Bermuda Considers Opening Property Market to Foreigners

24 November 2011

I remember during the boom, when for a time it seemed like every month would be marked by a new property being opened up to foreign sales, or being opened further, or having legislation relaxed in some way to encourage more foreign buyers. This then was a sign of the times; a sign of just how volumous foreign buyers had become, how many people were buying property in foreign countries.

 

So, now we have news that the government of Bermuda is considering removing the legislation preventing foreigners from buying on the island. This could be a sign that foreign buyers are once again regarded as growing in numbers, or it could simply be that Bermuda sees allowing foreign sales as a way of increasing economic growth. It will certainly be interesting to see, if the legislation is removed, whether the foreigners flood in.

 

Markets that were closed to foreigners and then opened tended to become hot property, because their markets having been closed to foreign speculation had tended to make them more healthy than most markets. This could be considered especially true in the current climate.

 

The British Overseas Territory’s National Security Minister Wayne Perinchief told delegates at the Real Estate Division of the Bermuda Chamber of Commerce last week that: "I support an urgent review of the ARV (Annual Rental Value) bands with a view to permitting the sale of properties by Bermudans to non-Bermudans provided they fall within that highest ARV band."

 

Additionally, Perinchief added that he has also asked the government to drop the requirement for couples including a non-Bermudan spouse to buy a licence before being allowed to purchase property.

 

"I have recommended to Cabinet that the requirment for a licence in these circumstances be removed and that this legal barrier denying home ownership to non-Bermudan members of Bermudian families be eliminated," he said.

 

Whatever the reason for the proposed change in legislation, it is of course being welcomed by the property industry.

 

Speaking exclusively to OPP, Cris Valdes-Dapena, managing director of Bermudan real estate company The Property Group, that removing these rules would be positive for the property industry.

 

"Both these policies had the effect of disadvantaging Bermudian property owners or would-be owners and their removal would be welcome," he said.

 

Valdes-Dapena also told OPP that if the changes are enshrined into law it would "in effect, restore the situation that prevailed here prior to 2005."

 

"It was at this time that, in addition to the ARV limits on sales to non-Bermudians - which will undoubtedly remain in place - Bermudians were prohibited from selling to non-Bermudians."

 

"This meant that Bermudians who owned properties that would otherwise have met the criteria for sale to either Bermudians or non-Bermudians were disadvantaged vis-a-vis non-Bermudian owners of similar property."

 

"The subsequent firming of the policy requiring licences for non-Bermudian members of Bermudian families to own property and the prohibition against such family units owning more than one property has always been contentious because it imposed serious and unfair inequalities on Bermudians who had chosen to marry non-Bermudians."

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