ESSENTIALS RELEVANT TO THE PURCHASE OF ISLAND PROPERTIES

PERHAPS you got the idea while you were in Bermuda on your honeymoon, for a vacation, or an anniversary. And the idea is, all in one breath: Why don’t we get a place in Bermuda so we can go there any time we want to?

As with anywhere else, you need to have the funds with which to purchase a house or condominium. The minimum price of a condominium that qualifies for purchase by a Non-Bermudian is around $700,000 and in the case of a house and its grounds, the base price is around $2,000,000.00.It is far easier to purchase a condominium that qualifies than it is to purchase a house, because there are more condominiums that qualify than there are houses. Qualification in general is arrived at by means of an evaluation and assessment for Land Tax purposes, which results in the designation of an Annual Rental Value status for each Island dwelling.

There are two categories of Non- Bermudians. Permanent Resident Certificate Holders(PRC) and Other Non-Bermudians. If you are a PRC Holder then this restriction is in force on houses with a minimum ARV of $63,600. In the case of those qualifying for purchase as Non Bermudians, the ARV on a condominium must be $32,400 or more, and for a house the ARV must be $153,000 or more.

Prospective purchasers are required to make application through a local legal firm to the Bermuda Government for permission to purchase any property. This application is to be supported by personal and bank references and it takes between four and six months for a License to Acquire to be issued. Before a license is issued, the Government requires that 15% of the Purchase Price be paid for a License to Acquire, in the case of a condominium; and 22% in the case of a house and its grounds.

When any agreement in principle between purchaser and vendor has been made, the purchaser then pays a 10% deposit to the agent to be held in escrow, subject to contract, which deposit becomes part of the purchase price. Legal expenses for conveyance of a property are usually shared equally between purchaser and vendor, while financing is usually done through one of Bermuda’s banks, and must be in external funds. Mortgages are available in US$ funds at a rate of 2% over LIBOR US$.