Legal Landscape - What type of real estate am I able to buy in Bermuda?

Darren Donnithorne and Stephanie Matthews from Marshall Diel & Myers Limited Property & Estate planning team answer your property related questions and issues in this monthly edition of 'Legal Landscape' with Marshall Diel & Myers Limited.

Question: What is the current position regarding certain classes of Bermudian residents and their ability to purchase real estate in Bermuda? 

In recent years, there have been many amendments to the Bermuda Immigration and Protection Act 1956 (the “Immigration Act”) which have affected who is eligible to purchase Bermuda Real estate and who is required to obtain a land licence to purchase Bermuda Real estate. 

NON-BERMUDIAN PURCHASERS

As a starting point, there are still restrictions in place with respect to the type of real estate available for purchase by a Non-Bermudian Purchaser. Pursuant to the Bermuda Immigration and Protection (Minimum Annual Rental Values) Amendment Regulations 2012, such a purchaser can only purchase freehold property with an Annual Rental Value (ARV) of $177,000.00 or higher. Typically, the fair market value of such a property will start in the region of BD$3 million to BD$3.5 million.  Pursuant to the Bermuda Immigration and Protection (Minimum Annual Rental Values) Amendment Regulations 2007, a Non-Bermudian Purchaser may purchase a condominium with an Annual Rental Value (ARV) of $32,400.00 or higher so long as it is part of a “designated development”.  A list of designated developments is available upon request.

In order to acquire property, a Non-Bermudian Purchaser must first obtain a land licence from the Minister with responsibility for Immigration. The completed application form must be submitted to the Department of Immigration with the required accompanying documentation for processing.  The government fee for processing this application is currently $1,487.00. The processing period can take anywhere from 3 to 8 months and, if approved, a Land-Holding Charge (LHC) will be payable to the Government upon collection of the land licence.  

Since the enactment of the Bermuda Immigration and Protection (Land-Holding Charges) Amendment Regulations 2013, the big change for Non-Bermudian Purchasers has been the reduction of the LHC.  The LHC for a Non-Bermudian has been reduced as follows:

  • -to 8% of the purchase price of a residential freehold property, to be increased to 12.5% on 1 October 2015;
  • -to 6% of the purchase price of a condominium unit, to be increased to 8% on 1 October 2015.

SPOUSES OF BERMUDIANS

Following a welcome amendment to the Immigration Act which came into effect in 2013, a non-Bermudian spouse of a Bermudian is no longer required to obtain a land licence when that couple purchases Bermuda real estate in their joint names.  Further, there is no longer a restriction on the amount of real estate that a couple can purchase where one spouse is Bermudian and the other spouse is non-Bermudian.

Permanent Residents Certificate HOLDERS

The Bermuda Immigration and Protection Amendment Act 2002 enabled certain qualifying individuals to obtain a Permanent Residents Certificate (PRC).  A PRC is not the equivalent of Bermudian status, but it does provide greater security for qualifying individuals, such as the ability to (i) work and reside in Bermuda without a work permit and (ii) buy certain real estate property.

PRC holders are eligible to purchase any condominium (except in a Government sponsored complex) or a house with a single ARV over $63,000.00.  Based upon current property on the market, such a house would likely cost upwards of $1,200,000.00.  

PRC holders are required to obtain a land licence in the same way as non-Bermudians.  The fee for processing the application is the same as for Non-Bermudians, i.e., $1,487.00.  However, the LHC for a PRC holder has been reduced on a similar scale as the LHC reduction for a Non-Bermudian and, for a PRC holder is as follows:

  • -to 4% of the purchase price of a residential freehold property, to be increased to 6% on 1 October 2015;
  • -to 4% of the purchase price of a condominium unit, to be increased to 6% on 1 October 2015.

In addition to the ARV restriction, there are other restrictions for a PRC holder, which include the following:

  • -they cannot subdivide property once purchased;
  • -they cannot purchase property with multiple ARVs; and
  • -they cannot rent the property without ministerial consent.

TOURIST ACCOMMODATION AND HOTEL RESIDENCES

In addition to the above, Non-Bermudian Purchasers can also purchase certain properties designated as either Tourist Accommodation or Hotel Residences.  A further discussion of this will follow in our next article.

If you are interested in purchasing a property and you are either a Non Bermudian Purchaser or a PRC holder, careful attention must be paid to the type of property being purchased and the procedure involved. A knowledgeable and experienced real estate attorney can assist purchasers to successfully navigate the purchase of property in Bermuda.   

This article was written by Darren Donnithorne (Senior Associate & Head of the Property and Estate Planning Team) and Stephanie Matthews (Associate of the Chartered Institute of Legal Executives). 

This column is for general guidance only. It should not be used as a substitute for professional legal advice. Before proceeding with any matters discussed here, persons are advised to consult with a lawyer.

Got Questions? 

If you have any property questions or issues, please contact us at darren.donnithorne@law.bm or stephanie.matthews@law.bm. We would be happy to work with you to help you navigate the legal landscape in Bermuda, and you may even find your question featured on propertyskipper.  We look forward to hearing from you!  

Download the PDF related to this article

Leave A Comment

Please note that Property Skipper will only use the above data to contact you accordingly. By submitting this form, you confirm that you agree to our website terms of use, our privacy policy and consent to cookies being stored on your computer.