finance Minister David Burt said he was pleasantly surprised, saying there were “a few more places” to look in order to find similarly progressive revenue sources. Mr Richards responded: “Hope springs eternal.”
February 23, 2013. The real estate sector yesterday applauded a reduction in the licence fees for non-Bermudians to buy property. Finance Minister Bob Richards had earlier said the changes amounted to “a jobs programme, pure and simple. This tax incentive will in no way increase the number of properties in Bermuda available for sale to non-Bermudians. With these two tax initiatives Government has found a way to stimulate the economy and create jobs without resorting to major tax cuts which would jeopardize the solvency of the Government. The cut in licence fees for non-Bermudians purchasing property is also a sensible change that will give a much-needed boost to the property sector. It also sends the message that Bermuda is open for business. " Chamber of Commerce board member, realtor Buddy Rego stated: “We are delighted that the Government has listened to the industry and has seen the natural correlation between reducing the cost of purchasing property and the positive impact it will have in the construction and other related industries. When housing starts to move again we can only expect construction to rally, and the economy to strengthen as new homeowners purchase furnishings, fittings and other home improvement supplies. Government will also enjoy a significant increase in revenues through additional stamp duty fees.” Realtor Albert Moura described the cut as “long overdue. As Bob Richards has stated, not only will it result in more Government revenue from licence fees and stamp duty but increased property sales will create employment opportunities for those industries involved in the home improvement industry from masons, painters, plumbers, landscapers and electricians. Additionally, retailers that supply home improvement and building products will benefit as well.” Coldwell Banker general manager Kendra Mello said: “We are grateful that the policy amendments outlined in today’s budget create opportunity in the real estate market and are hopeful that these and other initiatives will stimulate growth in Bermuda’s economy.”
The changes essentially include:
- Reduced licence fees for non-Bermudians who purchase houses. Once 25 percent of the value of the property, fees will be reduced to eight percent for 18 months and thereafter 12.5 percent. Applies to houses with single ARVs over $177,000.
- Condominiums not in hotel residential developments will see fees for non-Bermudians reduced from 18 percent of purchase price to six percent for 18 months. The fees will then rise to eight percent. Non-Bermudians can purchase condos with a minimum ARV of $32,400 in designated developments.
- Reduced licence fees for Permanent Residency Certificate holders. Where such persons once paid 18 percent for condos and 25 percent for houses, it is proposed to reduce the fees to four percent for 18 months and six percent thereafter. PRCs are able to purchase houses with single ARVs over $63,000 and condos not sponsored by Government.
“The lowering of licence fees as outlined will stimulate much needed inward direct investment into Bermuda,” Mr Richards said. “The purchase of a new house, particularly those at the highest echelons as represented here, is frequently accompanied by renovations or customization of some description. Local construction companies will be required to carry out such modifications, thereby increasing the demand for labour in that depressed sector.”
February 9, 2013. Bermudians married to non-Bermudians will no longer have to buy a licence in order to own a second home on the Island, Government announced yesterday. Other methods will be implemented to preserve land for purchase by Bermudians, said Governor George Fergusson as he read the Throne Speech. “The land licence requirement for the purchase of additional dwellings for married couples that include a Bermudian and a non-Bermudian spouse will be set aside. In removing the licensing requirement, the Government will put in place measures to prevent any potential loss of land that would otherwise be eligible for Bermudian purchase. ”The Bermuda Immigration and Protection Amendment Act demanded that mixed-status couples buy a land licence to purchase a home in an effort to reduce fronting. Amendments were passed last year that allowed such persons to purchase their first home without a licence. Yesterday’s move opens the door for ownership of further properties. Chamber of Commerce president Ronnie Viera campaigned against the land licensing requirement when it was law. Government also take a look at legislation surrounding Permanent Residents’ Certificate holders ability to buy. Some relaxation of the PRC rules are what the Real Estate Division of the Chamber of Commerce has been asking for. Government also promised to amend the Bermuda Immigration and Protection Appeals Rules 2013. “The Government is keen to deal with long-standing appeals that have been submitted to the Immigration Appeals Tribunal for consideration,” it was stated in the Throne Speech. “Therefore, the Bermuda Immigration and Protection Appeals Rules 2013 will be amended to ensure that individuals are not penalised by decisions affecting their rights or legitimate expectations unless they have been given prior notice of the case and fair opportunity to answer and present their own case.” The Appeals Tribunal was established in July of 2011, replacing a Cabinet committee that heard appeals of Ministerial decisions. More than a year later, the Tribunal had yet to deal with a single appellant after discovering that there were no rules in place
January 29, 2013. Compared to 2011, in 2012 Bermuda’s overseas luxury real estate market was hugely disappointing — virtually drying up in the second half of the year. Bermuda's overseas luxury market (homes available to overseas purchasers) has not rebounded like comparative jurisdictions. In fact, all the sales of property involved global purchasers occurred in the first two quarters of 2012 with practically no transactional activity for the remainder of the year. There has been a significant decline in property sales volume overall, including in the luxury market. Conversely, Bermuda’s high-end competition, including exclusive North American coastal communities — particularly in Boston and New York — have cited significant increases in sales of luxury property, the report states. Both locations are where many of Bermuda’s overseas buyers hail from. In order compete globally, the Island “must critically assess whether or not we compete favourably from a global perspective.” Bermuda's new government - from December 17, 2012 - has been asked to make the “necessary policy changes” to help stimulate this sector of the economy. Issues relating to the barriers to entry for overseas investors, from the complicated rules and regulations surrounding an overseas purchase to the high cost of a foreign buyer licensing fee, are just some of the issues realtors would like resolved. Currently the licensing fee is 25 percent for houses and 18 percent for condos and 6.5 percent in resort properties. Comparatively, the Turks & Caicos doesn’t have such a fee, a place that has seen home sales vault a reported 70 percent over the past year. While some progress has been made — relaxing some restrictions around homes that non-Bermudians can buy and the laws around non-Bermudian spouses needing a licence to purchase, however, realtors say that is not enough in order to compete with rival jurisdictions.
January 4, 2013. New Minister of Home Affairs Michael Fahy has pledged to undertake “a thorough and measured review” of a law affecting Bermudians married to foreigners. Part of the controversial amendment to the Immigration and Protection Act — which forced mixed status couples to obtain a licence for the purchase of their own homes — was rolled back in the House of Assembly in July 2012. However, such couples will still require approval to buy a second home — something that One Bermuda Alliance MP Shawn Crockwell blasted in July as “fundamentally unfair.” Asked what the OBA plans to do about the policy now it is in power, Sen Fahy issued a statement saying: “We recognize that this is an issue that touches on considerable sensitivities in our community. The public is aware that I have been very vocal about this matter, and I am committed to sitting down and undertaking a thorough and measured review of the current policy.” He went on to say that while there are numerous items on the Government’s agenda which are an immediate priority, the policy will receive early attention and legislative amendments may follow based on the outcome of the review. According to Sen Fahy, “a time line will be determined shortly.”. Campaigner Ronnie Viera, who has pressed for changes to the law, said of the news: “I am pleased to hear that a review will be done and hope that it results in the remaining negative aspects of the Act being changed. While there is a long list of priorities, I hope it will be done sooner rather than later. In addition, I suggest that any such review include the restrictions on Permanent Residency Certificate holders with regard to real estate purchases. Apart from being the fair thing to do, it could also stimulate the current flat market.”
October 10, 2012. Realtors called for review of foreign property ownership requirements for long term owners. The call came in reaction to concerns expressed by Canadian homeowner Larry Marsland who said that a policy change on foreigners owning Bermuda property had reduced his options for the disposal of his property, and made it “more likely” that he will leave the Island taking his economic contribution with him. Mr Marsland, who has owned a Tucker’s Town home since 1974 said that when the revised rules on foreign property ownership became effective in June this year, his house became inaccessible to foreign buyers as its ARV fell just below the threshold. He argued that as a good faith investor, the property should have been grandfathered. Government’s policy review was aimed at having only the top 250 homes in Bermuda available to foreigners, so as to protect Bermuda homeowners and potential owners from undue competition for Island properties. “There is a fine line between protecting properties for Bermudians and encouraging/permitting foreign ownership,” said Dale Young, President of the Chamber of Commerce Real Estate division. “Mr. Marsland is correct that foreigners do add a great deal to the Bermudian economy in the way of jobs and financially supporting charities and organizations on the island. We believe that the policy should be reviewed particular for long standing foreign owners of 20+ years. In most cases, Bermudian are not purchasing properties in the upper ten to 20 percent of the market as it would be assumed that this property would be in that range. Failure to allow foreign owners in this range of the market to sell to another foreigner is a huge disadvantage and will substantially reduce the selling price. The Chamber is always willing to work with government by providing data that could help arrive at a ‘fair’ policy to all.” The United Bermuda Party suggested that the policy could be relaxed on a case-by-case basis.
August 10, 2012. Interest in Bermuda real estate is strong from overseas, say realtors looking for a boost in business from a recent change in property laws that will make more homes available to foreign buyers. Rego Sotheby’s International Realty has noticed thousands of people from North America and Europe browsing over properties featured on its website this year. In June, an amendment to land-holding laws that will enable Bermudians to sell to non-Bermudians, immediately doubled the inventory available to overseas buyers. While the change has yet to see results in terms of sales being closed during what is traditionally a quiet time of year for real estate deals, interest is brewing. This week, Sotheby’s International Realty Affiliates vice-president Peter Turtzo flew in to visit the Rego Sotheby’s office and explained how he saw what was going on in the Bermuda market. “The recent changes have had a very significant positive impact on the real estate business in Bermuda and because of the new opportunities, more people are able to sell or buy at levels they would not have been able to before. Bermuda has been attracting a lot of interest on our website from overseas. The numbers for the first seven months of this year are well into five digits. The main countries of origin are the east coast of US and Canada, the UK and Germany. Technology is changing the way people hunt for homes. Over 90 percent of home buyers begin their search online. Many of them are looking at lifestyle as part of their search, for example boating, or water view. That kind of search was helping to direct house hunters to Bermuda, even those who might have known nothing about the Island. Online translation tools made the real estate market even more accessible to those from overseas. Technology has improved the availability of information too. When the consumer sends an e-mail to a real estate agent, we find they know nearly as much about the market as the agent." Realtors are hoping that the change in the law, which also increases he minimum annual rental value (ARV) of a property that is eligible to be sold to a foreigner from $153,000 to $177,000, will give the market a badly needed shot in the arm. Buddy Rego, president of Rego Sotheby’s International Realty, said the total number of properties sold declined by about 40 percent between 2009 and 2011. However, single detached homes had held their value well around the $1.1 million to $1.2 million level, since the 2008 global financial crisis. “What has changed is the number being sold,” Mr Rego said. “Those that have been sold have done so at the same level for the past four years. It’s the condo sector where we’ve seen the biggest declines. Condominiums sold at an average price of $630,000 in 2008, compared to $480,000 this year, representing a decline of nearly 24 percent. Imminent general election was causing some Bermudians to hold off buying. Job security issues and tighter lending policies by banks were also having a dampening effect on the market. Some buyers were also not committing to deals because they were waiting for prices to fall further. People who are having a problem committing are those who are wrongly, in my opinion, waiting for the bottom of the market. I think we are seeing that the price of Bermuda detached homes is holding very, very firm, while in the condo market, this is a very good time to buy.” Mr Turtzo said Bermuda was an attractive place to live, but foreign buyers would have to weigh up whether the roughly one-third premium they were required to pay would be worth it. Overseas buyers, as well as Permanent Residency Certificate (PRC) holders, have to pay 25 percent of the purchase price for a licence to buy a property (or 18 percent for a condo), plus stamp duty on top of that. Reducing or eliminating the licence fee would significantly stimulate the market, in Mr Rego’s opinion. “There’s a lot of pent-up demand from PRCs,” he said.
July 27, 2012. A law requiring Bermudians married to non-Bermudians to purchase a licence before buying property has been rolled back by Senators. While such couples will not require a licence to purchase their first home, as was necessary under the controversial law, they will still need licenses to purchase additional properties. OBA Senator Michael Fahy said yesterday the amendments were an improvement, but the law remained unfair as it discriminates in a way against Bermudians who fall in love with non-Bermudians. “I still see discrimination against Bermudians,” Sen Fahy said. “I still think we need to go a little bit further. I’m just not sure why there’s this restriction. The mistake continues because if a married couple want to buy a second home, they require a licence based on a code of conduct we haven’t seen.” Passing the legislation in the Senate, Senator Jonathan Smith said that the original law was introduced to combat the issue of fronting, which allowed non-Bermudians to circumvent property regulations. As a result of fronting, land left Bermudian hands and property values rose beyond what many Bermudians could pay. He said the legislation would also increase the limit of local property that can be held by non-Bermudians to 2,500 acres. The limit had been set at 2,000 acres, but in reality 2,344 acres is already owned by non-Bermudians. The new figure, Sen Smith said, would account for that and provide room for new hotel developments such as Park Hyatt and Morgan’s Point. A Code of Practice, intended to guide Ministers on the practical application of the law, will also be created. Independent Senator Joan Dillas-Wright stressed the need to protect Bermudian land for the sake of Bermudians, saying: “Even if people are in a position where they can purchase more than one property, it behoves the government to exercise some control.” Independent Senator James Jardine agreed that it was important to protect land for Bermudians, noting that the amount of open space around the Island had fallen. Government Senator Vince Ingham said that Government was right to tackle the issue of fronting, saying that land is a precious commodity for Bermudians. “It was important to act, and act we did,” Sen Ingham said. “What I like about this amendment is it not only addresses an issue that has been raised, but it also has a forward looking view in the terms of allowing future development.” Senator David Burt agreed, stressing that the original intent of the legislation was to help Bermudians, describing the amendments as a “recalibration”. “At the time the average property value was $1.6 million. This is something that just seems out of reach for most Bermudians. Many young Bermudians have been able to enter the housing market, some on a single income.” OBA Senator Michael Dunkley noted that while Sen Fahy had to purchase a licence to buy a home with his wife, Sen Burt will not have to when he is married next month, joking: “Timing is everything in life.” Sen Dunkley said he supported the amendment, but criticized the time it took the Government to make the move. Sen Dunkley said: “There are people who will be pleased by the policy that’s coming today, but there are others who will say: ‘This didn’t help me in any way.’” Responding to the comments, Sen Smith said the matter is a difficult one to legislate, noting that in the case of a divorce properties could easily slide into foreign hands.
