Overseas Purchasers

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• Real Estate Overview
• Aquiring a Property
• Renting Property

Located some 570 miles east of Cape Hatteras, North Carolina, this tropical paradise is only a 1 ¾ hour flight from New York and 7 hours from London. A British colony with a land area of 21 square miles, Bermuda was first settled in 1609. Well known as an exclusive tourist destination, the island has also established itself as a leading center for international business. This affords Bermuda the ability to have a sophisticated infrastructure, educated workforce, and all the supporting businesses such as restaurants and shops that help give Bermuda one of the highest standards of living in the world.

With a year round mild climate (Bermuda Weather) activities such as golf, swimming, diving and tennis can be enjoyed throughout the year.

Real Estate Overview

Because of Bermuda’s small size, government policy is to preserve the majority of housing stock and undeveloped land for Bermudian ownership. In fact, undeveloped residential land can only be acquired by Bermudians except in a few circumstances.

Commercially non Bermudians are only permitted to own hotel properties of 50 or more beds and up to 40% of a local company or commercial property.

As part of government’s policy on foreign purchase, local houses or condominiums have to qualify by having a minimum A.R.V. of $153,000 for houses and $32,400 for condominiums (A.R.V. = Annual Rental Value which is established by government and used to calculate land tax. It is not an indication of market value). The Bermuda Government has also placed a further restriction in that only non-Bermudian owners of houses and condominiums can sell to other non-Bermudians. Non-Bermudians cannot purchase from Bermudians. This policy is due to expire June 2010.

In addition, condominiums available to foreign purchasers must be in “designated developments” which currently numbers 23. The effect of this policy means that only the highest valued properties are available for non-Bermudian purchasers. At the current market prices, houses with a qualifying A.R.V. start at approximately $4,000,000 and condominiums at approximately $1,000,000. Fractional Developments have become a more popular form of ownership for non-Bermudians with 3 current developments and more on the way. Prices for Fractional ownership tend to vary between $200,000 and $500,000.

Although there is no MLS in Bermuda at the current time, we at Moura & Associates have access to all properties available for sale through co-brokerage agreements with other real estate agencies.

Acquiring a Property

When acquiring a property in Bermuda, foreigners must obtain a license from the Minister of Labour and Home Affairs. This application is made through a local law firm. Applicants are required to provide a banker’s reference and two personal references from whom they have known for at least three years. References from Bermudians are preferred, although not necessary. The application fee for a license is currently $1,271.00 and is refunded when a license is granted. When the license to acquire a property is granted, a “license fee” is paid to government. Presently, these fees are 22% of the purchase price of a house or 15% for a condominium. There is no fee for the purchase of a hotel or commercial property.

Generally, a non-Bermudian will not be permitted to own more than one residential property at any one time. A non- Bermudian will be permitted to purchase a second property on the condition that he/she disposes of the original property within 12 months.

Renting Property

A non- Bermudian wishing to rent their house or condominium must obtain the permission of the Minister of Labour and Home Affairs. These permissions are given for a period of up to one year and can be renewed. A condition of such permission would be that the owner is not in Bermuda during the rental period. A non- Bermudian may rent a house for short term holiday rentals in which case a tax of 7.5% of the rental income is owed to government. Condominiums can only be rented to local residents unless they are located in a resort development where permission has been given for the hotel to lease back units.