Land Policy Bill Passes In House Of Assembly

July 13, 2012

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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Articles that link to this one:

  1. PLP Asks For Clarity On Land Policy Review | Bernews.com | January 1, 2013
  1. Terry says:

    Paula my dear friend and Premier….
    Call the election.

  2. Shaking the Head says:

    Did the Minister manage to say all that with a straight face and without laughing at the insanity of most of the content? Prior to let’s say 2004, the housing market was not out of control so to try and say it has always been so is scurrilous and misinformation. He refers to fronting but never has anyone actually put any numbers on this practice.
    What was passed in 2007 was a rushed and flawed law that did not achieve what was intended and quite the opposite. The law was ill-advised and had serious unintended consequences.
    There is not the demand now to stimulate the market, and this backflip won’t make any difference.

  3. GoodideaBadidea says:

    If it was intended to be “temporary” are all those who paid for land licenses going to get their money back with interest? Any way you slice it, it was a bad idea to begin with and government just grabbed a pile of cash from people who had been “in compliance” for years.

  4. Mad Dawg says:

    The provisions were “always temporary”?

    There’s re-writing history for you.

    This was one of the stupid ideas that totally screwed up the economy.

    Insane.

  5. Truth is killin' me... says:

    For the ones that did pay for their land licences and who are not going to get a refund. VOTE OBA! The least this Government could do would be to give a credit on their LAND TAXES since the Minister quite jokingly said and I quote “That money was spent a long time ago!”

  6. The Defender says:

    This was done for economic reasons. Families were never given consideration. This license discouraged me from wanting to purchase a house here. My investment is safely away from these shores.

  7. M.P.Mountbatten JP says:

    The bill was beyound stupid to begin with … It would now be very interesting to follow that free cash to see where it benefited the general public .

  8. Reverend Pastor says:

    The most idiotic and damaging thing the PLP ever did. Bunch of loonies all of them! They should hang their heads in shame.

  9. $50,000,000 Revenue for Bermuda says:

    now PLP you are heading in the right direction, next up status for spouses

    increase the manadtory grant of status fee for foreign spouses to $25,000 before you grant Bermuda Status but also reduce the period in line with accepted international practice to 5 years, however increase the number of affidavits and evidence that need to be provided to show tge couple actualli LIVE together and that the n
    foreign spouse has been here for 5 unbroken years, or been posted overseas during that period for a company headquartered here

    do the math PLP $ 25,000 times 2,000 applications = $50,000,000

    PLUS 100 of these 2,000 spouses will be entrepreneurial enough to help stimulate or grow our economy by at least 5%

    PLUS they will bring allntheir external assets and capital here

    PLUS this is the right thing to do since we are moving towards international standards of best practice and governance across the board

    PLUS we see if these spouses want to invest in Bermuda by reducing the debt with heir $25,000 application fee, hell make it $40,000 and raise $80,000,000

    • Couldn't resist it . says:

      PLUS – Make sure they can’t vote .

      The chances of these people being supporters of the PLP govt are very very slim !

      Can’t risk having them shift the balance of powa u know .

    • media says:

      @! $50,000,000 Revenue for Bermuda – Where do you imagine these Bermudian families will find your suggestion of $25,000 – $80,000? In this economy people are just trying to survive. Yes, even the ones with foreign spouses. No, the idea that all these foreign spouses are loaded is simply not the case. For the vast majority they are average people of average means. Sorry to disappoint you.

      • $50,000,000 Revenue for Bermuda says:

        a financial premium should attach to foreign spouses who wish to obtain Bermuda Status, period.

        no cash, then no status should be granted.

        • Sandgrownan says:

          Scum.

        • Sandgrownan says:

          How about the other way round, if you choose to infringe basic human rights, i become exemptbfrom all taxes?

        • Mad Dawg says:

          Reminds me of NAZI Germany.

  10. sandgrownan says:

    Do I get my money back?
    Plus the legal fees?
    Plus the loss of equity I suffered as a result of PLP meddling in the housing market?

    THought not.

  11. swing voter says:

    AND I want my fckin money back!!!! bastids

  12. HeyBye says:

    How can any one have confidence in Bermuda when a government at the whim of a pen, can whipe out your life savings over night. What is in place to prevent future crazy whimsical laws ,being instituted?

  13. The nitty gritty says:

    Here we go again for the second time in a week.
    Chris Famous says in the RG “The Progressive Labour Party is writing a road map for the future while The OBA seeks to erase and rewrite their past.”
    Again, WHO is rewriting their past here?
    Was costly and wrong headed then and still is today.
    See how easy it is to save money when you’re already broke?

  14. Got to go says:

    So to kill an ant (fronting), the PLP decided to use a nuclear bomb (this ridiculous law). Then after the damage had been done they say… oh cha… we didn’t really a bomb to kill an ant…

  15. WellSaid says:

    And Perinchief admitted on tv last night that “the money’s ong been spent”. So fat chance getting your license fees back.

    • Sandgrownan says:

      Yeah, what a suprise there. I hate the PLP.

  16. media says:

    This whole escapade has shown us all how little the PLP know about how the Bermuda economy works. The reversal is a sad reminder that in a very real way they significantly contributed to the slowdown of the real estate market and which affected many many Bermudians from all walks of life. It took them 5 years to finally admit their mistake. My wife being one of the very first to be granted a license, our household felt the effects first hand.

    • Sandgrownan says:

      Exactly.

    • More with less says:

      You said it straight. Talk about discrimination. They could have solved the problem in another way.

  17. Argosy says:

    No devence of this from LaV….must be the weekend. BIU doesn’t do SAT/SUN!!