June 23, 2012. The Island’s real estate industry hailed an announcement by Government today that it’s finally made changes to its policies on property purchase by non-Bermudians. A bill tabled in Parliament allows Bermudians to now sell property to Non Bermudians providing their house has an ARV of over $177,000. In addition, special spousal alien licenses (for non-Bermudians) are no longer required for the purchase of a primary residence. The bill changes the ARV on houses for purchase by non-Bermudians from $153,000 to $177,000. It’s not clear yet if or how the land holding policy changes affect the condominium market. Announcing the changes, National Security Minister Wayne Perinchief told the House: “I can confirm to Honourable Members that the provisions of what has become known as ‘the 2007 Act’ have expired such that Bermudians can now sell properties, meeting the requisite criteria to non-Bermudians. As we indicated throughout this process, these provisions were transitional and would eventually expire.” Mr Perinchief continued: “Mr. Speaker, a return to the market conditions which prevailed at the time these provisions were enacted is not in the best interests of property owners or those of our citizens seeking to become homeowners. A real estate market which is overly weighted and is sustained in favour of any one group is not healthy and defeats a primary aim of this Government; to promote conditions for young families to acquire their own homes. Mr. Speaker, as I indicated publicly on previous occasions, the ARV threshold for those properties available for purchase by non-Bermudians must be set at a level that promotes Bermuda as open to high net-worth individuals while preserving a market share for Bermudians that makes home ownership and asset improvement a realistic goal. Mr. Speaker, I will introduce into this Honourable House a set of Regulations that have been gazetted today which set the ARV threshold for those properties available to non-Bermudians at $177,000. Mr. Speaker, as I previously indicated, setting the ARV at this level is consistent with a long-standing policy to provide the top 250 valued properties in Bermuda as available for purchase by non-Bermudians. This figure is not arbitrarily set but is based upon current data supplied by the Land Valuation Department. Mr. Speaker, I am also pleased to be tabling amendments to the Bermuda Immigration and Protection Act to remove the requirement for couples, in which one spouse is a non-Bermudian, to obtain a license on the purchase of their own family home. This change is a responsive one and delivers on a promise this Government made earlier this year. Mr. Speaker, the Bill is forward-looking in its scope and provides the framework that will support the intended development of the tourism products planned for Morgan's Point, Tucker's Point and Park Hyatt.”
February 26, 2012. Stamp duty will no longer be levied when borrowers switch from one mortgage lender to another. The 2012 Budget offers a significant tax break for homeowners who want to refinance their loans to get a better rate. Hoping to promote competition among the banks, Government said it removed the stamp duty rate of 0.1 percent for borrowers switching mortgages from one bank to another institution. HSBC Bermuda and Capital G Bank told The Royal Gazette they supported the change. In announcing it, Premier Paula Cox said: “Assignments or transfers of mortgages are currently charged at a rate of 1/10 percent of the sum secured under ... the Stamp Duties Act 1976. Government proposes to remove this stamp duty charge to encourage mortgage payers to seek the best financing options available to them and to promote competitive lending rates between our local banking institutions. This exemption from the stamp duty charge will reduce the cost to customers when transferring a mortgage from one bank to another.” HSBC Bermuda currently offers a rate of 6.5 percent on 30-year mortgages. According to its website, Butterfield Bank currently offers a rate of 6.75 percent on a 30-year mortgage. Capital G offers a rate of 6.25 percent on 15-year mortgages and 6.5 percent on terms above 15 years. An HSBC spokesperson stated: “The removal of stamp duty, payable on assignments or transfer of mortgages, for borrowers in Bermuda is welcomed. HSBC supports efforts to ensure a prudent yet robust competitive mortgage environment. Stamp duty removal for assignments or transfers of mortgages will assist in this regard.” The spokesperson added: “We would look forward to working with customers who are interested in reviewing their home ownership alternatives using HSBC’s suite of industry leading credit solutions.” Ian Truran, president and CEO of Capital G said: “Capital G supports the decision by the Government of Bermuda as outlined today in the 2012/13 Budget Statement to remove stamp duty charges for the assignment or transfer of mortgages. Capital G has always encouraged healthy competition and supports Government’s concession that will remove costs that previously inhibited a borrower’s ability to obtain the most competitive terms available to them.” Butterfield Bank declined to comment on the change.
February 22, 2012. In 2007, The Royal Gazette daily newspaper of Bermuda warned that the requirement that Bermudians married to non-Bermudians would have to get a licence to own real estate would backfire. An editorial stated that while the goal of preventing “fronting” was justified, the method was wrong and discriminatory, because the dead hand of bureaucracy would lead to long waits for couples to get licenses, which would give the advantage to other buyers. Now National Security Minister Wayne Perinchief has announced that the licenses will no longer be required for first time homeowners, as government tries to reinvigorate the real estate market. Five years has been far too long to wait for this policy, that was clearly flawed from the outset, to be reversed. However, the more discriminatory and blatantly unfair part of the policy, which prevents these same couples from owning a second property, is still in place, and apparently is still under review. While the licence requirement for a first home was cumbersome and discriminatory in practice, at least the possibility existed to own a property. Not so the second part, which was designed to prevent too much Bermuda land falling into foreign hands. In barring Bermudians married to non-Bermudians from owning more than one property, it blatantly discriminated against those Bermudians who happened to fall in love with and marry non-Bermudians. We said then: “That makes no sense, and may well drive Bermudians out of their own country as a result.” To some degree that has happened, exacerbating the ravages of the recession on the real estate market. Also stifling the market, at least at the top end, is the restriction on Bermudians selling property to non-Bermudians. The newspaper disliked the policy from its start in 2005, not out of sympathy for millionaire homeowners, but because it too was the wrong approach to ending the practice of “fronting” in which Bermudians were the titular owners of houses actually owned by non-Bermudians. Instead it had the effect of instantly devaluing properties owned by Bermudians while increasing the value of homes owned by non-Bermudians. The knock-on effect of that has been to subdue the market, restricting the number of properties available. Behind concerns about fronting, the Government wanted to prevent non-Bermudians from owning more than 2,300 acres of land being owned by non-Bermudians. This is now said to be 37 percent of the land available for residential development. There are several concerns with this. One is that no one can really be certain how much land is held by non-Bermudians. In any event, if that is a concern, the answer is to gradually raise the annual rental value limit at which non-Bermudians can buy property. There is an opposite argument which is that more property and rights should be made available to wealthy non-Bermudians, but there is not room here to debate that question. These policies have caused misery for many, and have damaged Bermuda economically. This was obvious from the start and any credit Government gets now for reversing these policies must be tempered by the fact that it has taken far too long to get rid of them. To restore at least some of his Government’s credibility, Mr Perinchief now needs to reverse the policy on second property ownership by Bermudians married to non-Bermudians as quickly as possible.
February 18, 2012. National Security Minister Wayne Perinchief yesterday defended Government’s handling of a controversial land policy in Parliament. Mr Perinchief faced robust questioning from Opposition figures shortly after announcing the key changes. But in a novel twist, a question from his own Cabinet colleague, Deputy Premier Derrick Burgess, forced Mr Perinchief to admit that the amount of land owned by non-Bermudians has already exceeded the statutory limit. And Government came under fire from the One Bermuda Alliance for “doing more to harm the Bermuda economy than any other single entity” through policies like the land licence policy. Mr Perinchief had announced that Government would allow land above a certain annual rental value to be sold to non-Bermudians, reversing the policy which prevented Bermudians from selling to non-Bermudians. He also revealed that Bermudians married to non-Bermudians would no longer be required to obtain a licence to buy land, provided it is for their first home. Mr Perinchief was asked by Kim Swan, who was elected as a United Bermuda Party MP, how much money Government had made from the land licenses since that policy was implemented in 2007. The Minister responded by saying the information was in the Budget book. Mr Swan then asked whether the Minister had concluded that the original policy was “draconian”. “It was brought into place to stop fronting. That has now been stopped. And to preserve land for Bermudians.” Ruling party backbencher Dale Butler then asked: “Can the Minister, Mr Speaker, in light of an alleged leak of his statement indicate if he is going to resign, cross the floor or open an investigation as to how this happened and tell us what will be done to prevent this in the future?” Mr Butler was referring to this newspaper’s story about the Minister’s statement. Mr Perinchief told the House that no leak had occurred but that he had authorized release of a “small, abbreviated teaser to the press”. He said: “There was no expectation of pre-empting the House and if there’s an apology to be given, I now give it.” One Bermuda Alliance Shawn Crockwell put it to the Minister that he had in fact reversed policy because the policy was wrong. “There’s no culpability here. Any prudent Government, using principles of good governance, changes policies according to the financial situation, and that’s what we have done,” the Minister replied. “It’s an adjustment to a policy which became dated and we now find that it had to be amended.” Mr Crockwell then asked whether the Minister agreed that the policy restricting land sales to non-Bermudians by Bermudians, had “suppressed the real estate market and hurt the economy.” Mr Perinchief said the new policy allowed Bermudians to sell to foreigners if their property was in the $177,000 ARV band and that “stimulates the real estate market.” Mr Crockwell asked whether the policy requiring licenses for mixed couples had suppressed the market. The Minister agreed that changing the policy had stimulated the market. “Lenders were confused as to who was allowed to buy property and who was not. And that did cause a problem,“ Minister Perinchief said. “So it has removed the barrier and it has satisfied a need to restimulate the market. So you can interpret that any way you wish.” Pat Gordon-Pamplin of the OBA referring to the Minister’s statement that illegal fronting had been “prevalent” asked the Minister how many prosecutions had been brought against fronting. He said he was not aware of any prosecutions but one property was forfeited to the Government. A question from Deputy Premier Derrick Burgess, revealed that the limit on land holdings to foreigners had already been exceeded. “Minister Perinchief, is it a fact that 37 percent of our 6,000 residential acres are owned by non-Bermudians and the main objective of this Government was to preserve land for Bermudians?” asked Mr Burgess. “That is correct. I believe the figure is 2,300 and some acres,” he said. “We’ve actually exceeded the allocation to be sold to foreigners. We are really moving close to the mark now in even expanding it further but we’re loath to do that.” Shadow Education Minister Grant Gibbons, referred to the Minister’s comment that local lending institutions should reduce down payments, and asked whether the Minister had discussed the matter with the Bermuda Monetary Authority. The Minister said that a discussion had been had with one lending institution which had indicated that 100 percent mortgages had resulted in some mortgages being considered sub-prime. “We have not put any pressure on the lending institutions at all,” he said. Dr Gibbons then suggested that the Minister was not aware that the BMA had tightened up capital requirements and required banks to take a “more conservative lending position.” Mr Perinchief said he was aware of the BMA policy. The OBA later issued a statement which criticized the Government’s handling of land policy. The party said that it welcomed the reversal of policy, but said: “The damage from its flawed policies has caused untold stress on Bermudian families, in the form of lost jobs for thousands, reduced pay cheques and shrinking business earnings. “The Government has been in damage control for most of the past year, scrambling to reverse policies that have not worked. Today’s rollbacks on land policy are the latest step in this process.” The land policy “was bad policy from the start,” according to the OBA statement. “It discriminated against Bermudians who happened to fall in love with and marry non- Bermudians, instantly making them second class citizens in their own country. “It undermined the value of real estate owned by hundreds of families. And it gave international business people one more reason to consider moving their businesses elsewhere. The outflow of international businesses to other jurisdictions cannot be separated from the 2007 legislation, and every Bermudian who saw their rental income go down or disappear since should consider the cause. The Minister, by stating that today’s policy reversal is intended to ‘stimulate’ the economy, is admitting the 2007 policy helped depress it. The Minister, by stating the 2007 policy ‘unduly and adversely’ affected Bermudians married to non-Bermudians, is admitting the discrimination at the heart of the policy. We sympathise with the people who had to pay for a licence during this period. For many, it severely strained family budgets and was fundamentally unfair. Perhaps the Government can address their concerns directly. The reversal of the 2007 land policy a policy that went too far - is welcome.”
