A Bill reversing the law that required couples of which one is non-Bermudian to buy a land licence passed in the House of Assembly today [July 13], with support from both parties. The law came into effect two years ago, with the land licences cost $1,375.00
In delivering a Ministerial statement on the matter, Minister of National Security Wayne Perinchief said: “Mr. Speaker, the 2007 provisions were always temporary. The Minister said so at the time. The law as written and passed in this House clearly indicated that.”
“In fact, Mr. Speaker, the provisions expired last month,” said the Minister. “With the expiration of those provisions, Bermudians can sell property to non-Bermudians provided the property in question has an ARV of at least $177,000. Regulations to this effect were gazetted and tabled in this House.
“The requirement for married couples, in which one spouse is a non-Bermudian to obtain a license to purchase land in Bermuda has been cast in many lights, most negative. The Bill [PDF] before the House removes this requirement and such couples will no longer require a license to purchase their own home.”
Opposition MPs supported the Bill, with many noting it should never have come into effect in this first place.
Minister Perinchief’s full statement follows below:
Mr. Speaker, few things in Bermuda evoke such strong emotions as land. From the cradle to the grave we seem to devote ourselves to acquiring, maintaining and securing a piece of property. In addition to the educational and employment goals we set for our children, we urge them to get their own “piece of the Rock”. The effect of this cultural norm is to make land a strong influencer in how we live our daily lives.
Therefore Mr. Speaker, it is no surprise that the “third rail” of Bermuda politics can be said to be anything to do with property rights.
In providing an overview of the Bill before the House today, it is necessary to illustrate the circumstances that have led to these provisions now under consideration and those that form part of the related Regulations already tabled in this Honourable House.
Mr. Speaker, there was life before this economic downturn and Honourable Members can cast their minds back to the period prior to 2007 when the real estate market was simply a white hot hive of activity. Without question many people profited from those days and many sectors thrived. However, Mr. Speaker, the quiet challenges created for everyday Bermudians had to be addressed.
Mr. Speaker, this analysis is important because in the economic debate that rages presently, it appears that some in this community believe that the Reagan-era, trickle down economics will solve all of Bermuda’s problems. This is not so and the market conditions remedied by the 2007 amendments to the principal Act make this clear.
Mr. Speaker, permit me to demonstrate through a series of examples just how destructive the market conditions of that time had become.
- Through the practice of “fronting” restricted persons were able to acquire properties that otherwise would not have been available to them
- This meant that they brought their greater access to capital into direct competition with Bermudians who either found themselves priced out of that competition or forced to pay significantly higher prices for basic family homes.
- “Fronting” also reduced the revenues to the Government as lower fees and tax rates applied when acquiring properties via this means.
- With the average family home averaging around $1.2m at that time and a standard industry requirement for a 10% deposit, a young couple looking to buy their first home needed $120,000 just to get in the door.
- And so, what we had was a couple earning say almost $200k between them and who could well afford any mortgage but because of the high cost of property and the standard deposit required, simply couldn’t secure financing.
- Parents, whose homes were either free and clear or close to it, were often pressed into service to guarantee the cash required for the deposit. This set them back economically at a time when they should’ve been looking to retirement and relaxation; and robbed a hard working couple of their dignity as they had to revert to mommy and daddy to get their start.
Mr. Speaker, this is no economy. This is no market state of which to be proud. I t may well be that under another Government; this kind of predatory, unchecked capitalism was dressed up as economic success. It was unfair and left unaddressed would have done a disservice to our people.
Mr. Speaker, in a Statement to this Honourable House when this Bill was tabled, I referred to the Bermuda Immigration and Protection Act as a “blunt instrument”.
So it is; but pending the wholesale review of this area of the law, it is the tool we have now to effect necessary change. Mr. Speaker, at the heart of the 2007 changes to the law and the concurrent policy has always been the protection of the rights of Bermudians.
