Buying Property in Bermuda for Non-Residents
Download – Royalty Free Stock Imagefrom © Dreamstime.com Bermuda has undergone a lot of development since the beginning of the 20th century. Presently, it is an affluent country with advanced infrastructure and amenities, and it is one of the most important business centers in the Caribbean/Atlantic region. However, all the development did not compromise its natural beauty. Bermuda continues to be an island paradise that boasts some of the most beautiful beaches in the world. As such, it is a preferred relocation destination for many people around the world. If you are planning to relocate to Bermuda or visit it regularly in the future, you may consider the possibility of purchasing a home there. One thing you have to know is that the cost of living and property prices on the island are very high, but it is possible to find affordable properties there. If you can find a home that suits your budget, you also have to consider the rules and regulations that apply to the purchase of property by non-residents. Compared to other countries, Bermuda has very strict property acquisition laws, and you are only allowed to purchase certain private properties. Here is a more detailed description of the property acquisition rules and regulations for non-residents in Bermuda. The laws governing the purchase of property in Bermuda by non-residents were first established in the 1956 Bermuda Immigration and Protection Act. Under this act, the government of Bermuda managed property ownership by foreigners through policies that restricted the number of properties that were available for sale to non-residents. The basic tool that is used for regulating land ownership by foreigners is the Annual Rental Value, or ARV. Every property on the island is assigned an ARV, and the government uses this value to calculate land tax. In the past, only homes that had ARVs that were higher than a certain limit were available for sale to non-residents. On the 8th of February, 2005, the government of Bermuda tightened its laws for property acquisition by non-residents. According to the current laws, non-residents are only allowed to acquire homes that are owned by non-residents, no matter how high are their ARVs. Other than that, the homes must also meet other requirements of Bermuda’s land policies. If you are planning to buy a freehold house, the property must have a current minimum ARV of BD$153,000 per year as determined by the Department of Land Valuation. If you want to purchase a condominium unit, the unit has to have a minimum ARV of BD$32,400 per year. Additionally, the unit must be approved for sale to non-residents by the Department of Immigration. To purchase a property in Bermuda as a non-resident, you have to apply for a property acquisition license at the Minister of Labor, Home Affairs, and Housing. You are required to provide financial and other references to prove to the ministry that you can be a good property owner in the country. Usually, the ministry will take 4 to 6 months to approve your application, and it will charge you a fee when you collect your license. After you are granted a license to acquire a property in Bermuda, you can proceed to acquire the property of your choice. The granting of the license by the Ministry of Labor, Home Affairs, and Housing is a condition that is required for the completion of the sales and purchase agreement. The license fee for the purchase of a freehold property is 25% of the total purchase price, and the fee for purchasing a condominium unit is 18% of the price. Certain restrictions pertaining to the use of property by non-residents are also stated in the license. First of all, the property you purchase can only be used as a private residence by you and your household. Also, you are not allowed to develop or alter the property in such a way that it contains an additional unit that can be considered a residential unit. You must also refrain from sub-dividing your property. If you are planning to rent out your property, you are required to obtain permission from the Ministry of Labor, Home Affairs, and Housing. Usually, you will only be granted permission if you are letting your property to people who are working residents in Bermuda. You are only permitted to rent out your property for a maximum of one year when you are not in the country. Also, you should be aware that letting your property to tourists is not encouraged. In the event that you are given permission to rent your freehold property to visitors, you are required to pay a tax amounting to 5% of your rental income to the Bermuda government. Other than the rules and regulations that are mentioned above, there are also other restrictions and allowances that you should know. Firstly, as a non-resident, you are not allowed to purchase undeveloped land in Bermuda. If you are planning to take mortgage security on a piece of land on the island, you are required to get permission from the Ministry of Finance. As a non-resident, you can only be gifted or inherit a property in the country if you obtain a license from the Ministry of Labor, Home Affairs, and Housing. Also, the ARV of the property must be above the specified limit. If you are married to a Bermudian citizen, you are allowed to own land with your spouse after you have obtained a license. The license fee for acquisition or inheritance of a property by a non-resident spouse is $1335.00. The process of gaining permission to purchase a property in Bermuda can be very complicated. There are a lot of rules and regulations that you have to follow and many procedures that you need to complete. If you wish to buy a property in the country, it is best that you engage the service of a lawyer who is familiar with property acquisition laws in Bermuda. This will ensure that your application for a license and the process of acquisition will be handled in the most efficient and effective manner.
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