February 18, 2012. Bermudian Ronnie Viera says Government’s reversal of the controversial land licenses rule is too late to restore his faith in the way it handles property laws. Mr Viera remains angry that he was told to sell an investment property bought several years ago as a result of the Bermuda Immigration and Protection Amendment Act passed in 2007. And he said many mixed-status couples have suffered stress and legal fees after the law required them to purchase a licence fee in order to buy property. He said he was pleased the amendments are now being reversed, but that Government should not expect any accolades; he noted there will be no refund for those who were made to buy licence fees. As an owner of more than one property before 2007, Mr Viera said he had been adversely affected by the decision to apply the legislation retroactively. “Those couples who owned an investment property, in some cases, were told they had to sell the second property within 12 months,” he told The Royal Gazette. “It was offensive to be told, as a Bermudian, that I had to sell a property purchased several years before the new law was enacted. Furthermore, as a Bermudian, I am not willing to invest any further in the local market as this whole land licence debacle has demonstrated that this and any future Government can simply pass whatever legislation they wish, without consultation, and apply it retroactively as it suits them.” About 100 people joined Mr Viera’s protest group shortly after it emerged Bermudians married to non-Bermudians were forced to buy a $1,375 licence as part of the anti-fronting legislation. At that time, Mr Viera was married to a Canadian, though in recent months she has become a Bermudian. “It’s good to hear that this Minister has listened and has made progress in reversing bad legislation and policy although it has taken nearly five years for this to happen,” he said yesterday. “While I and many others would like a refund of the licence fee and reimbursement of legal fees, it is unlikely to happen. It is pertinent to point out that the stress this policy has placed on those affected over the five-year period has been far more damaging than the financial impact. It is also ridiculous to consider a legitimate marriage as fronting, which has been the case. I’m glad it will now be reversed but saying, ‘We got that one wrong, we’ll change it back’, and then expecting accolades is not acceptable.” Shadow Attorney General Trevor Moniz, a lawyer who frequently criticized the legislation, yesterday said Government had employed a much too forceful tactic to deal with fronting, the practice of non-Bermudians gaining an unlawful interest in land by using a local as a front. “The Minister today is credited with changing that and needs to be commended for taking the bull by the horns, but obviously mixed-status couples still feel hard done by. My sympathy goes to those people,” said Mr Moniz. “People say lawyers made a lot of money out of this. But if it wasn’t for this legislation, there would have been more transactions, so lawyers would have made a lot more money.”
February 7, 2012. A former home of the US Consul General has been put up for sale with a $45 million price tag. The luxurious Chelston, built between 1939 and 1941 for California oil baron Carbon Petroleum Dubbs, was conveyed to the US Government in 1964 and served as the official residence of the US Consul General for more than 30 years. During that time, it housed guests including US President George Bush, Vice President Dan Quayle, Senators John Kerry, Edward Kennedy and Chris Dodd, General Colin Powell, former Secretary of State Henry Kissinger and actress Brooke Shields. It was also known locally for hosting an annual July 4 celebration, which sometimes drew more than 3,000 people to the 14-acre property. However the US sold the property to a US businessman in 1999 for around $15 million. The estate features a 10,000 square foot main house overlooking Grape Bay and boasts 15 bedrooms and 19 baths, including three guest cottages and a staff cottage. It also includes a well-equipped home cinema, a nearly Olympic size swimming pool, a croquet lawn and a wood-burning pizza oven. A section of the official listing for the site reads: “Exemplifying understated elegance and incorporating the best of traditional Bermuda design, the main house, on three levels, is light-filled and spacious. “High ‘Bermuda tray’ ceilings, floor-to-ceiling windows, multiple sets of French doors, generous room proportions and a general consistency of finishes throughout the estate are Chelston’s hallmarks.”
January 12, 2012. Bermuda luxury home and condo sales were so strong in 2011 that there was increased demand from wealthy overseas buyers for multi-million-dollar properties in desirable areas, including Tucker’s Town. Not only did the number of sales of high-end homes rise, but there was also a significant increase in the average selling price of both luxury houses and condos compared to 2010. The 2011 luxury market saw robust activity with an increase in the number of homes sold by 30 percent over 2010 for homes with an ARV of $153,000 and higher. Average sale prices in the luxury residential market also increased by 15 percent over last year, from $6.4 million to $7.5 million. Sales to international buyers increased by 40 percent from the previous year representing 56 percent of the total luxury home buyers this year. The numbers were in contrast to the non-luxury local market, which continued to suffer in 2011 with the two-bed condo market remaining saturated and rents dropping further. It seems this is a sign of confidence in the Bermuda market by international buyers, who are drawn for tax purposes, as well as the Island’s quality of life, sophisticated business community, location and proximity to the US and UK. While the number of luxury properties sold was small - nine houses in 2011 vs seven in 2010 the increase in sales in that market showed a clear, positive trend. There’s demand for homes by international buyers who want to become Bermuda residents as well as base their businesses here. International buyers are looking for homes with at least four to six bedrooms, primarily in Tucker’s Town, followed by Fairylands, Point Shares and Paget. Tucker’s Town particularly appeals to international residents interested in convenient amenities from golf, to direct beach access and a hotel resort lifestyle. The demand showed a need for proposed changes to land policy to open up the buying pool for luxury homes in what is a tightly controlled real estate market. The majority of the luxury home sales were to Americans followed by British and Canadians. The luxury condo market also saw an increase in the number of sales and average sale price. There were 69 luxury condominiums sold to overseas and Bermuda buyers in 2011 versus 64 in 2010. International buyers represented 15 percent of the 2011 condominium purchases with ARV values over $32,400 again with the majority of purchases by US citizens, followed by British. Average sale price of this luxury condominium tier increased 12 percent from $969,000 to $1.1 million. 60 percent of international buyers bought their Bermuda properties as vacation homes in 2011. The remaining 40 percent regard Bermuda as their primary residence and place of employment marking a seven percent increase over 2010 in the number of international buyers making Bermuda their primary residence. Changes to current land policy could boost the luxury market even more. It is hopeful that the policy would be changed in 2012 to allow Bermudians to sell their homes to non-Bermudians, allow permanent resident certificate holders to purchase properties as Bermudians and drop the requirement for non-Bermudian spouses to have special licences to acquire properties. At least $35 million worth of luxury homes has sold in Bermuda in just the first six months of the year. More multi-million-dollar properties had sold in Bermuda in the first half of 2011 than all of 2010, and 2009. The sales represent millions of dollars worth of annual revenue to the Government, given the now 25 percent cost of a licence for a foreigner to acquire a home in Bermuda, plus the one to three percent stamp duty, legal fees and land taxes due.
2010. December 23. Shadow National Security Minister Michael Dunkley yesterday called for all house buyers caught “fronting” to face the same outcome as the couple who bought Southampton property Laughing Waters. About 20 homes are thought to have been purchased using fronting: when a non-Bermudian uses a local as a front to gain illegal interest in Bermuda land. And Sen Dunkley said he hoped others would be treated the same way as the expatriates who saw their $1.5 million Laughing Waters given to the Bermuda Housing Corporation at no cost. “The UBP has always been on record stating that fronting arrangements are not on,” Sen Dunkley said. “We support the Department of Immigration getting to the bottom of this case. But if we are going to make a big deal about it publicly, we need to always make sure the law is being adhered to. I am sure there are other people who fall into a similar situation. We need to make sure their cases are treated the same way.” Sen Dunkley said the law firm which acted as trustees should also be dealt with by the authorities, although Sen Burch yesterday said it would not be penalised. On Tuesday, Sen Burch announced the BHC had acquired the home as a settlement after finding out the expatriates bought it illegally. Instead of being prosecuted and facing a possible jail sentence, the couple must pay $4,500 rent a month for the next five years; that cash will go towards national housing needs. Sen Burch believes there have been around 20 cases of fronting, and hopes others will now be encouraged to strike similar deals with Government or end up in a legal battle “you cannot possibly win”. He says one case is ready to go to court in the New Year, with two others close. As part of the crackdown, expatriates have until December 31 to get a licence for any property they own or face up to five years in jail or a fine of up to $1 million. Expressing a long-held UBP criticism of that aspect, Sen Dunkley said yesterday: “We still feel many Bermudians are very concerned that because they are married to a non-Bermudian they need to go and apply for a licence.”
For non-Bermudians/restricted persons, once a property has been selected, an application for a license to purchase is made to the Bermuda Government's Ministry of Home Affairs and Public Safety. Your realtor will assist in this. An "Acquisition of Land" advertisement issued in the Official Gazette of Bermuda will say that "Notice is hereby given that (the full name of the applicant), a citizen of (whichever applies) is applying to the Minister of Labour, Home Affairs and Public Safety for sanction to acquire a leasehold interest in or the freehold of a particular property (by name, acreage if relevant, unit number and Parish) - and if relevant, in joint tenancy with a Bermudian parent or sibling or spouse.
While there are a number of realtors (estate agents in UK) in Bermuda, there is not yet any central on-line accessible register of who they are or what services they perform or what sales they have achieved. Nor is there any national website showing all properties for sale or rent at any one particular time. There is a need for all Bermuda realtors to establish a Bermuda Multiple Listing Service. This has long been common in the USA, Canada, UK, Europe and beyond.
Buying. There is a wide choice for Bermudians who can buy any property if they can afford it. Prudence and caution are recommended. Non-Bermudians should note they are limited to the top 5%. Leasing and Renting. Providing the units have their own assessment numbers, there are no di9fferences between what Bermudians and non-Bermudians can lease or rent.
Each single family home and/or apartment has a 9-digit number, after the owner has received a Certificate of Use and Occupancy Permit (Completion Certificate). The owner of each valuation unit - a self-contained (with its own entrance, electricity meters, permit to own a car, etc) apartment or unit in the same building and/or any other building - will also have a (separate) number. Each 9-digit number is unique, no two are the same. The digits are, in this order, Parish number (2 digits); sequential number (4 digits); Split Digit (1 digit); Re-use Digit (1 digit); Check Digit (1 digit).
Persons who do not own but rent apartments in someone's house should always be given and make a point of knowing the separate assessment number of the apartment. This is for their own protection. If it does not have its own assessment number, the person or persons renting will not be able to own a car or have a separate electricity account and may also encounter further difficulties. For example, when the owner or owners of apartments who have not bothered to arrange to have their apartments given their own assessment number, but allow their tenant or tenants to have a car anyway, both they and their tenants are breaking the law and can be prosecuted, also with the likelihood that the car will be impounded or have to be sold. All responsible home owners, owners of apartments and real estate agents know this. There are also other potential problems. For example, when an adjacent or neighboring house - which may or may not be owned by a relative or friend - is used, with permission of the homeowner, for parking of any car used illegally or moped or scooter or all of them, that person too becomes contingently liable, plus also liable themselves or via their insurance companies for any damage caused by any means whatsoever to the car or moped or scooter while parked on the property. It is not right anyway for any tenant to have to park any vehicle in an adjacent or neighboring property because the owner of the property where the tenant is living does not have space in his or her own garage or driveway for the tenant's car and/or moped or scooter. Whenever a tenant parks regularly in any adjacent or neighboring property, he or she or they should always offer in writing to indemnify the property owner fully against all damage to the vehicle or vehicle or property caused by the vehicle or vehicles. Failure to so by a quality tenant could render withdrawal of parking permission or worse.
More than a third of families’ spending in Bermuda is now going on housing — nearly double that of the US. Statistics show 34 percent of household consumption went on housing — dwarfing the amount spent on education (4 percent), clothing (3 percent), healthcare (5 percent) and food and drink (14 percent). The corresponding figure for housing in America is just 18 percent.
That translates into a 30-year mortgage of more than $11,400 a month at current interest rates — assuming the buyer has paid out a five percent deposit of $80,000. While the escalating price of free-standing homes is moving them further out of the reach of middle-income Bermudians, realtors say locals are showing increasing interest in condominiums as a more affordable option for a home.
In many countries around the world - but not yet in Bermuda (although this will change later - good title to piece of real estate is determined by reference to a central land registry which records the owners of all land in a particular jurisdiction. Once an owner is registered, the land registry provides you with a certificate of title - or title deed - that describes the land owned in accordance with an accurate plan.A system of land registration in Bermuda is planned but has not yet taken effect. The present lack of such a system to protect land owners means that a Bermuda lawyer must be retained to research the history of the property to insure than a third party does not have a claim. Every time a piece of real estate in Bermuda changes hands it is recorded in a Deed of Conveyance or a mortgage (see separate headings).
Each such document will attract a significant amount of Bermuda Government stamp duty.
Until April 1, 2000 - but no longer - a Bermudian spouse would have to buy a property first and then voluntarily convey it into the joint names of the Bermudian and non-Bermudian spouse. (It resulted in the payment of additional legal fees and stamp duty on the value of the 50 percent share of the property). But currently, any non-Bermudian acquiring a property with a Bermudian spouse will pay a license fee exceeding US$1,200. The format of the application for a non-Bermudian alone or one married to and living with a Bermudian is set out in law, so a lawyer is advised. It requires all involved as new purchasers to provide a current marriage certificate, two references and a separate bank reference.
From July 2012. Until then they did. Only in Bermuda did this apply, nowhere in any part of the world. Before the change in the law, Bermudians married or living with foreigners, and/or whose parents is/are non-Bermudian, had to get a licence for homes they own and which their partners financially contribute to or benefit from. Locals must had to obtain a licence for such residential properties before June 22, 2010 or face prosecution under the Bermuda Immigration and Protection Amendment Act 2007. Those who failed to comply with the legislation designed to limit the number of non-Bermudians who own land here could have ended up with a five-year jail term and/or a fine of up to $1 million. In 2011 the licence cost more than $1,375 and was needed for first homes, as well as additional properties obtained before June 22, 2007. Since that date, the legislation prevented mixed-status couples from having more than one property. Even where a home was solely in the Bermudian partner's name, a licence was required if their partner gave financial assistance or benefits from the property. A foreign spouse who paid for household bills, such as electricity, cable or water, was deemed to be giving financial assistance. A letter about the licenses was sent with land tax bills to homeowners in 2008. Bermuda banks sent a standard letter to all mortgage holders reminding them of their obligations under the Act. When a non-Bermudian contributed towards mortgage payments or benefits from rent received for a property, a constructive trust was created with their Bermudian partner. If a non-Bermudian spouse or partner provided financial assistance to their Bermudian spouse/ partner to purchase a property, then the non-Bermudian may be entitled to an equitable interest in the property. The Bermudian then had to apply for a licence as a constructive trustee for the non-Bermudan's equitable interest. When the license was in effect the Bermuda Government raked in more than $1.3 million issuing land licenses to mixed-status (Bermudians married to foreigners including UK nationals) couples. The National Security Ministry said 955 licenses were obtained for Bermudians married to non-Bermudians between June 2007 and the end of 2011 as part of the Bermuda Immigration and Protection Amendment Act.
spokesman said the high number of licenses reflected the large amount of land
owned by foreigners; that it was indicative of just how much Bermudian land has
elements of foreign ownership. It illustrated the importance of the 2007 Act.