Mr. Speaker, some have sought to cast these changes as some kind of flip flop. Mr. Speaker, the 2007 provisions were always temporary. The Minister said so at the time. The law as written and passed in this House clearly indicated that.
In fact, Mr. Speaker, the provisions expired last month. With the expiration of those provisions, Bermudians can sell property to non-Bermudians provided the property in question has an ARV of at least $177,000. Regulations to this effect were gazetted and tabled in this House.
Mr. Speaker, it is said, “love is a many splendoured thing…” This is indeed so as many of our citizens have found love in the company of nationals of many distant lands. This is a good thing.
Mr. Speaker, the requirement for married couples, in which one spouse is a non-Bermudian to obtain a license to purchase land in Bermuda has been cast in many lights, most negative.
Mr. Speaker, the Bill before the House removes this requirement and such couples will no longer require a license to purchase their own home. Mr. Speaker, as I said in February when this change was first announced, the depth of feeling expressed on this state of affairs is real.
All of us have been approached or lobbied to change this aspect of the law. The practical consequences for these couples have often been to unduly and adversely affect their ability to purchase a home.
In some cases vendors are reluctant to wait for the license process to run its course to complete the transaction, while in others, complex applications have caused sales to simply not proceed.
Mr. Speaker, the Bill also makes provision for the Minister to issue a Code of Practice setting out the circumstances in which he will approve the holding or acquisition of more than one interest in land by a person who is the spouse of a Bermudian.
Mr. Speaker, this area of the law has so many twists and turns that a definitive guide to the practical application of the law is necessary. In consultation with real estate practitioners in various sectors we will devise a Code that takes account of some of the commercial realties that may attend transactions.
For example, Mr. Speaker, where a couple is buying one house and selling the other, transactions may overlap such that they in fact have interests in both properties at the same time. This should in no way occasion the commission of an offence and such a scenario will be dealt with in the Code of Practice and will be one where the Minister would approve this “holding of more than one interest in land”.
Mr. Speaker, the exercise of considering changes to this area of the law revealed that the historic limits on the amount of property permitted to be owned by non-Bermudians had become obsolete. Some 2,344 acres of land in Bermuda is already owned by non-Bermudians.
The territorial limit had been set for many years at 2000 acres. This Bill increases that limit to 2500 acres to take account of the reality of land ownership now and also to provide for intended hotel developments at Morgan’s Point and Park Hyatt as well as potential sales and development at Tucker’s Point.
With this in mind, Mr. Speaker, the Bill also increases the Parish limits of St. George’s and Southampton to 450 acres, as these developments are located there respectively.
Mr. Speaker, with limits exceeded by the approval of licenses for properly completed land purchases, the Bill also validates those approvals for the avoidance of doubt.
Mr. Speaker, it is important to clearly articulate the position:
1. The Regulations tabled in this Honourable House on 22nd June prescribe that non-Bermudians can purchase only those properties with an ARV of $177,000 and above.
2. This maintains the top 250 properties at any one time available for this kind of purchase.
3. The increases to the territorial limits also before the House today are required to validate land already owned by non-Bermudians and to permit those intended tourist developments the flexibility to market their product for sale to this important market.
4. We have not suddenly made 500 more acres of Bermuda available to non-Bermudians.
Mr. Speaker, the Bill also makes a housekeeping amendment with respect to the Immigration Appeal Tribunal to which I shall refer in more detail in Committee.
Mr. Speaker, this has been challenging exercise. Honourable Members will recall that the Ministry of National Security set up a Land Policy Review Group to consider these issues. Submissions were sought from the public and interested groups in the community. Forty-four (44) submissions were received and several meetings were held. I am grateful to the public, to the Real Estate Division of the Bermuda Chamber of Commerce as well as members of the conveyancing Bar whose input served us well in arriving at today’s Bill.
Mr. Speaker, when taken with the Regulations already now in force, we have achieved a change that will stimulate this important sector of the economy and allow Bermudians to leverage their main asset to their benefit.
Thank you Mr. Speaker.
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