Types of Property Available To International Purcharsers
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:
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:
Types of Property Available to Bermudians
All properties are available to Bermudian purchasers.
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 Policies: Click here to view the PDF
On a case-by-case basis, Government has approved Non-Bermudians purchasing by application in Trust subject to specific requirements including but not limited to (a) locally licensed Trustees, (b) the property ownership is limited to one generation and (c) upon death, the property must be sold within a specified time frame.
Ownership of Multiple Properties
As of June 2015, amendments to the Bermuda Immigration and Protection Act 1956 enable Non-Bermudians to own two 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.
COSTS ASSOCIATED WITH SALE & PURCHASE
A deposit of 10% of purchase price is payable by the purchaser upon signing sale and purchase agreements and held in escrow by the seller’s attorney or agent.
The Seller is responsible for 100% of the Agent’s Commission and 50% of the conveyance fees and stamp duties. The Purchaser is responsible for the other 50% of the conveyance fees and stamp duties.
The Purchaser is responsible for 100% of the Agent’s Commission and 100% of the conveyance fees and stamp duties.
Non-Bermudian and PRC License Fees: Non-Bermudian and PRC purchasers are always
responsible for the Bermuda Government License Fee for restricted persons, regardless if the sale is expressed as gross or net net.
Conveyance (Legal) Fees
These are legal fees directly related to the preparation of the deed of conveyance. They are calculated on a sliding scale set by the Bermuda Bar Association and are normally shared equally by Seller and Purchaser in a ‘gross’ transaction.
Other Legal Fees
Each party is responsible to his/her own attorney and not to the attorney of the other for the cost of any legal services provided in relation to the transaction, such as preparation and/or review of sale and purchase agreement, negotiations and other services.
Bermuda Government Stamp Duties
Calculated on the property purchase price, these are based on a sliding scale set by the Bermuda Government. Stamp duties are shared equally by Seller and Purchaser in a gross transactions.
The Real Estate Division of the Bermuda Chamber of Commerce establishes the guidelines for agent’s commission, which are published in its Real Estate Handbook. Sales commission is standard and calculated as 5% of the property price. In a gross transaction, it is payable by the Seller.
There are various incidental costs incurred by the parties and law firms in preparing and completing the transaction. For example, the seller is normally responsible for the cost of the initial draft of the Sale & Purchase Agreement ( approx. $500). Mortgage fees and other search fees may also apply. In addition, the Seller typically assumes the cost of staking the boundaries; the Purchaser typically assumes the cost of any structural survey.
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