"We need to properly safeguard the interests of Bermudians seeking to own
their own homes against the background of significant foreign involvement in the
local real estate market. 37 percent of Bermuda’s land is owned by
non-Bermudians, which is greater than the statutory limit. " Bermudians
married to non-Bermudians complained they’re discriminated against by the 2007
ruling, which required them to get a licence to buy property as part of a
crackdown on fronting, the practice of foreigners gaining an unlawful interest
in land by using a local as a front. While the law is now reversed it was made
clear there would be no refund for those who already bought licenses. They cost
$1,375 each, giving Government a total $1.31 million, which went into the
Consolidated Fund. Couples had to pay legal fees in addition to buying the
need for a license depended on personal circumstances and the Department of
Immigration drew up the following list of questions to help you determine
if you need to apply: 1a.
Did you own your house prior to the beginning of your relationship with your
If yes, have you and your spouse/partner subsequently undertaken any
renovations together? If
the answer is 'no' to 1a and/or 'yes' to 1b, then answer questions 2 to 7
Is your spouse's/partner's name on the deeds? 3.
Is your spouse/partner a guarantor on the mortgage? 4.
Did your spouse/partner provide you a gift or a loan towards the house? 5.
Did your spouse/partner sign the loan application? 6.
Did the bank take into account both your incomes when granting the mortgage? 7.
Does it require both your incomes to maintain your home (i.e. the mortgage
payments, in particular)? If
you had answered 'yes' to any question from 2 to 7, it was likely you needed a licence.
If you had answered 'no' to questions 2 to 7, you may not have needed a licence.
The need for a license depended on personal circumstances and the Department of Immigration drew up the following list of questions to help you determine if you need to apply:
1a. Did you own your house prior to the beginning of your relationship with your spouse/partner?
1b. If yes, have you and your spouse/partner subsequently undertaken any renovations together?
If the answer is 'no' to 1a and/or 'yes' to 1b, then answer questions 2 to 7 below.
2. Is your spouse's/partner's name on the deeds?
3. Is your spouse/partner a guarantor on the mortgage?
4. Did your spouse/partner provide you a gift or a loan towards the house?
5. Did your spouse/partner sign the loan application?
6. Did the bank take into account both your incomes when granting the mortgage?
7. Does it require both your incomes to maintain your home (i.e. the mortgage payments, in particular)?
If you had answered 'yes' to any question from 2 to 7, it was likely you needed a licence. If you had answered 'no' to questions 2 to 7, you may not have needed a licence.
This applies only to Bermudians and means a home, irrespective of area, that is not in the top 5% of purchase price and land valuation and so may not be sold to any non-Bermudian, only to Bermudians. Some mid-priced Bermudian homes, like this desirable one off the South Road in Paget shown below, are in lovely areas and have nice sea views, close to the hospital and near the city of Hamilton.
Bermudian home. July 2009 Photo by author exclusively for Bermuda Online. Has "location, location, location."
Same Bermudian home showing Bermuda cedar work and sea views. July 2009 Photo by author exclusively for Bermuda Online
Based upon April 2013 market rates the cost of building a home with traditional residential Bermuda construction is $370 per square foot. This excludes the cost of the land. The standard Bermuda price now for real estate is now a standard $1.5 million an acre, for undeveloped or re-developed land, without a house or utilities. For Bermudians, the average price of a single family detached home without water views is now over $1.2 million, of average size 0.25 acre. In Bermuda, condominiums now have about 62% of the total 2013 housing market. The average price of a condo in August 2013 was about $800,000. In comparison, in the USA in April 2013 the median price of an existing single-family home is $185,300.
Housing is on average about four hundred percent more than in the USA, and Canada, 220% more than in the UK.
Overall, only 51% of all Bermudians own their own homes - the lowest rate by far in all the developed countries.
|Own house or condominium with mortgage||7.1%||19.5%||29.42%||27.41%||11.4%||21.1%|
|Own without mortgage||2.1%||5.6%||12.1%||31.1%||60%||22.8%|
Source: 2000 Bermuda Census (last available figures)
30-year mortgages are now available to qualified persons from the local banks at interest rates totaling about 9 percent per annum (7 percent plus finder's fee). Bermuda banks require a household to make in excess of $12,000 a month to meet average 30 year mortgage payments. Plus, they need a $250,000 down payment, as a bank will not lend more than 85% of the appraised value of the property. Thus a far greater number of Bermudians than non-Bermudians in other countries are not able to afford home ownership. The number of households that can afford to buy the average Bermuda property is 5,064 of the 19,505 households in Bermuda making over $108,000 a year.
The Bermuda Housing Corporation has built several thousand properties which it has sold to Bermudian families. The original idea was to provide subsidized housing to Bermuda's lower income families. But by international standards of subsidized housing costs, these are extremely expensive.
The legislation when a Bermuda property owner dies, and the procedure, formalities, executor, executrix, objections, etc. See Executors or Bermuda Laws.
See http://www.landvaluation.bm/taxframe.htm. The methodology employed by the Bermuda Government to determine its real estate tax (in UK, the equivalent of Council Tax). (Note, the highest market rent ever achieved on the Island to date is $35,000 a month, or $420,000 a year).
Local banks use independent appraisers to establish the value of a property for mortgage, valuation and other purposes. If done at the request of a bank for a mortgage on an average Bermuda home valued at $500,000 the fee will generally be from $300-$500.
See under Architecture. Architects in Bermuda must be registered under the Architects Registration Act 1969. In March 2004, more than 70 architects were registered.
Meaning that non-Bermudians (as well as Bermudians) can buy the property mentioned. It generally means that the property, which may be a condominium or a family home is in the top 5% of both Annual Rental Value (ARV) and Land Tax. Estate agents (realtors) state this on the properties they sell. However, it can also be a property within a Bermuda Government approved-for-sale fractional ownership complex.
Provisions include clamping down on the practice of "fronting", where a Bermudian illegally fronts a trust to buy and hold land on behalf of non-Bermudians.
Both a guide and specification document for contractors and home owners alike on all matters concerning traditional residential construction. Rigidly enforced, partially to ensure homes can withstand major storms. Individuals and entities wishing to bring new building products into Bermuda must first contact the Senior Building Inspector of the Department of Planning of the Bermuda Government to determine if the product meets local standards. Recently, innovative construction alternatives have included faux roof slate - imported - to replace or repair Bermuda slate and known as Dura Slate - steel frame dwellings and faux lumber (PVC) to replace or improve or with a better price than the local product.
Boundary Survey. If you are buying or selling a single family home, make sure the boundaries are staked and the stakes can be identified. If they are not staked, a surveyor should be consulted to do so. The vendor should either be asked or should volunteer to re-stake the property to confirm there are no encroachments on the property.
Structural Survey. While not yet common in Bermuda, the requirement for a structural survey is a prudent step in older properties that have not been rewired or re-plumbed for many years, and/or where termite damage is evident and/or or where the site may be steeply sloped.
The Bermuda Police Service issues reminders to the public to be sure to lock their homes before they leave for any length of time. There are numerous reports of break-ins at homes after they are left unlocked. Police tell the public to secure all windows and doors before leaving to prevent being victims of burglary. Thieves needing to fuel their drug habits are some of the nastiest and often the most violent or destructive burglars.
See Bermuda Immigration and Protection Acts. Some non-Bermudian residents with unblemished continuous residence have been in Bermuda for periods exceeding 20 and 30 years yet have not been given citizenship. It means they are not not allowed to vote, or to register to vote, in any election after they become 18 years old, even when they have been model residents for years. Those in this category are mostly from the USA, Britain, Canada, Caribbean and Europe, but some are from Africa, Asia, Australia, New Zealand, Philippines and elsewhere. Without citizenship, persons also cannot buy any real estate as Bermudians can if they can afford it; are limited to the top 5 percent of property in assessed value and a particular kind and type of property only and must pay a substantial purchase tax on top of other taxes; cannot obtain any local scholarships from any organization; if of employable age are not allowed to take any employment but are limited to the kind of employment on a Work Permit approved by the Immigration authority of the Bermuda Government; and may not under any circumstances be an executor or executrix of any Bermudian-owned property not in the top 5% of Annual Rental Value. Their attorneys are required to tell them this and would-be executors are expected to know this. They should also check with the Bermuda Government to see if it is permitted or not for them to benefit in any way financially from any Bermudian-held estate. They may only be executors of Bermuda property which is presently in non-Bermudian hands and as such is in the top 5% in Annual Rental Value. Nor are they - or any other non-Bermudian - allowed to be sole owners of a business in the local marketplace. They are limited to a maximum 40% holding in shares and management and are prohibited from employing any ruse that will enable them to overcome this restriction.
They include a Stamp Duty charged on a sliding scale. It is 2 ½ % of the first $100,000; 3% of the next $400,000; 4% of the next $500,000; 5% thereafter. It is is usually payable by the Vendor and the Purchaser in equal shares.
Purely as a guide:
|Property value||Stamp duty applicable|
For non-Bermudians, the length of time will be determined by how long it takes the Department of Immigration to process an application for a License to Acquire Property. This can range from 6 weeks to nine months. Sales contracts usually specify that the closing take place within a set time from the date of the grant of the License. A License to Acquire Property is required for non-Bermudians wishing to buy a home in Bermuda. The government charges a fee of 22% of the price of a house (or 15% if you are buying a condo) for this license, if it is granted. The review process is designed to determine that you are financially independent and not an 'undesirable.' Personal and financial references are required and will involve some research. Your local lawyer will guide you.
Condos, Convict Bay
Condominium ownership in Bermuda has become increasingly popular over the last 15 years partly because it requires a lower initial cash outlay and presents fewer responsibilities than for a traditional householder. Generally, a condominium owner is only responsible for the interior. External repairs, redecoration, grounds maintenance and insurance are shifted away from each owner, to condominium management. However, some homework is required before purchasing a condominium. Prospective buyers should determine to their satisfaction, by visiting each unit in which they may be interested, how much privacy and freedom there is, compared to and generally less than a traditional house. Rules and regulations written into condominium terms and conditions can seem restrictive. However, they can encourage good standards, for the benefit of all condominium owners. For example, noise can be reduced by requiring condominium owners to fit carpets and comply with auditory restrictions during defined night hours. Often, businesses and trades are prohibited from operating from a condominium. On-going contributions towards maintenance expenses can seem burdensome, especially as development buildings age and require more upkeep. However, the owner of a traditional house is solely responsible for the costs of upkeep, whereas condominium owners share responsibility for costs and can together accumulate a specific reserve over time. Such an accumulated reserve is known as a “sinking fund”, which spreads out payment for expenses over time and between all owners in a development. If a development is extravagantly maintained, ongoing fees may be too high; but if poorly maintained, the development may be a less desirable place to live.
An acceptable balance is required. Watch for expensive upcoming costs, for example with the elevator, roof and other structural repairs as owners must contribute toward those costs unless an adequate sinking fund has accumulated. In this regard, a professional buildings survey may assist you to determine what any upcoming costs may be. Investigate the condominium company’s accounts for the last three years for a sinking fund, for any non-contributions and for financial health generally. Missing contributions may indicate vacant units, or discord among existing owners and such could affect the desirability of the development. Non-contributions may have to be made good by those that do contribute; this is unfair, but may be the only practical solution for essential works. If owners have a shareholding (and so a say) in the management company, expenses may be kept to an acceptable level. Make sure that you understand how and when maintenance charges can be increased, and determine the percentage contribution to ensure that the charges for the chosen condominium are fair. Check that the buildings insurance is at a reasonable premium, for an adequate sum, and covers the unit — and be aware of any unreasonable exclusions. In case of a catastrophe, management should be obliged to reinstate the development (and so each condominium), within a reasonable period of time, using insurance proceeds. Talk to current owners and occupiers to discover the positives and negatives of the development, and ask how effective management is. Units in a neglected development may not appreciate and could even lose value. Check how active owners are in management. You may, or may not, want to become involved in management. In most cases, control will have been transferred to owners. For leasehold condominiums, make sure that each property owner becomes a shareholder in the landlord company. For small developments, it is likely that all owners are obliged to become involved in management.
Condos, Flatt's Village
Many condominiums are leasehold. A leasehold property is a depreciating asset, however many leaseholds are for around 999 years. Beware of leases with fewer than 70 years left, as they are unlikely to prove a good investment. Finance is unlikely to be available for a short-term lease, and the property itself represents less value to pass on to children. The more knowledge a purchaser has about a development, the more confident he or she may be about the potential success of ownership. As with all complex matters of law, do not sign any legally binding purchase agreement without first obtaining legal advice from a good Bermuda lawyer.
In 2011 the Bermuda Government announced that more than 500 condominiums across the Island, including The Waterfront in town and Mizzentop in Warwick, can now be sold to non-Bermudians (restricted persons). Earlier, non-Bermudians could only buy condominiums with an ARV of $32,400 or higher. Government amended a section of the Bermuda Immigration and Protection Regulations Act and added 521 condominiums to the list of units that can be bought by expatriates. These amendments were made through a notice in the Official Gazette. Forty-three of the units are on former tourist properties. The Government notice stated the following condominium units are eligible to be held or acquired by restricted persons, namely non-Bermudians.
