Buying In Bermuda

Every residential property in Bermuda is assigned an ARV for the purpose of calculating the owner’s annual Land Tax – though this ARV is not directly tied to the actual annual rental value of a home in the market at any given time.

All homeowners and long-term tenants are required to pay Land Tax in twice yearly payments. More information can be found on the Bermuda Government website, including the chart of Land Tax percentages for a given ARV.

• A Non-Bermudian purchaser is legally allowed to own up to two properties and is not permitted to acquire undeveloped land.
• Non-Bermudians may purchase freehold houses/states with a minimum qualifying Annual Rental Value (‘ARV’) of $126,000 (which generally equates to a purchase price of $3M and above, but varies by property.
• Non-Bermudians may purchase all residences which are part of tourism developments/hotels, such as Azura Bermuda and Nautilus.
• Acquisition of a property by Non-Bermudians requires a “License to Acquire Property,” which is applied for through the local attorney handling the Sale & Purchase Agreement for the buyer.

This is a package of documents that describe a property and defines purchase price and any other terms and conditions regarding the real estate transaction. In the case of a hotel residence, this includes the “chattels” or (moveable) furnishings.

All ale and purchase agreements with Non-Bermudian purchasers are subject to the purchaser attaining a License to Acquire the specific property from the Bermuda Department of Immigration. The License process is an application which is generally managed through a purchaser’s Bermudian real estate attorney once the Sale & Purchase Agreement is signed. The approval process can take anywhere from two to six months.

• The fee for international purchasers buying a tourism development such as Azura, Nautilus, Tucker’s Point or the St. Regis, the 6.5% hotel residence is waived, provided the purchaser participates in the associated hotel rental program at the minimum requirements.
• Otherwise, the fee for the grant of a license is calculated as 12.5% of the property purchase price for freehold homes.
• Any license fee due, which is always paid by the purchaser, must be received by the government before the license is issued. The license is required before the real estate transaction can complete.
• Applicants are required to provide a banker’s reference and personal references (preferably Bermudian if available).
• For further Information about the Non-Bermudian license process, please contact your nominated Bermuda legal counsel.

A purchaser of a hotel residence pays 100% of the the stamp duty and conveyance fees.

A one off tax imposed by the Bermuda Government on the sale of a property. Stamp Duty is calculated on the property purchase price, based on a sliding scale such as below. Stamp duties are payable 100% by purchasers in transactions in a hotel residence development. Stamp duty rates are subject to change and the latest information can be found on the Bermuda Government website here or confirmed by your local attorney.

• First $100,000 is at 2%
• Next $400,000 is at 3%
• Next $500,000 is at 4%
• Next $500,000 ($1M but not exceeding $1.5M) is at 6%
• Thereafter: 7%

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 paid for by the purchaser in a transaction for a hotel residence.

This fee is set as a standard by the Bermuda Bar Association at the following rates:

Base Fee

• First $250,000…. 1.25%
• $250,000 to $500,000…. 1%
• $500,000 to $1 million….. 0.75%
• $1 million to $2 million…. 0.50%
• Over $2 million Rate Applied….. 0.250%

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.

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. 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.

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.

In both a private home sale and in a tourism development, it is payable by the Seller or Developer.

Similar to law firms and financial institutions in many jurisdictions worldwide, Bermuda real estate brokers and agents are licensed and now regulated under the Bermuda Proceeds of Crime (Anti-Money Laundering and Anti-Terrorist Financing) Regulations 2008.

Prior to a sale and purchase transaction taking place, real estate agencies in Bermuda are required to obtain detailed information on both identity, background and place of residence. You will be asked to provide identity documentation and complete forms should you wish to enter into a Sale & Purchase agreement, similar to those requested by a law firm.