Buying Bermuda, what you need to know….
It is necessary to establish policies that control the types and number of homes eligible for purchase by non-Bermudians in order to preserve an adequate housing supply for the Bermudian purchaser. International Purchasers are able to purchase property in the following categories:
- Freehold Houses and Estates with a minimum qualifying Annual Rental Value (ARV) of $126,000
- Any condominium within a designated Tourism Condominium Development (defined below)
Every single residence in Bermuda is assigned an ARV for the purpose of calculating annual land tax. However, the ARV is not an indication of what the home is able to achieve on the rental market.
PERMANENT RESIDENCY CERTIFICATE (PRC) HOLDERS ARE GIVEN CERTAIN PRIVILEGES AND EXEMPTIONS NOT GIVEN TO NON-BERMUDIANS. THIS STAUS IS USUALLY ACHIEVED BY MARRIAGE TO A BERMUDIAN CITIZEN OR A LONG TERM RESIDENT WHO HAS QUALIFIED UNDER APPLICATION TO THE IMMIGRATION DEPARTMENT
THE FOLLOWING CATEGORIES OF PROPERTY QUALIFY FOR SALE TO PRC HOLDERS.
- Any condominium provided it is not within a Government sponsored low cost housing project
- Any freehold property regardless of its (ARV)
IN 2020 THE BERMUDA GOVERNMENT INTRODUCED THE ECONOMIC INVESTMENT CERTIFICATE & RESIDENTIAL CERTIFICATE PROGRAM (EIC)
- Bermuda welcomes eligible persons to make expressions of interest in the certificate encourages and enables high net worth individuals to make substantial economic investments into Bermuda.
- Investments may be made in one or more investment categories which are defined in the policy statement. Benefits for investors include, residency rights for a period of 5 years after which the grant of a Permanent Residency Certificate.
WE RECOMMEND THAT YOU CONTACT QUALIFIED BERMUDA LEGAL COUNSEL IN ORDER TO GUIDE YOU THROUGH THIS AND ANY PROCESS ASSOCIATED WITH THE YOUR PURCHASE.
Types of Ownership of Bermuda property are:
Properties that are purchased by a non-Bermudians are typically made in the name of an individual or individuals in joint tenancy or as tenants in common.
Bermuda Exempted Companies that meet the established requirements may, at the discretion of the Minister, acquire certain residential and commercial property. We recommend discussing this with your Bermuda Counsel.
The Minister has approved non-Bermudians purchasing by way of a Trust subject to specific requirements. For instance, you must have locally licensed Trustees and the property is only limited to one lifetime and must be sold within a prescribed timeframe after the death of the Settlor of the Trust. Other restrictions to do apply and we recommend discussing this with your Bermuda Legal Counsel.
Non-Bermudians are permitted to own 2 properties simultaneously.
IN ORDER TO PURCHASE REAL ESTATE IN BERMUDA A NON-BERMUDIAN NEEDS A LICENSE TO ACQUIRE PROPERTY
The Department of Immigration requires non-Bermudian purchasers to attain a license to acquire the land and property. Your Bermuda Legal Counsel will assist in this process, however an application must be submitted to the Bermuda Government and approved before the purchase can close with this process taking 60 days or more. In addition to the property price purchasers will incur the additional acquisition tax calculated on the purchase price as follows:
- 12.5% for freehold homes
- 6.5% for tourism condominium developments (such as Tucker’s Point Club, St. Regis, Azura, Newstead and The Loren), Condominiums that are not within a tourism development cannot currently be sold to non-Bermudians.
- 6% for Permanent Resident Certificate holders
Other associated documentation and costs are:
- A bank reference and personal references are also required with the application.
- The license application fee.
- A 10% deposit is required at the time you sign the Sales & Purchase Agreement and will be held in Escrow by your Bermuda Counsel.
- The Vendor is responsible for 100% of the Sales Commission and 50% of the conveyancing (legal) and stamp duty fees (shown below)
- Agents Commission is calculated as 5% of the purchase price for homes. 10% for fractional ownership sales.
- The Vendor is responsible for the cost of having the property surveyed and staked prior to the property sale closing.
- The Purchaser is responsible to pay for any building survey/inspections that have been made a condition of the purchase.
Bermuda Stamp Duty is calculated on the purchase price.
- First $100,000 is at 2.10%
- Next $400,000 is at 3.15%
- Next $500,000 is at 4.20%
- $1,000,000 – $1,500,000 is at 6.30%
- $1,500,000 and Thereafter is at 7.35%
ANTI-MONEY LAUNDERING AND ANTI-TERRORISM FUNDING LAWS
- Bermuda real estate brokers and agents are regulated under the Bermuda Proceeds of Crime (Anti-Money Laundering and Anti-Terrorist Financing) Regulations 2008.
- We are required to obtain Know Your Customer (KYC) information from both buyers and sellers in order to conduct risk assessments. You will be asked to provide certified colored copies of your passport, a current utility bill as proof of residence and completion of a Customer Due Diligence Form.