The list includes:
50 units at Manor House, Smith's
48 units at Mizzentop, Warwick
44 units at Southdown Farm, Southampton
43 units at Landmark, Southampton
40 units at Mount Wyndham, Hamilton
36 units at Innwood, Paget
30 units at Roxdene Apartments, Pembroke
30 units at The Waterfront, Pembroke
30 units at Cloverdale Apartments, Devonshire
26 units at Warwick Villas, Warwick
21 units at Panorama Apartments, Paget
19 units at Pink Beach/Hidden Cove, Smith's
18 units at Grosvenor Apartments, Pembroke,
18 units at Queen's Cove Apartments, Pembroke,
16 units at Mount Langton, Pembroke
12 units at Grove Apartments, Smith's
12 units at St James Village, Flatts, Hamilton
12 units at former Mermaid Beach Club/Breakers.
6 units at Palmetto Hotel and Cottages
6 units at former Surfside, now Cliffside.
4 units at Pomander Gate, Pembroke.
Units at Convict Bay, St. George's.
Condo monthly fees must also be a consideration. In April 2013 they averaged $500 a month, on top of Land Tax.
A conveyance deed is a document, with considerable stamp duties involved, that in Bermuda conveys legal title to the owner, if mortgage-free, or if with a mortgage, to the lender with whom the deed is lodged and with the mortgage recorded in the Book of Mortgages at the Registrar General's Office. When a mortgage is repaid, a re-conveyance deed certifies that the property is no longer encumbered, with the bank asking the owner for the name of his or her attorney. The re-conveyance makes it clear that the debt is repaid. The legal cost of a re-conveyance is less than the cost of a conveyance, with stamp duty payable by the owner based on the original mortgage loan amount. The attorney will also arrange for the mortgage to be marked as satisfied in the Registrar Genera's Office. Those who do not get a re-conveyance risk having major problems when they decide to sell.
There are strict development guidelines and rules. Development & Planning changes must be publicized before approval or otherwise. Bermuda's Department of Planning ultimately determines what can and cannot be done by way of development. Guidelines and specifications are set out in written form. Permission is routinely denied for anything which falls within these specifications and with the right guidance may well be permitted to do certain projects which fall beyond that scope, if in the public interest to make such exceptions. Those considering any development should consult an architect experienced and successful in dealing with the Planning Department.
All additions, alterations, conversions, conversions, extensions, improvements, etc, must be made to the Bermuda Government's Department of Planning, 3rd Floor, Government Administration Building, 30 Parliament Street, Hamilton. The applied-for changes will be advertised in the Official Gazette by Parish with the full name and address of the applicant in each Parish and the changes sought, with a Plan Reference number. Any person wishing to object must do so within 14 days of the date of publication of the relevant notice. Objections must be written, in letter format, stating any interest which the objector may have, with names and full addresses and with a concise statement of the grounds of the objection. For further details, see the Development and Planning (Applications Procedure) Rules 1997.
Everything depends on the reliability of this. When outages occur from gale force winds because only relatively few homes and streets have underground electricity, electric water pumps do not work and consumers cannot access the water. Some homes have - and many more need - portable generators (see separate heading). A serious disadvantage is if the property needs major electrical work. It could involve months of stress and strain in high humidity. All this is at a very high local cost compared to North America and Britain.
At least 37% of Bermuda's homes are believed to be beneficially owned by non-Bermudians (non-nationals, foreigners). In February 2010 the Bermuda Government announced the compilation of a register of non-Bermudian land ownership and granted non-Bermudian landowners in Bermuda (foreigners) a provision to ensure they complied with a Bermuda anti-fronting law. Expatriates who own homes and other real estate here under a licence granted before August 2007 had until June 22, 2110, under the terms of the Bermuda Immigration and Protection Amendment Act 2007 and 2010, to get that licence validated by Government or face having to sell their property and probably be fined heavily as well. The latest legislation was a law designed to outlaw the practice of fronting, where non-Bermudians gain an unlawful interest in land here by using a Bermudian "front." The Act requires non-Bermudians who contribute towards mortgage payments or benefit from rent on a property to be licensed even if they are not named on the title deeds. One of the aims of the 2007 Act was to allow Government to gain an accurate picture of the acreage of land owned by non-Bermudians. It is supposed to be no more than 400 acres per parish, but is believed to be more. The true scale of foreign land ownership had yet to be determined exactly. Bermuda has just 13,000 acres of land, with 6,000 of those for residential use. That may prove to be the highest percentage of land owned by non-citizens of any country in the world.
Fairly new, within private membership property developments and hotels. Now a popular form of property ownership in Bermuda by non-Bermudians. Fractional ownership offers the purchaser a deeded real estate interest in a Bermuda residence but they do not confer any permanent residency or work permit rights (they have to be applied for separately and are based on merit or appropriate employment opportunities, in both cases needing approval from the Bermuda Government. But for regular visitors who do not seek permanent residence or to work in Bermuda, these developments offer many amenities such as swimming pools, tennis courts, golf course/club, beach clubs etc. The purchase licensing fee is 10% of the purchase price. Presently there is no central register or website. Some are being sold by hotels, others by realtors.
And alternatives if you don't have one.
Whether buying or renting, an apartment of any size or house with a garage is essential for a car (only one per household is allowed) or moped or scooter. Those without one should be avoided because vehicles not stored in them just do not stand up to Bermuda's salt-laden air, constant winter gales and periodic hurricanes. Do not leave your vehicle outside at night without being securely garaged (in a garage with four solid walls, not a flimsy carport). Even rust-proofing is only partly effective for garaged vehicles. Be aware that Bermuda can often have hurricanes or storms or gales and plenty of rain.
Left out in the driveway or under a flimsy car port, many vehicles in Bermuda could suffer damage. In the aftermath of Hurricane Fabian in 2003, many people returned to their vehicles only to find them damaged or destroyed as a result of flooding and fallen debris. If you have no choice and can't garage your car, consider parking your vehicle in a public car park such as Bull’s Head, Hamilton. The cement structure is likely to keep your vehicle safe in a severe storm. If you can't do that either, park away from land which is liable to flooding and try to locate a lee, such as a wall or a rock face for your vehicle to keep it safe from high winds. Don't park near trees or electricity poles. Casuarinas are shallow-rooted trees, which can be easily uprooted during a storm. Norfolk Pines have branches that can break easily and can damage your vehicle. If your car is exposed to wind and rain, try to park the car with its rear-end to the wind. This prevents salt, sand and debris from getting under the hood and into your engine. Plus, at least try to keep it in good working order ahead of time for use after the storm, when you’re likely to need it. Check your lights and brakes and ensure your tires have sufficient air pressure and top up all vehicle fluids. Also, don’t forget to fill your car with gas. If you are leaving the Island on vacation or business during likely bad weather or a hurricane or windstorm, do not leave your car at the airport. During Hurricane Fabian, many vehicles that were parked at the airport were destroyed due to flooding and damage to the airport itself. The airport and Bermuda Government disclaim any responsibility for damage to cars parked in paid parking areas at the airport.
For home owners who do not wish to do this themselves, they can employ a gardener from $35 an hour or a gardening contractor which will quote for year-round maintenance.
Especially after Hurricane scares when virtually all Bermuda homes could without electricity for periods ranging from days to three weeks. Portable generators are an absolute "must" for all who own homes and many who rent homes or apartments. There is a very high Bermuda Government Customs Duty rate on them, exceeding 30%. If bought locally, they can retail for over $2,000. If bought and imported privately, from places such as Home Depot (enter "generators" in the search prompt) in Florida or New York, they will still cost more than $950 after transportation delivery and Customs duty. As most homes in Bermuda are of limited acreage (one third or less) and are close together, the noise of a generator can be very stressful, so should be plugged in only during the day.
But not be employed, for which a separate Work Permit is required by any non-Bermudian.
Not for everyone and with some disadvantages, but for those who like to live on boats, the pros outweigh the cons. It is a viable alternative to the huge cost of buying or renting land-based housing in Bermuda. But space is at a premium at places such as the marina in Dockyard, where a waiting list has been created. Other places include Ely's Harbor, Mangrove Bay, Jew's Bay, St. David's and St. George's Harbor. The cost of a mooring and what comes with it can be crucial. Costs from from $85,000 for a 10' by 35' Vagabond but expect to pay at least $160,000 if you want guests to sleep over. Users require strict compliance with local marine and environmental laws.
This is especially relevant for non-Bermudians working in Bermuda on Work Permits. These should be avoided like the plague as a potential source of trouble and expense. An illegal apartment is one that has not passed the tests of the Bermuda Plan 1992 Planning statement and has one or more of the following faults:
When property - houses and/or condominiums and/or land - is passed on by a parent or parents to their children or relatives, they become owners and/or co-owners. There are two kinds of co-ownership, one known as "joint tenancy" and the other as "tenants in common." There are significant differences between the two. It's also a legal oddity that despite a person or persons concerned being owners or co-owners they are legally joint tenants or tenants in common as the case may be.
A house and land held in a joint tenancy results in each co-owner having an unascertained share. That share cannot be sold separately; if a co-owner dies, the deceased's share automatically goes to the other co-owners whether or not there is a will.A joint tenancy is usually most appropriate for a husband and wife, who remain married and wish the surviving partner to automatically own the marital home in full after the death of one spouse. For a joint tenancy, "four unities" must exist - those of possession, interest, title and time. Unity of possession means that each co-owner is as much entitled to possession of any part of the land as the others; unity of interest means that the interest of each joint tenant is the same in extent, nature and duration; unity of title means that each joint tenant must claim their title to the land under the same act or document; and unity of time means that the interest of each tenant must vest at the same time. The four unities are often present in a tenancy or voluntary conveyance of land to two or more individuals, without any further reference regarding the kind of ownership. However, the four unities can be displaced by "words of severance", which if used indicate co-ownership by way of a tenancy in common. Additionally, the four unities can be displaced if there is evidence of an intention contrary to creation of a joint tenancy. For example, if business partners acquire land as co-owners, the established rule is that ownership automatically passing to the other co-owners has no place in business. Business partners usually, therefore, have a tenancy in common unless specific wording is found creating a joint tenancy. A joint tenancy can become a tenancy in common by a process known as "severance", which occurs by the action of one or more co-owners, or by a course of transactions, indicating a tenancy in common. After severance, each co-owner usually has an equal share in the newly created tenancy in common.
In a tenancy in common, see http://homeguides.sfgate.com/tenants-common-legal-rights-6824.html, where each owner has a specific share, for example 25% each in a family of four children, or 50% each with two children, or by arrangement each co-owner can hold an agreed proportion of the property. This form of co-ownership also enables all the parties concerned to transfer their shares during their lifetime if they wish, without any legal requirement to notify any other party beforehand and bequeath their shares entirely as they wish in their will, a process which will ensure their shares continue to be protected. This means that on the death of any of the co-owners in a tenancy-in-common, their shares do not pass to other co-owners (as it does in a joint tenancy) but to a spouse or another or others designated in a will. One characteristic of a tenancy in common is that a co-owner can transfer his or her interest to a third party. However, such a transfer could result in a new and undesirable co-owner. To avoid such a possibility, co-owners may wish to enter into a scheme requiring a selling co-owner to give a right of first refusal to the other co-owners. If a co-owner of either a joint tenancy or tenancy in common desires to sell without the agreement of the other co-owners, the Partition Act 1855 provides a potential remedy. The co-owner desiring sale may apply to the Supreme Court for an order, which could result in a sale of the land, as directed. After sale, proceeds are allocated to the co-owners in accordance with the court order.
An attorney expert in the area can assist with:
advising if land to be acquired should be held as a joint tenancy, or as tenants in common;
finding out if land already acquired is held as a joint tenancy, or as a tenancy in common;
transferring a joint tenancy to a tenancy in common;
arranging a scheme for co-owners to have first refusal against a selling co-owner;
transferring a tenancy in common to a joint tenancy; or
attempting to force the sale of co-owned land.
When a will does not specify that co-ownership of a property goes to specific individuals in joint tenancy or as tenants in common, a lawyer may suggest a Declaration of Trust be signed, to record the respective shares. If the property is sold in the future the amount of equity distributed to each owner will reflect the terms of the Declaration of Trust. A lawyer should be consulted for more details, terms and conditions, changing from joint tenants to tenants in common, etc. and to inform clients of any problems.
Land Taxes are a property tax charged on all developed land throughout Bermuda with some minor exceptions. The expression "land" is used in its broadest sense to include land, buildings and structures attached to land. Undeveloped land is not liable to tax, though developed land that is merely unoccupied is still liable.
Each piece of property that is liable to tax is known as a "valuation unit" and details describing it and its assessed annual rental value (ARV) are entered in the Valuation List. This List is prepared and maintained by the Land Valuation Officer under the authority of the Land Valuation and Tax Act 1967 as amended.
A printed copy of the Valuation List is available for public inspection at the Land Valuation Department. Note that The Land Valuation Department just deals with the property and its assessment. The taxpayer, tax payable, billing, pensioner relief (exemption of Land Tax for qualified Bermudians who both own and occupy the property) etc. are the responsibility of the Tax Commissioner’s Office.
The Tax Commissioner's Land Tax Officer calculates the amount of land tax chargeable on all valuation units and demand notes are issued to taxpayers half-yearly. See http://www.gov.bm/portal/server.pt?open=512&objID=275&&PageID=231421&mode=2&in_hi_userid=2&cached=true.
The amount of tax is determined by multiplying the ARV by the appropriate tax rates. See http://www.landvaluation.bm/taxframe.htm.
For example, a house owned by a Bermudian family, with an Assessment Number (see below) of 071022015, with an ARV of $46,800 has a 2013 annual tax of $1,258.80.
Here are the tax rates as amounts of tax: http://www.landvaluation.bm/taxframe.htm. (Note, the highest market rent ever achieved on the Island to date was $35,000 a month, or $420,000 a year).
