Bermuda's natural beauty and gentle climate, proximity to the United States, sophisticated international business community, and tax-neutral status have made it especially appealing to the international purchaser. So desirable that, as far back as the 1930s, it has been necessary to establish policies that control the types and number of homes eligible for purchase by Non-Bermudians in order to preserve the majority of the housing supply for Bermudian population.
As of June 2015, the following categories of property qualify for sale to International Purchasers:
- Freehold Houses and Estates with a minimum qualifying Annual Rental Value ('ARV') of $153,000 - Condominiums with a minimum qualifying Annual Rental Value ('ARV') of $32,400
Note: Every residence in Bermuda is assigned an 'ARV' for the purpose of calculating annual land tax. The ARV is not the land tax, nor is it necessarily reflective of the annual value a given home might expect to achieve on the rental market.
Types of Property Available to Permanent Residence Certificate Holders
PRC holders are a special category of Non-Bermudians. As of June 2015, the following categories of property qualify for sale to PRC Holders:
- Any condominium that is not Government sponsored - Any freehold property that has an 'ARV' ( ie $0 and up)
Types of Property Available to Bermudians
All properties are available to Bermudian purchasers.
- House and estate prices in the "available for Non-Bermudian purchase" category typically range between $2.75 million and $45 million. - Condominium prices in the "available for Non-Bermudian purchase" category typically range between $650,000 and $6.5 million.
We recommend that you contact qualified Bermuda legal counsel.
Ordinarily, Non-Bermudian purchases are made in the name of an individual (or individuals in joint tenancy).
Corporate Land Holding
As of May 2014, local and Bermuda Exempted Companies that meet the established requirements may, at the discretion of the Minister of Economic Development, acquire certain residential and commercial property. For a summary of relevant policies, please read the Corporate Landholding.
Click here to view the PDF
Recently and on a case-by-case basis, Government has approved Non-Bermudian purchasing by application in Trust subject to (a) locally licensed Trustee, (b) the property ownership is limited to one generation and (c) upon death, the property must be sold within 2 years.
Ownership of Multiple Properties
As of June 2015, amendments to the Bermuda Immigration and Protection Act 1956 enable Non-Bermudians to own multiple properties.
License To Acquire Real Estate & Bermuda Government License Fees
All sale and purchase agreements entered into by Non-Bermudian purchasers are subject to the purchaser attaining a license to acquire the specific property from the Bermuda Government Ministry of Labour & Home Affairs (Department of Immigration). This is accomplished through the purchaser’s application on the prescribed form, which is submitted to Government through a Bermuda law firm. The approval process can take anywhere from two to nine months.
As of April 1, 2013, the fee for the grant of the license is reduced from 25% to 8% of the property purchase price for freehold homes (houses) effective until March 31, 2017, after which the license fee shall be 12.5%.
For condominium developments (usually the balance of 999-year leaseholds), the fee is calculated as 6% of the purchase price of the property. - For PRC Holders, the license fee is calculated as 4% of the property purchase price. - The license fee, which is always paid by the purchaser, must be received by the Minister before the license is issued. The license is required before the transaction may complete. - Applicants are required to provide a banker’s reference and personal references (preferably Bermudian if possible). - The license application fee is currently $1416 and refundable upon grant of the license. - For further Information about the Non-Bermudian license process, please contact your Bermuda legal counsel or visit gov.bm
Bermuda's Cooperative Real Estate Brokerage System
- Real estate brokers and sales associates in Bermuda are licensed annually by the Bermuda Government Registrar of Companies and, by law, each company must submit an annual audit. - In most cases, and unless otherwise specified, Bermuda estate agents represent and are agents of the Seller, to whom we have a fiduciary responsibility. At the same time, we are obligated to treat purchasers with fairness and to provide them with the full benefit of our professional knowledge. - When Jack Kripl Bermuda Realtor is asked to represent the Purchaser, he can do so according to a Buyer's Agency Agreement. - The standard agent's sales commission in Bermuda is 5% of the purchase price. The standard rental commission in Bermuda for a lease of one year or longer is the equivalent of one month's rent. - Bermuda Realty conducts business according the guidelines set forth in the Bermuda Chamber of Commerce Real Estate Division Handbook. - There is no Multiple Listing Service in Bermuda. - There is no central electronic source of real estate information in Bermuda. - Bermuda's estate agents work within a cooperative brokerage system and, through this system, Jack can provide purchasers with access to the island-wide inventory of homes.
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Acquisition of Bermuda Property by Non-Bermudians
Non-Bermudians may only purchase property valued above a set minimum Annual Rental Value ("ARV").
The ARV is used to determine land tax and is not necessarily a reflection of market value.
The minimum ARV is $126,000 for houses and $25,800 for condominiums.
Non-Bermudians must acquire a Residency Certificate to purchase a condominium, which they are not eligible for if they have a work permit. This certificate does not apply for houses.
The effect of these guidelines means that only the highest valued properties are available to Non-Bermudian purchasers.
Houses with a qualifying ARV start at approximately $3,000,000 and condominiums at approximately $500,000.
A Non-Bermudian is permitted to own up to 2 properties.
