Buying or Leasing Property in Bermuda
If you are a foreigner dreaming to buy a property in Bermuda, there are few things that you need to know before you jump into this mission. I don’t want to discourage you, but the fact is, there have been many who quickly stepped back and given up on this aspiration once they knew what it takes to actually buy a property in Bermuda.
On the other hand, there are real opportunities, and the Bermuda Government does allow a foreigner to buy a property in the island, under several restrictions though. By the way, even if you get to buy a house in Bermuda and own it permanently, it does not make you eligible to get a citizenship of Bermuda or a permanent residence.
Citizenship will always require a person to be married to a Bermudian and live in the island for a minimum of 10 years before a foreigner can apply for such status. However, getting a long term residence is possible if the Department of Immigration grants exemption to your
work permit. Such exemptions take place in special cases only where the role of a person in Bermuda’s economy or otherwise is considered critical and therefore an exemption to work permit is granted.
So, unless one of the above options works out, you will need to keep departing from the island and come back as a visitor. While you can’t buy a property or a piece of land in Bermuda for the purpose of renting only, the Immigration Department can give permission to rent out your house while you are away. Such permitted rental duration rarely exceeds a period of 1 year and will attract a tax of 7.25%.
But what does it take to buy a house in Bermuda?
Firstly, enormous amount of money, much more than what a local Bermudian would need to pay for a similar property. A nice 3-bedroom house with a lawn and close to the sea can easily cost over 5 million dollars to a non-Bermudian.
Why such huge cost to a foreigner? That’s primarily because of three reasons.
1) Only 5% of top of the line properties are generally made available to foreigners which can not be afforded by the islanders. The Annual Rental Value (ARV) of the property must exceed a minimum limit (which is $32,400 for a condominium and $153,000 for a house). ARV is the annual rent that can be expected out of a property if it is rented out. However, this is a broad guideline and a private property can be rented out at any rate that the market place offers, unless it is under the rent control threshold.
Note that ARV is determined by Bermuda's Department of Land Valuation for every property, and it is re-evaluated every 5 years. For example, July 1st 2014 was a valuation date and it was published in 2015. So, ARV is due to be revalued and published again by December 2020.
2) A foreigner like an American or a British would need to pay a license fee (i.e. a fee for Acquisition License from Bermuda's Ministry of Labor and Home Affairs) which for a house is 22% of the purchase price, and for a condo is 15% (as of 2019).
You can own a house only once the government issues a property license to you. However, there is a separate consideration fee that needs to be submitted along with application for the license. If rejected, this consideration fee would be forfeited (more information below).
Other fees include Stamp Duty which range between 2%-7% (can be paid by buyer/seller depending upon negotiations), legal fees (range between 1% and comes down to up to 0.125%) and Real Estate agent’s fee (5% real estate agent’s commission as per Bermuda Chamber of Commerce recommendation.
3) A foreigner can buy such international property in Bermuda usually from another foreigner only and not from a Bermudian. This is to keep only a fixed or pre-identified set of assets in circulation within foreigners, and there are seldom new properties added to this. Exceptions are accommodations like
Timeshare Properties which is probably the only real solution for regular vacationers in the island. But unlike a full ownership property, in this case you will own a time shared property with others.
Other restrictions/terms include:
Non-residents who are interested in buying condos on the island, can acquire them only in 'special development areas' that have been approved for foreign ownership.
Non-Bermudians are also banned from acquiring undeveloped land. Here however, an exemption is given to Non-Bermudian spouses and children of Bermuda nationals.
You cannot rent out or sub-divide your property unless specific permission is obtained from the Minister of Home Affairs and Public Safety. In other words, you cannot remain on the island once you lease or rent out your house, unless you like to stay in a hotel for a while.
It is necessary for a non-Bermudian to apply for consideration to the Bermuda Government's Minister of Labor and Home through a Bermuda law firm after completion of the scouting and negotiations. The consideration fee is around $1,152 (refunded only if application is successful).
Once the property is negotiated and finalized, there will be a sales agreement signed between the seller and the buyer, and the buyer needs to pay an advance of 10% of the property price.
So, if your heart and financial capacity are large enough to fight out all these, do pursue an ownership property in Bermuda. It would certainly be an effort to shape a fantastic dream into reality, which to many non-Bermudians including me, would likely remain as a far fetched dream.
However, only when a foreigner is living in the island with a long term Work Permit or Permanent Residency Certificate, does it make sense to purchase a residential property outright. Foreigners from outside Bermuda should not attempt to buy residential property in the island, as they won't be allowed automatic residence in Bermuda and renting out such property requires special permission from the ministry.
Another option that you may consider is to acquire a property or a house on lease in Bermuda which is a far easier process than buying one outright. And there can be short term as well as long term leasing arrangements. So, how do you lease or buy a residential property in Bermuda? Best is to take professional help as the property dealing in Bermuda is fairly complex. Check out
Real Estate Agencies who can give you the best professional guidance in dealing with Bermuda Properties.
UPDATE (April 2011): Bermuda Immigration and Protection Regulations Act has been amended and more condos have been added to the list of units that can be purchased by non Bermudians. A total of 500+ condominiums are now available for purchase by foreigners. The units are spread across many top residential areas in the island including The Waterfront at Pembroke, Manor House in Smith’s, Mizzentop at Warwick, Southdown Farm, Warwick Villas, Innwood at Paget, and many other places. Additionally there are some condos at Pink Beach Club/Hidden Cove property, Palmetto Hotel and Cottages, and former Mermaid Beach Club that are also available for sale to foreigners.
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Visitors' Reviews
Shuja Abbas (April 2014)
Hi Raj, Thanks for the detailed information. I am a cardiologist working in Pakistan. I am a Pakistani citizen who is interested to make an investment in real state in Bermuda. Can I do that? If yes then how much is the minimum investment required and after making such investment what will my immigration status become? Thanks your reply will be appreciated.
Raj (bermuda-attractions.com) April 2014
Hi, You can make investment in commercial properties like hotel etc. In order to buy residential property, you need to first start living in Bermuda either on work or with PRC (permanent residency certificate). Foreigners can't rent out residential properties without special permission from the ministry. Buying a property has no relation with your immigration status.
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