Bermudians and other residents pay these taxes to the central government. They help pay for defence, health, education, emergency services (ambulance, fire and police), public highways, public parks and garbage disposal. Land taxes in Bermuda are property taxes elsewhere. In Bermuda, the government believes property taxes reflect "ability to pay" with the more affluent living in higher value properties. The "owner" of a valuation unit is liable for all land tax charges. This "owner" is usually the freeholder but can also include a life-tenant, a leaseholder for three years or more and even a periodic (yearly or monthly) tenant in the case of properties owned by the Government, WEDCO or BLDC. The Land Tax Officer can advise you more fully if you are in doubt about your liability. Some residential properties and many commercial properties are let on leases for three years or more making the tenant the "owner" for land tax purposes regardless of any provision in the lease concerning taxes. However, most of these latter provisions usually require the tenant to either pay these taxes or to reimburse the landlord if he has to pay them in addition to the basic rent for the property. As the liability for land tax attaches to the property itself in the event that any "owner" defaults on payment, it is important for landlords and/or prospective purchasers to always ensure that all land taxes have been paid. Note that land taxes - property taxes in North America, Council Taxes in the UK - paid by homeowners in Bermuda do not include access to a municipal or local water supply or sewage disposal.
Bermuda's Land Valuation and Tax Act 1967 requires all properties on the Island be revalued every five years. The 2009 draft valuation list was published in late 2009. The last revaluation before that was carried out in December 2004. The government states all properties are revalued at the same time to maintain fairness in the Valuation List. Property values change over time with some property types and areas going up in value while others in some cases may go down. The revaluation re-levels the playing field by reflecting these relative changes in value. See the Land Valuation website www.landvaluation.bm. This Land Tax in Bermuda is payable to the Bermuda Government by all Bermudian and non-Bermudian property owners. It is based upon the Assessed Rental Value (ARV) for each private dwelling (apartments, condominiums and single-family detached homes) and commercial buildings with the ARV determined by the Bermuda Government's Land Valuation Officer. Amended - higher - Land Taxes apply from 2009. Your real estate agent will tell you how much land tax applies to a particular property of interest to you. Note that Bermudian home owners over 65 qualify for exemption or a rebate (a) when the property is registered in their own names, not in the name(s) of their child(ren) and, since early 2012 (b) if the ARV is less than $50,000 (Until 2012 all Bermudian homes owned by senior citizens were eligible, irrespective of ARV). Contact the Land Tax Officer for an application form if you consider that you are eligible for this relief.
In Bermuda, land taxes do not change when a property changes hands, unlike in the UK where Council Taxes - the equivalent of Bermuda land taxes - may do, unfairly to newcomers. Also, in Bermuda and in most other jurisdictions too other than the UK - land/property taxes change by law uniformly in a stipulated number of years (in Bermuda, every 5 years, with the previous one done in 2004) in a much fairer system for all than in the UK. Whereas in the UK, while newcomers pay higher property taxes, residents who have been there far longer pay their Council taxes based on valuations last made in the early 1990s.
In Bermuda, the Land Valuation Office states that:
All properties are revalued at the same time to maintain fairness in the Valuation List. Property values change over time with some property types and areas going up in value while others in some cases may go down. But this is clearly in theory alone not in practice, to judge from some of the huge inequities that can easily be ascertained from the Land Valuation website at www.landvaluation.bm on neighboring properties.
The revaluation re-levels the playing field by reflecting these relative changes in value.
Copies of the draft valuation list 2009 are available in the post offices throughout the Island.
If anyone believes the information is wrong, contact the Land Valuation Department until June 29, 2010 to make an objection.
The Bermuda Government's Land Valuation Officer is now referred to as the Director of Land Valuation, under the Land Valuation (Reorganization) Bill 2002.
Land Evaluation Appeals Tribunal. Those who complain about their taxes can try complaining to this Bermuda Government body, appointed under the Land Valuation & Tax Act 1967 and shown in alphabetical order in Bermuda Government Boards.
Who pays Land Tax? Usually, the Land Tax on Private Dwellings on rented properties is paid by landlords, not tenants. But it is not uncommon for many local landlords to include the Land Tax in the sum they ask for rentals. (Note, the highest market rent ever achieved on the Island to date was $35,000 a month, or $420,000 a year).
See http://www.landvaluation.bm/taxframe.htm. On March 15, 2013 it was announced that with effect from July 1, 2013 land tax will be increased for the Island’s most expensive homes, according to legislation approved in the House of Assembly. The Land Tax Amendment Act increases taxes for properties with an annual rental value of between $90,001 and $110,000 from 9.6 percent to 19.2 percent. Taxes on properties with an ARV of more than $120,001 rise from 19.2 percent to 23 percent. Land taxes on all other properties will remain unchanged. Finance Minister Bob Richards said the legislation would only affect a small percentage of homeowners and raise millions in revenue for the Government. “This is fair,” Mr Richards said. “Those who live in the most expensive homes should pay more land tax than others.” Shadow Finance Minister David Burt said he was pleasantly surprised, saying there were “a few more places” to look in order to find similarly progressive revenue sources.
Note how in this British Overseas Territory of Bermuda the following 2013/2014 taxes apply. These figures confirm the stark comparison in British UK and Bermudian annual real estate taxes, excluding water and waste water charges:
In UK. For £950 million 830,000 square feet Buckingham Palace, London, including staff accommodation. Band H. £1,639.04 (about $2504) annually.
In UK. For a £170K 1,750 square feet 3 bedroom house in Scotland, Band F. £1,672.67 (about $2592) annually.
In Bermuda. For a $20 million 11,500 square feet house with ARV of $564,000 plus staff apartment with ARV of $48,000. Amount for main house rises appreciably (by at least 19.2%) from July 1, 2013. $92,292 plus $1,374 (total $93,666) annually.
In Bermuda. (Note, the highest market rent ever achieved on the Island to date was $35,000 a month, or $420,000 a year).
Presently, when offering Bermuda Homes for sale of a type that may be sold to non-Bermudians, most Bermudian realtors do not presently list the land taxes relevant to each property. The above figures may be the reason but most realtors (estate agents in UK) believe they should always be released upfront, not in arrears, to reduce the chance of being perceived as deal-breakers. Bermuda is now the most expensive place in the world by a very wide margin for real estate taxes for luxury homes and this is even more pronounced from July 1, 2013. Comparative figures for competing jurisdictions will be posted when received. In the meantime, while median-value Bermuda homes owned by Bermudians are about the same overall as for median-value American and Canadian homes in property taxes, it should be borne in mind that in North America they generally include water and waste water charges, in Bermuda they don't as these are not services provided by the government. And in contrast to the reasonable property taxes Bermudians pay, those payable by non-Bermudians on their single-family Bermuda properties are exceptionally high, possibly the highest in the world and because of this are shown as such on the expatriates' overseas living negative value for money charts.
Title Registry Office, Milner Place, 32 Victoria Street, Hamilton HM11.
Mailing Address: PO Box HM2587,
In May 2012, in reply to an
enquiry from this writer, a representative from The
Land Title Registry Office (LTRO) stated it will be accepting applications for
registration shortly. The timescale is not certain yet but staff anticipated late
summer/fall of 2012.
On February 6, 2012 it was reported that transactions in Bermuda could soon become faster and less complex as Government plans to introduce a Land Registration Office. Primary legislation has already been enacted to support the move from a deeds-based system to a registration system, but the legislation is not yet in force because secondary legislation designed to set out the operational details of the new system has not been enacted. A registration system will avoid the current paper chase for deeds, resulting in dealings with fewer Government departments than is now the case. Ultimately, the legislation anticipates that property transactions will eventually go online. At present, all real property is unregistered with the exception of Government-owned land, which is in a shadow system, to become live when the new legislation comes into force. Once the legislation is in force, all other real property shall compulsorily become registered, in due time, by “trigger events.” Such events include the transfer of property by purchase, gift, court order, after death, partition, appointment of a new trustee, long lease and mortgage. Registration is to be required prior to application for subdivision, for primary homestead designation, and the formation of a condominium under the Condominium Act 1986. Government has also reserved power, in the legislation, to phase in compulsory registration without the need for a trigger event. Today, an unregistered property owner proves title through at least 20 years worth of good paperwork, known as deeds. Deeds should be kept safe, as if they are lost or damaged, a property can become unmarketable, and therefore less valuable and unmortgageable. The result is that property falls into disrepair, causing a loss to the economy and of precious housing for the community. After registration under the new system, title is to be kept at the Land Registration Office and so deeds generally shall not be required. On request from time to time, the Land Registration Office shall provide evidence of ownership of a title, by way of a title document called an “Official Copy.” A Government scheme may provide compensation for inaccurate registration, resulting in loss. Compensation may not be payable in case of fraud, or lack of care. A compensation scheme is important, as there is no defective title insurance market in Bermuda, due to the inherent dangers in a deeds-based system. On registration, a class of title is to be given, with “absolute” the best, most marketable and mortgageable title. Absolute title is expected in most cases because most deeds are in good order, having been stored with attorneys or banks. A “provisional” class of title can be provided if deeds are lost, damaged, or in poor order. A provisional title is less marketable, but after 20 years of registration, a provisional title can be upgraded to absolute, thereby bringing potentially worthless property back into the economy and community. The possibility of title upgrade may prompt Bermuda insurance companies to develop insurance products to assist with the marketability of provisional titles. The Land Registration Office is to maintain a plan showing boundaries of titles, to be known as the “Index Map”, which is to be based on satellite maps. Boundaries shown on the Index Map are indicative and not conclusive. For this reason, owners should keep a copy of their deeds, as most have careful boundary descriptions. In addition to the owner, others may have rights over property. For example, banks through mortgages and further charges, and neighbours through easements to walk or drive. These rights shall be registerable, as affecting the land and indeed if not registered, such rights may be lost. For practical purposes, registration does not cover every interest in property. Such interests are called “overriding interests” and include short-term tenancies and rights of those in actual occupation, such as spouses. Overriding interests should be obvious on a physical inspection of a property. As a practical step, property owners and potential property owners should ensure that their details are up to date on the Register of Bermudians, maintained by Immigration. The reason being, the Land Registration Office must refuse to register owners who fail to demonstrate Bermudian status, or who cannot produce a License from Immigration.
In December 2011, it was announced that finally, after planning for this since 1999, Bermuda is to change from deeds-based property transactions to a parcel-based land registration system, under landmark Land Title Registration Act 2011. But a major concern was about that law is that it allows government to take over land if it was not registered within three years. But Attorney General Senator Kim Wilson said that the law was not intended to dispossess people of their land. If a bona fide owner could demonstrate after the deadline their claim then they would be the owner of the land. And if the land has been developed by then, the owner would be entitled to compensation. The Bermuda Government had been considering a land title registration legislation to simplify the process of buying, selling and mortgaging land The Department of Land, Buildings and Surveys will introduce a system of land title registration. It will provide a definitive record of ownership and other rights and interests in land such as mortgages and rights of way. There will be a functioning Land Title Registration Office. A new IT system will record the information as well as provide comprehensive details of all land Government holds. Work continues on the online mapping access giving access on address, location and other data layers. Surveyors would be working major mapping projects this year including a new area survey which will produce new larger scale aerial photos of the whole island. In time the new aerial map will be publicly available to the whole community to be used as the basis of decision-making, planning and project work across the island.
On August 8, 2011 it was reported that the Bermuda Government was expected to pass legislation soon creating a land registration system for Bermuda. Although precise details aren’t yet known, the system is likely to be similar to land registration in other Commonwealth countries. By way of an introduction to land registration, as yet not applicable in Bermuda, government-owned land is already registered in a shadow system, to become live when land registration legislation is passed. All other land should be registered over time by “trigger events”, until eventually almost all Bermuda land becomes registered. Common trigger events should be purchase, long lease, mortgage, further charge, planning application, primary homestead application and transfer after death. Presently a land owner in Bermuda proves title through at least 20 years’ worth of good paperwork, known as deeds. Deeds should be kept safe, as if they are lost or damaged, land could become unmarketable leading to a loss of value and difficulty in securing a mortgage. When that happens, land falls into disrepair, causing a loss to the economy and of precious housing for the community. The significant benefit of a system of land registration is that once land is registered, title should be proved without recourse to deeds (avoiding delays with a hunt and transfer to attorneys). Additionally, Government should guarantee each registered title, with compensation payable for inaccurate registration, resulting in loss. This is important as presently there is no defective title insurance market in Bermuda, due to the inherent dangers in a deeds-based system. On registration, a class of title should be given, with “absolute” the best and most marketable and mortgageable title. Absolute title is expected in most cases, because most deeds are in good order, having been stored with attorneys or banks. A “provisionary” class of title should be given if deeds are lost, damaged, or are in poor order. A provisionary title is less marketable. Over time, a provisionary class of title can be upgraded to absolute, so bringing worthless land back into the economy and community. The possibility of title upgrading may interest Bermuda insurance companies, which could develop insurance products to assist with provisionary titles. Each title should have an official plan of the land based on Ordnance Survey maps. All registered title plans should be consistent with each other, possibly avoiding the need for deed plans to be compared when boundary disputes arise. In addition to the owner, others may have rights over land. For example, banks through mortgages and further charges and neighbours through easements to walk or drive over land. These rights should be registered as affecting the land. For practical purposes, land registration is unlikely to cover every interest in land. Such interests are called “overriding interests” and include short-term tenancies and the rights of those in actual occupation, such as spouses. Overriding interests are usually obvious on a physical inspection. After registration, land transactions usually become faster (possibly going online) and less complex, avoiding a paper chase for deeds and allowing dealings with fewer government departments. The precise details of Bermuda’s land registration scheme are yet to be released.
