For the first time in Bermuda’s history, Bermudian real estate can now be bought by non-Bermudians. So, you’ve found your dream condo in Bermuda and it’s everything you’ve ever dreamed of. But there are a lot of requirements you have to meet if you’re to be accepted as a buyer.
Don’t worry if you’re not sure what these are, this post will outline everything you need to know and get you one step closer to securing the property you’ve always dreamed of.
Previously, Bermudian residential property was available to purchase by predominantly high net worth overseas buyers due in part to the highly restrictive legislative and policy framework governing the supply of homes and condominiums for sale to these buyers.
Historically entry prices for condominiums in resort communities started at $2m and standalone homes in highly sought after neighborhoods in turn key condition at $5M+.
In order to stimulate activity in the overseas market, the Government has recently amended the legislation concerning the acquisition of real estate by overseas buyers which has resulted in a new product and an increase in supply for overseas buyers.
The new product, condo/hotel residences, provide buyers with a choice to purchase in a community with branded hotel amenities at a much lower entry price. This opens up our exclusive market to the global marketplace.
There are two categories of residential real estate in Bermuda: Real estate that is available only to Bermudians and real estate that also is available to international buyers.
From this simple distinction, it gets more complicated. The following summary of additional requirements, exemptions and exceptions give you an idea of how helpful it can be to have a knowledgeable real estate professional help navigate the process.
To be eligible for purchase by an international buyer, a property's annual rental value (ARV) must exceed a designated amount ($25,800 for a condominium, $126,000 for a house).
International buyers may also buy property in a development designated under the Bermuda Immigration and Protection Amendment Act 2015 as tourist accommodation and hotel residences. Prospective international buyers must submit an application along with a considerable fee.
The cost of a License to Acquire varies depending on the type of property you wish to purchase. Fees are set at the following rates:
- 6% of the purchase price of a condominium
- 8% of the purchase price of a house
What are the Regulations?
First of all, the real estate that a non-Bermudian wants to buy must have a minimum Annual Rental Value (ARV). The ARV of a property is the amount for which the property you want to buy typically rents out.
For a condominium, the ARV is usually above $32,400 and freeholding houses will usually have an ARV of $153,000. It’s worth noting that this isn’t the figure that you’ll necessarily receive for your rent, it’s just an estimate of what you would typically be able to lease the property out for. The price of a condominium that a non-Bermudian would purchase ranges anywhere from $550,000 - $6,000,000.
In order for non-Bermudians to be able to buy Bermuda real estate, they must attain a license to acquire the property from Bermuda Government Ministry of Law and Home Affairs office. The approval process can take anywhere between two and nine months.
Non-Bermudians must purchase from locally licensed trustees, so they can’t buy government sponsored properties directly from the government. Property ownership is limited to one generation and upon death, the property must be sold within a specified time frame. These timeframes vary from firm to firm, so be sure to read all the small print in your contract, should you be successful.
Buying your dream condo is a huge commitment. Massive, in fact. So, it’s imperative that you choose wisely and correctly when it comes to signing on the dotted line.
You’ve got to be certain that it’s the right place for you, it’s the right time, whether you can afford it or not amongst other factors. Here are some great tips on how you can be sure that your new venture is for you.
You Must Visit Before You Buy
You can’t base a decision purely on seeing images on the internet or a brochure, especially when it comes to buying real estate. You need to go and see it for yourself and get a true feel for the place. Take a visit to Bermuda beforehand and explore. Don’t treat this trip as a vacation though, although it’ll be hard not to with the laid-back feel and vibe around the place.
When you’re there, ask yourself whether you can see yourself actually spending a lot of time there or not. You’re obviously going to be drawn to all the “tourist-y” attractions but make sure you check out what morning and evening traffic is like, where your nearest pharmacy, hospital and doctor will be. Not just the local coffee shops, supermarket and the best restaurants and bars in the area.
Meet Your Potential Realtor
On your visit to Bermuda, you should meet your potential realtor. They’ll show you round, take you for dinner, view your potential new property - nothing is too much hassle for them. This is a great chance to ask them about the local area, the condominium you’re looking at and any general questions about Bermuda itself. If you’re unsure about anything, your realtor will be happy to help and should quash any insecurities about your new venture.
Make Sure You’ve Got Everything Covered
As we’ve touched on, buying a condo can be a serious commitment and one that requires a lot of thinking about. You must cover all bases and make sure that everything is in order before you make the move and purchase your dream place.
There are questions that you need to ask yourself and your realtor before you put pen to paper. So, if you think that you’ll miss something out, don’t worry, we’ve got you covered. We’ve put together a checklist that will help you determine whether a condo is the right one for you or not. Download it below today for free and take one step closer to securing the place you’ve always dreamed of.