There are situations where a Non-Bermudian is permitted to purchase a house with more than one assessment number upon application. However, the ARV of just one of the assessment numbers alone must be above the $126,000 minimum.
A Non-Bermudian who purchases a condo is not able to rent it out for short-term or holiday rentals generally unless it is in a specific hotel tourism designated development. For houses, they can rent them out although there are necessary steps that need to be taken to be granted such permission.
Acquisition of Bermuda Property by Permanent Resident Certificate Holders ("PRC")
A PRC is able to purchase any property on the market with some exceptions.
A PRC may not purchase land, a property that is part of a Government Scheme, and may not rent out a property that they own which has two assessment numbers.
A PRC is permitted to own up to 2 properties.
Licensing and Fees
Non-Bermudian purchasers must obtain a license from the Minister of Labour and Home Affairs; their application is made through a local attorney of their choosing. License fees are 8% of the purchase price of a house and 6% for a condominium.
License Fees for Permanent Resident Certificate Holder ("PRC") purchasers are 4% of the property purchase price.
Applicants are required to provide a banker’s reference and personal references (preferably Bermudian if possible).
The license application fee is currently $1,546 (refundable upon license approval).
The license fee for a property within a hotel development is at 6.5%.
Government has approved Non-Bermudian purchasing by application in Trust subject to (a) a locally licensed Trustee, (b) the sale is limited to one generation and (c) after death, the property must be sold within 2 years. Multiple Property Ownership.Generally, a non-Bermudian is permitted to own two residential properties.
Preparing to Purchase a Property
Buying a home is one of the most important decisions you may make and certainly one of the most significant investments of your life. We are pleased to provide these simple tips to help you understand what to expect when purchasing your home:
Financial Planning: Enlist the help of your bank’s financial advisory services to determine your buying capacity. Schedule an appointment with your bank to speak with a mortgage loan officer who will guide you through what you need to submit for your loan pre-approval. Your bank will also assist you in determining additional costs you may not have thought of that are associated with a home purchase – appraisal fees, land taxes, structural survey fees, property insurance, legal fees, services charges, bank (mortgage) finder’s fees, etc.
Choose a Real Estate Agent: You will be working closely with your Agent on your home purchase; you will want to choose an Agent you are comfortable with, who listens to you and helps you define your needs (‘must haves’) versus your wants (‘wish list’). An informed agent will know the market, arrange viewings of suitable properties and may be one of the first to hear of new properties coming onto the market, giving you first opportunity to view. Generally, the seller pays the Agent fee.
Ask Questions: Be an informed purchaser. Check with your Agent about zoning restrictions, rules and regulations and neighbourhood facts.
Know the Government Regulations and Tax Structure: For example, if you are Bermudian or a Bermudian with a non-Bermudian spouse, first-time buyer, and purchasing a property for $750,000 or under, the Government has provided a stamp duty exemption on the conveyance of the property you purchase, which may save you as much as $12,000.
Understand the Process and the Costs: Your Agent will guide you through the process, from Offer and Acceptance to Sales and Purchase Agreement and the documentation required throughout. Costs associated with the conveyance of a property are usually shared equally between the Vendor and the Purchaser. These costs are legal fees for preparation of Conveyance and Stamp Duty payable on the Deed of Transfer. Purchaser is liable to his/her own attorney for costs incurred for legal advice. See next page for more details about costs.
Costs associated with Purchase of Property
Deposit: A deposit of 10% of purchase price is payable upon signing sale and purchase agreements.
Escrow: Deposit is held in escrow by Agent or Attorney until closing. Interest accrued is for the Purchaser’s benefit. Balance is payable when sale completes.
Stamp Duty: Bermuda Government Stamp Duty is calculated on purchase price:
First $100,000 is at 2%
Next $400,000 is at 3%
Next $500,000 is at 4%
Next $500,000 ($1,000,000 but not exceeding $1,500,000) is at 6%
Conveyance Fee: Based on a scale of minimum fees provided by the Bermuda Bar Association and determined by your legal representative.
Mortgage Fees: Base mortgage fees are calculated on purchase price:
First $100,000 is at 1%
$100,000 - $300,000 is at 0.50%
$300,000 - $500,000 is at 0.25%
Over $500,000 is at 0.125%
Additional Costs: These may include an Appraisal fee (from $450 upwards), Pro-rated land taxes at closing; structural survey fee (if the home you are purchasing is a fixer-upper and requires repair/renovation) – price of survey depends of size of property and approximately 1/10th of one percent of the purchase price; property insurance; services charges for utility service installation; moving costs; maintenance fees (condos).
Government has approved Non-Bermudian purchasing by application in Trust subject to (a) locally licensed Trustee, (b) limited to one generation and (c) after death, the property must be sold within 2 years.
“Jack Kripl was an outstanding representative. My husband and myself recently moved into beautiful bermuda and it has been nothing but one pleasant surprise after another. I can highly recommend Mr. Kripl and his team at Coldwell Banker Bermuda.”
- Stacy Allen
“Selling our second home with Jack was just as painless as the first time! There is no better realtor in Bermuda.”