Environment Minister Marc Bean has promised easier property sales arising from this. All of Government’s land holdings are now entered into the Land Register. The latter now has the authority to register privately held land. The Government foresees significant benefits accruing to the public as a result of the implementation of a Land Title Registry. Such a system should provide for the guarantee of legal ownership of land and the simplification of conveyance transactions. Currently, property transactions can take months to complete, and at significant expense. Once a parcel of land is registered, the register will become the definitive record of title and subsequent transactions can be carried out in a fraction of the time and at a fraction of the cost. Property would have to be registered by the owner following a “triggering event,” such as the conveyance on sale or otherwise, the granting of a lease for more than five years or the creation of a new mortgage. The Ministry estimates that all private lands would be added to the register after around ten years. Mr Bean said the register will reportedly rely heavily on the Government’s Geospatial Information System, marking parcels of land on high-resolution aerial photographs. In order to ensure that Government has the most current and most accurate mapping data, the Department of Land Surveys and Registration, of which the Land Title Registry is a part, will soon procure a new set of aerial photographs. These photographs will be analysed and digitised to enable us to carefully identify each parcel of land. Once in place, the land registry would help to protect the rights of property owners who historically may have been taken advantage of. The Minister noted: “Many of our elder generation have experienced the injustices of their family land being adversely possessed by what some might describe as unscrupulous professionals, and even at times by their own family members. Many of us can tell a tale of land being swindled from their family. Many of us still feel the pain of this theft. It is the intent of this bill to bring an end to this sorry practice.”
Homes with lawns of their own are fortunate in one way, but keep their homeowners or renters busy in another. In drought conditions, which can be frequent in the summer months, it is not advisable to use chemicals to control weeds or even pest and diseases unless the plants are well irrigated and then only in the cool of the day. A "good" lawn should be virtually weed-free, of good colour with little or no thatch and of one grass type. Selecting the right grass type for the specific area will save future headaches with less maintenance problems to deal with. Mixed type lawns can be troublesome not only from a patchwork appearance but also with weed control as chemical control for one type of grass may adversely affect another type. Common Bermuda grass seed is sown at a rate of two to three pounds per thousand square feet, sow in two directions to obtain a more equal coverage. St. Augustine plugs are planted at four inches to six inches apart and are best installed in spring. As temperatures rise, they will, when maintained properly, in-fill quickly. Warm season grasses are St. Augustine and variety Floratem, a chinch bug resistant strain; Bermuda grasses and their hybrids and Zoysia. St. Augustine grass is not always advisable as it is subject to attack by chinch bug which will devastate a lawn in a short period of time given the right conditions. Many homeowners prefer to let landscaping companies handle their lawn mowing and maintenance.
If you lease instead of own an apartment or condominium or home, note carefully that you will not rent by the month but will lease for a specific, mutually-agreed time. Leases are legal and breakage of a lease should not be attempted without risk of a severe penalty. If an employer, not a professional newcomer employee, signs a lease, great care should be taken by the employee not to put the employer at risk. The employee will still be liable to the employer for payment of utilities, conduct and care and interior maintenance of the leased property.
As the Royal Gazette recorded on July 26, 2013:
"A lease is a contract requiring a landlord to provide accommodation and the tenant to pay a rent for use of the accommodation for a fixed time period. Normally, many other conditions are included in a lease, such as who is to pay the land tax etc. As the contract is for a fixed period, any party breaking early is in default and may be liable to compensate the non-defaulting party. Often, a lease is for a foreseeable time period, such that neither party requires the contractual ability to terminate early due to a change in circumstances. If a lease is for a longer period, a landlord and tenant may agree contractual circumstances when one or both may require early termination without liability for loss. As expatriates - newcomers from abroad - constitute a significant portion of the Bermuda residential lettings market, residential leases usually allow a tenant to terminate early in the event that a work permit is withdrawn or not renewed. In such circumstances, the tenant is able to serve notice and the landlord can look for an alternative tenant during the notice period. In the commercial market, landlords and tenants generally look for longer term arrangements but with some added flexibility. A landlord ideally requires a long lease period but a tenant often prefers a shorter period. Both can be accommodated by a longer lease period but with the tenant afforded the ability to surrender (also known as a break clause), for example, halfway through the period. Tenants are often also given an option to call for a new lease period, which is often known as renewal. A tenant that can pay the rent is likely to want to stay at the end of a lease period as moving out can lead to significant expense and business interruption costs. Consequently, landlords are often flexible when negotiating lease periods. Generally, there are three options for a tenant wanting to move out before the end of a lease period: surrendering, transferring, or subletting. Unless contractually available, surrender cannot be forced on a landlord. Logically, unless the landlord has a replacement tenant, at an equal or higher rent, a landlord might refuse to accept surrender. Ordinarily, after surrender, neither the landlord nor the tenant has any liability or obligation to the other. For this reason, the landlord should ensure that all the tenant’s obligations under the lease have been complied with and rents paid, before signing or accepting the surrender. If a landlord is unwilling to accept surrender, a tenant might next consider transferring also known as assigning the lease to a third party assignee. After such a transfer, the assignee “stands in the shoes of the tenant” and is liable to the landlord as the tenant would otherwise be. A disadvantage to transfer is that the tenant remains liable to the landlord for default by the assignee. A tenant may request a release after transfer but there may be no obligation for the landlord to give such a release. If either surrender or transfer is unavailable, a tenant should consider subletting. When a tenant sublets, the tenant remains liable to the landlord under the lease as before. A wise subletting tenant shall ensure, as far as possible, that all lease obligations are passed to the sub-tenant. However, even in those cases, the tenant can remain ultimately responsible to the landlord. A lease often states the circumstances under which a tenant may sublet. A landlord shall be interested to make sure that the sublet contains acceptable conditions because for practical reasons, the sub-tenant can become the landlord’s immediate tenant. This can happen, for example, if a tenant becomes bankrupt. Subletting or sharing by a non-Bermudian company may require a license from Government under section 123A of the Companies Act 1981. There is no such thing as a “standard lease” and so it is important to obtain legal advice and know the contractual conditions before signing a lease, whether landlord or tenant."
The Waste and Litter Control Act 1987and its penalties may apply, but only if the litter from yours or another person's rented or leased or owned apartment or condominium or house is visible from a public place, for example, from a main road or estate road, park, etc. This type of litter should always be reported first to the Bermuda Government's Department of Works and Engineering for investigation.
The Book of Mortgages at the Registrar General's Office will have details of all conveyances where mortgages are involved and all re-conveyances satisfying the mortgage. Bermuda banks are now willing to lend approved buyers up to 80 percent of the appraised value of a house. With an average mortgage of 20 years, persons who are loaned $400,000 for an average-priced $500,000 house will pay a variable rate from 7.25 percent plus fees. A household would need to earn at least $7,000 a month to qualify.
Organizations that provide mortgages include banks; Bermuda Savings & Loan, possibly some local (Bermudian) insurance companies; some law firm's trust departments. Some will lend to non-Bermudians. Terms range from 5-20 years.
In late June 2012 it was announced that some small-scale developments could soon not require a planning application. If approved, the changes would lead to increased efficiency and a faster approval process should the legislation be passed. The General Development Order is essentially enabling secondary legislation that permits a range of small scale development to be carried out without the formal submission of a planning application. Already some forms of small development, such as the installation of solar panels or satellite dishes and the construction of small walls are covered by the General Development Order, which grants automatic approval should specified conditions be met when applied for under current Planning Application rules. Such proposals go through the Permitted Development Process, which are on average dealt with by the Planning Department in six working days. The legislation proposed would expand the list of projects covered by increasing the permitted site coverage for additions, increasing total permitted floor area for additions and including the construction of swimming pools. |Safety, standards and environmental quality will not be compromised by these changes. In particular, safeguards will be in place to ensure compliance with requirements such as the development restrictions set out in the Bermuda Plan 2008. The main objective of this change is to respond positively to the current needs of the Island by expanding the range and scope of works that are deemed ‘Permitted Development’ and therefore can benefit from an expedited approval process. The relevant Ministry plans to make amendments to the Development and Planning Act 1974 to extend the powers of the Development Applications Board to delegate authority to the Planning director in determining straightforward application. The changes came as a result of a recent review of planning legislation. The Department is continually reviewing and streamlining its processes and procedures in the effort to reduce application processing times further. Both of these upcoming legislative changes outlined are consistent with the Government’s mission to gain efficiencies in the delivery of public service.
Bermuda largely follows the UK system, which has its flaws. Technically, a neighbor can object to an owner or new owner's application to Planning for amendments, upgrades, improvements and renovations. Anyone contemplating buying a house that has been noted or described by a realtor or neighbors as needing fixing up or extended or improved or in any modified in a way that needs Planning approval and wanting to make any such alterations now or in the future should make a special point of first asking the selling agent for details and also neighbours of that property if they are likely to object. In theory, if not in practice too, a house clearly in need of an extension or other modification should have had planning permission in principle granted, after an appropriate plan has been submitted. It may reduce the prospective value of a house if this has not been done. A potential seller should also compare the asking price with an competent and reasonably timely market-price evaluation by a qualified surveyor. You are advised not to buy the house if a planning application is likely to be rejected. It's been claimed, but this is arguable, that no purchaser is likely to pay to have plans drawn up and neither would he be able to submit them, until after he/she is the owner and the old owner has received his payment. Any objections a new owner may or may not make to plans a new owner of a house may produce in the future would be the business of the neighbor or neighbors entirely, after considering whether there would be any point under the planning and zoning laws.
The website of any realtor in Bermuda will be shown here gladly as a free courtesy active link if it will reciprocate with a link back to Bermuda Online at www.bermuda-online.org.
See Bermuda's The Property Group.
See under "Land Valuation and Land Taxes. Also see http://www.landvaluation.bm/taxframe.htm.
All who seek to rent a Bermuda home, whether on a short term holiday (vacation) basis or on a monthly lease or rental agreement, are strongly advised, before the rental period occurs, to get it in writing that the owner or owners have had the property and in particular its water tank both examined and certified by a competent Bermuda authority such as the Department of Health, as free from any water contamination that could cause potentially very serious health problems. Most folk who are not Bermudians or long-term residents don't know that Bermuda has absolutely no standard piped-in underground fresh water supply and no piped-out underground waste water and sewage system. It also has rivers or a rainy season, no fresh water lakes. It has to be said publicly that many Bermuda home owners and landlords do not comply with nearly 65 year old Bermuda Government regulations - Public Health (Water Storage) Regulations 1951, which require all household water tanks to be professionally cleaned every six years, as a result of which unsuspecting tenants could be unwittingly exposing themselves, their children and their pets to dangerous drinking and bathing water. It also has to be said that these regulations, which in any event are too old to comply with international current standards, have not been enforced in Bermuda and that many properties have not had their tanks professionally cleaned for possibly as long as 30 years. Many water tanks located in homes rented to non-Bermudians do not meet American, Canadian and other international hygiene standards and prospective renters should make a special point of asking for appropriate certification that water tanks have been cleaned recently before they rent. If they cannot be supplied with such certification they should not rent the property, period.
Some non-Bermudian newcomers receive a housing allowance from their employers. It can pay all or some of the rental costs. Utilities are always extra. Newcomers are advised not to pay any more than 28% of their salary on accommodation if they do not receive a partially compensatory housing allowance. In July 2014 the average rental price of a one-bedroom property is $2,389, a two-bedroom $3,551 and a three-bedroom $5,403. Location and scenery are among the most significant factors.
Non-Bermudian property owners are prohibited from buying 'investment' property or property intended primarily to earn rental income. While they may be given permission by the Immigration Department to rent under certain circumstances, this permission cannot be taken for granted and is generally not given for periods in excess of one year. (A tax of 10% is paid to the government on rental income earned by non-Bermudians).
Under the Rent Increases (Domestic Premises) Control Amendment Act 2009 approved by MPs in December 2009 the annual rental value (ARV) ceiling band for rent control purposes increased from $24,600 to $27,000. The Act sought to stabilize the percentage of premises that are rent-controlled. Tenants without the benefit of protection may be exposed to landlord undesirable practices and abuse, such as speculative rent gouging, inordinate rent increases, rent profiteering and unjust eviction.. Rent control has been in place in Bermuda since the late 1970s and is enforced by the Rent Commission. About 16,800 premises on the Island fall under the $27,000 ceiling, making them potentially subject to rent control. In theory, anyone in a rent-controlled property who felt they were paying too much could go to the Rent Commission. If someone has been paying too much rent for an amount of time, they can get reimbursed.
Landlords and tenants should be aware that a court action may result if the landlord of a rent-controlled property (house or apartment) shows a cynical disregard for the rights of a tenant. A common example of this is physical removal of the tenant or his possessions to re-let at a higher rent. Landlords should know that an order of a court is always required before a tenant may be lawfully dispossessed.
With drug addition rife and burglary and other ant0social crimes common, Bermuda is not a low-risk area.
The vendor is typically responsible for paying 50% of the stamp duties (see below) on a conveyance.
Sellers of properties in Bermuda need to produce title deeds going back at least 20 years. Title deeds must be kept in a safe place known to the owner at all times. Those who have a mortgage should expect the mortgage holder to retain possession until it is satisfied. Possession of a deed is required to mortgage or sell a property.
See http://www.gov.bm/portal/server.pt?open=512&objID=275&&PageID=231422&mode=2&in_hi_userid=2&cached=true. Parents in Bermuda often used to transfer real estate to their children during their lifetime in order to avoid the payment of stamp duty by children, often referred to as a death tax. Today, however, parents no longer must transfer real estate during their lifetime, thereby losing control over the property, in order to avoid stamp duty. The far preferable method of eliminating stamp duty is to apply for a Primary Family Homestead Certificate (“Certificate”). Such a Certificate eliminates stamp duty payable after death on the designated dwelling. A Certificate can be applied for either during the life of the owner, or after death by estate representatives. If more than one dwelling is owned, it is advantageous to obtain the Certificate on the most valuable property. If a deceased owned more than one dwelling, estate representatives can only designate the actual residence immediately prior to death, as the primary family homestead. If the deceased did not reside in any of the dwellings immediately prior to their death because they were in residential care, for example then the estate representatives can only apply for designation of the least valuable dwelling. A designation during the owner’s lifetime provides a surer opportunity to obtain the highest stamp duty relief. If the owner is later in residential care pre-death, the dwelling representing the highest relief should already have been designated. Designating a dwelling as the primary family homestead often extinguishes the need for a transfer of property during the owner’s lifetime. However, owners of multiple properties may still find lifetime transfers useful in particular circumstances. For example, after-death stamp duty on a home with a market value of $1 million amounts to $85,000 while in comparison, the stamp duty on a lifetime transfer of a $1 million property is just $34,000. A lifetime transfer at less than market value is by Voluntary Conveyance. The advantages of such a conveyance are that the owner’s intentions can be effected during their lifetime, and stamp duty can be determined and paid during their lifetime. The disadvantages of such a conveyance are that stamp duty is payable within 30 days of the conveyance, and exclusive legal control of the property is lost. Some control can be maintained by way of joint ownership or by reservation by the person conveying of a “Life Interest” in the property — but both have pitfalls. For example, owning children may refuse to sign a mortgage to finance medical treatment, or for essential window upgrades. An owning child may also get divorced, resulting in the property being sold under a divorce settlement or court order. If owners are comfortable with co-owning property, ownership is either as joint tenants or as tenants in common. In the case of a joint tenancy, the last survivor ultimately becomes the outright owner. This is usually fine with spouses, but possibly not with multiple children, especially when grandchildren are involved. Potentially only the children of the longest survivor would benefit, to the exclusion of other grandchildren. Tenants in common do not suffer the survivorship rule; however, any owner is free to transfer their share to a third party. A reserved Life Interest is not ownership, but creates the right to occupy or collect rent to the exclusion of all others, including the owners. If a Life Interest is reserved, stamp duty is reduced using actuarial tables based on the life expectancy of the person with the Life Interest. The longer the life expectancy, the greater the reduction in stamp duty assessed. Choosing not to make a lifetime transfer maintains full control to sell, let, mortgage etc. In such cases, property may instead be gifted by Will. A Will can be changed at any time, but a lifetime transfer is more expensive, harder to reverse or change (if at all possible) and has further stamp duty implications. When disposing of a dwelling, a Will combined with a primary family homestead designation, not only ensures exemption from stamp duty but also that the dwelling passes to the intended beneficiary. The procedure to transfer the deceased’s assets to heirs is known as Probate. Once probate is obtained and the liabilities, debts and expenses of the estate have been settled, the assets are distributed according to the Will. If there is no Will, then the distribution is according to the Succession Act 1974 and property is shared by relatives in the highest categories set out in the legislation to the exclusion of others in the lower categories. Naturally, spouses and children are specified first, but anomalies mean that a Will is more certain of transferring assets to those intended to benefit from an estate. Owners have individual concerns and preferences for estate planning purposes and each family has its own unique dynamics. Owners should make long-term plans and obtain appropriate legal advice to be sure that their desired wishes are attained and in the least expensive manner possible.
The Stamp Duties Amendment Act 2008, a revenue-raising act, changes the various rates of stamp duty payable on the conveyance or transfer of property and land on the Island. It will need to be clarified whether the seller or buyer pays these or if they agree to split the cost. The new tiered rate structure from April 1 2008 is:
two percent on the first $100,000 or any part thereof;
three percent on the $400,000 or any part thereof;
four percent on the next $500,000 or any part thereof;
six percent on the next $500,000 where the value is more than $1 million but not exceeding $1.5 million, and
seven percent on any remaining value or amount.
Most first-time home purchasers seek properties - condos only usually - valued at less than $1 million. Home buyers in this segment of the housing market will have the full benefit of the reduction in the rate from 2.5 per cent to two percent in the lowest tier. For properties that sell for more than $1 million the rate of stamp tax will be higher.
For Bermudians, the potential for subdivision will be governed by the zoning of the area. Non-Bermudians may not subdivide unless the portion subdivided is sold to a Bermudian and the portion retained has a qualifying ARV.
Only licensed surveyors are licensed under the Professional Surveyors Registration Act 1997. In March 2002, 21 were registered.
See under "Joint Tenants and Tenants in Common."
There are some, mostly at The St. George's Club. Prospective owners should make sure they know what the local laws and regulations are. See http://www.gov.bm/portal/server.pt?open=512&objID=275&&PageID=231423&mode=2&in_hi_userid=2&cached=true.
Note the lack of central heating in most Bermuda homes and apartments. Some Bermuda winter days and nights can be quite damp and chilly for non Bermudians accustomed to having seasonal central heating. Some homes have a fireplace, while others may have a ductless split heat pump system with reverse cycle heat during the winter and air conditioning during the summer. If not, electric heaters and separate air conditioning units for winter and summer comfort levels are available commercially.
Always best, when selling a home. Tenants who will continue in an apartment cannot be counted as vacant possession and could cause complications.
See under "Water" in Architecture
All private dwelling units and apartment complexes must by law have their own water tanks to collect and store rainfall, mandated in size by local building and planning regulations. Without rivers or a rainy season, no fresh water lakes and no public water system for fresh water or waste water (sewage), Bermuda depends on the weather for water. Without regular rain, home owners and commercial properties will have problems. With a solid limestone rock base, piped in water is not feasible, except in certain commercial areas. The supply of drinkable and/or well water is not is not and never has been a Bermuda Government service for the real estate taxes paid. Homes can store about 14,000 gallons per bedroom completely independently of any other building. But with Bermuda Government import duty averaging 30 percent at wholesale and the resulting impact on retail prices of all building materials and plumbing fixtures, a major disadvantage is the huge extra cost of building water tanks that property owners in most other countries do not have to endure.
The Public Health (Water Storage) Regulations 1951 require all tanks used for drinking water to be cleared of sludge and properly cleaned not less often than once in every six years. Those who breach the regulations and are convicted in Magistrates Court can be fined $168 for a first offence and $420 for a subsequent offence. The offender can also be fined $33.60 a day for each day an offence continues. The Department of Health advises the public to disinfect tank water because bacteria and other micro organisms from the environment can contaminate the water in your tank. Your roof catchment not only collects water but also any dust, dirt, leaves and fecal matter from birds that wash into the tank as it rains. The advice is to either: bring water to a rolling boil for five minutes; chlorinate the tank regularly using half a cup of unscented bleach per 1,000 gallons of water; or install an ultraviolet light or distillation system. Fecal matter contains bacteria that causes diarrhoea so failing to disinfect the water can leave it unsafe to drink. In 1998, bosses at the Marriott Castle Harbour Hotel had to carry out an extensive cleaning programme on their main water tank after hundreds of guests became violently ill from drinking contaminated water caused by a leaking sewage pipe, leading to several lawsuits. A study of acute gastrointestinal illness (AGI) in Bermuda carried out between late 2011 and early 2012 found that it was a significant public health issue, with a yearly incidence rate of one episode per person per year. The survey of 861 people found that none believed drinking water to be the cause of their AGI. The predominant pathogens isolated through a laboratory survey of stool samples were salmonella (47.8 percent), campylobacter (23.9 percent) and norovirus (15 percent). According to the 2013 Environmental Statistics Compendium, gastroenteritis accounted for 11.10 percent or 658 cases of the environmentally-related diseases in Bermuda in 2012. To clean a tank, professionals drain the water and then use a pump to remove any trash, using a vacuum to suck up any remaining debris. Most tanks of a small to medium size cost about $400 to $650 to clean.
Landlords and their tenants and all real estate property owners need to know that they break the law by failing to regularly clean water tanks. In the past but no longer they escaped prosecution, despite concerns about the risk to public health posed by Bermuda's rainwater catchments system. They are required to do so under the Public Health (Water Storage) Regulations 1951. The law requires tanks to be cleaned every six years and allows for suspected offenders to be taken to court and fined if convicted. It should be understood that excessive sediment and the failure to regularly clean tanks can promote the breeding of unhealthy bacteria and cause an accumulation of contaminants such as metals and petroleum hydrocarbons that can pose health risks. It can cost several hundred dollars to get a medium-sized tank professionally cleaned. Some people have put off cleaning their tank for years or decades because of the cost of the cleaning and replacing the water. The only way to ensure tanks get cleaned, particularly with landlords, is to have greater enforcement of the law. People need to be mindful of testing their water regularly and using some form of disinfection if there is any indication of unhealthy bacteria. However, they need to know that adding chlorine when there is a lot of accumulated sediment can cause the creation of cancer-causing chemicals. They cannot rely on just disinfecting the tank the sediment needs to be removed regularly as well. The Island's system of collecting and conserving water in individual catchments has several advantages, including that it encouraged people to moderate their water use and lessened the chances of a water-borne infection affecting many due to a piped-in system. But a disadvantage was the exposure of the collective water supply to air-borne pollutants, such as acid rain from a distance, road dirt, vehicle exhausts and emissions from plants like Belco and the Tynes Bay Incinerator. Members of the public can get their water tested by Environmental Health for all of the standard bacterial indicators coliforms, faecal coliforms and E. coli, which are proxy indicators for the risk of pathogenic [disease-causing] organisms. When water is found to be unsuitable for drinking at a property, follow-up samples are taken after advice is given to the occupants about water safety. One of the first questions asked when poor results are received is whether the tank has been cleaned within the past six years. Dependent on where the property in question is located, more frequent tank cleaning may be required. It is important to remember that water test results indicate the water quality for a particular sample, taken on a particular day, and that microbiological flora can fluctuate with every rainfall. While rainwater collection from rooftops is a simple, efficient and cost effective procedure for the provision of freshwater supplies to individual households, it may represent a risk to human health if used for drinking.
This article was written for the Royal Gazette on September 11, 2012 by Attorney Michael Hanson, an Associate and member of the Employment and Immigration team within the Litigation & Insolvency Group at Appleby (Bermuda) Limited. "In the USA, Canada, Europe, etc it has long been accepted and even approved by their tax authorities that working from home, using computers and the internet or in other ways digitally or otherwise, is not a privilege but a right. In the United States alone, estimates are that roughly six million employees will work from home a majority of the time, and about 63 million employees work from home occasionally. But not in Bermuda. Here, it is regarded legally as a privilege, not a right. Thus employers must be aware of the issues they face whether they currently have home-working employees or are considering such an arrangement in the future. Unlike the United Kingdom and other jurisdictions, there is no specific legislation in Bermuda that encompasses flexible or home-working. Indeed, the term “home-worker” (or similar) is not defined in Bermuda's Employment Act 2000 (“the Act”). Because of this, home working is a privilege rather than a right in Bermuda. However, irrespective of where someone works, if a person is employed for more than 15 hours a week wholly or mainly in Bermuda for remuneration under a contract of employment, they are an “employee” for the purposes of the Act and fall under its remit (there are a few exceptions to this). As home-workers are protected by the same employment legislation, what does this mean practically for employers? Firstly, the contract for a home-worker should be drafted to reflect their place of work — that is, their home. Further, most employers will require the employee to attend at the office from time-to-time (for client meetings or disciplinary issues, etc) and this should be clearly included in the contract. Holiday entitlement should not be different to that of any office-based employee. Home-workers will be entitled to the full-time minimum of two weeks holiday (as stipulated by the Act) unless employers allow further time. The same applies for paid sickness absences and other benefits. Employers must also remember that a home-worker’s house is their castle. There is no implied legal right that an employer can enter the home of an employee without the employee’s consent. Therefore, the employer should reserve the right of entry in the contract of employment, for example, to enter the employee’s home in specific circumstances, such as installing computer equipment or to recover any confidential information. The implied duty that employees should not disclose confidential information or use any such information for any purpose other than the employer’s business interest applies to home-workers. However, in practice, confidentiality is much more difficult for an employer to police or monitor when the employee is not in the office. Employers should include an express confidentiality clause in the employee’s contract, making clear what information is confidential and how the employee should keep that information secure at their home. For example, the employer may want to consider passwords that would stop access to its data by the employee’s relatives or household members and provide items such as a locking cabinet or shredder to ensure that company documents are secured or discarded properly. An employer will be able to impose significant protection concerning all work an employee does in respect of or on behalf of their employer and access to that information should be agreed. However, an employee’s contract must be reasonable. For example, a clause providing that an employer can enter an employee’s house at any time, day or night, to check their home computer would not be a reasonable or a fair contract term. Elsewhere in the world, it is generally recognised that more women than men seek working-from-home arrangements, mainly as it is accepted that women often bear the majority of child care responsibilities. There are no statistics for this in respect of Bermuda but it is unlikely that Bermuda is any different. Employers must therefore be very wary of possible discrimination under the Human Rights Act 1981 (“the 1981 Act”) when considering an employee’s request to work from home. If a request to work from home is not considered seriously because it comes from a man, when the same request made by a woman would be properly considered by the same employer, then a claim of direct sex discrimination under the 1981 Act could apply. There is no specific legislation in Bermuda that requires employers to seriously consider any flexible working request. However, while there is no direct duty on an employer in this regard, given the above, it is advised that any such request be considered seriously in terms of whether it is a viable alternative to office working. But it should always be remembered that allowing employees to work from home requires a huge amount of trust, as they cannot be monitored to any great degree to ensure that they are doing the job that employers pay them to do. "
Residential properties are typically zoned either Residential 1 or Residential 2. Residential 1 is higher density than Residential 2. Local realtors can be more specific. The current Bermuda Plan shows the present zoning for every part of the island.
October 25, 2014.
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