Property Fees For Non-Bermudians Lowered
[Updated] In this morning’s [Feb 22] Budget statement, Finance Minister Bob Richards revealed that licence fees for non-Bermudians purchasing property will be lowered in a bid to boost jobs, the construction industry, and customs duties.
License fees will be reduced from 25% to 8% for those purchasing Bermuda homes, lowered from 18% to 6% for purchasing condominiums, and fees will be reduced to 4% for Permanent Resident’s Certificate holders.
Minister Richards said, “This is a jobs programme, pure and simple. The lowering of licence fees as outlined will stimulate much needed inward direct investment into Bermuda. The purchase of a new house, particularly those at the highest echelons as represented here, is frequently accompanied by renovations or customization of some description.
“Local construction companies will be required to carry out such modifications, thereby increasing the demand for labour in that depressed sector. As these customizations will be varied in 16 scale and scope it should create opportunities for construction firms both large and small, thus creating a considerable diffusion of opportunity in the sector.
“Furthermore, the fact that the low licence fees will revert to higher levels after 18 months should have the same psychological effect as the end of a ‘sale’ in retail: it spurs people to act sooner instead of procrastinating,” said Minister Richards.
“Insofar as Government revenues are concerned we anticipate this action to have a positive effect. We estimate that the demand for property is indeed price elastic and the reduction in fees will stimulate a more than proportionate increase in transactions.
“Secondly, there has been no adjustment in stamp duty rates, so revenues from these will increase. Thirdly, if construction activity is stimulated, as we expect, revenues will accrue to Government via payroll taxes for the jobs that will be created. Customs Duties will also rise due to the increased volume of building materials that will have to be imported.
Minister Richards continued: “Lastly, the 25 per cent licence fee has acted as a deterrent for many of our resident non-Bermudian job creators to feel ‘connected’ to Bermuda. Encouraging them to own a home in Bermuda can only be a good thing for Bermudians, as it enhances the connection of their Bermudian employing enterprises to our island. This is a win-win proposition for all concerned.
Speaking on behalf of the Real Estate sector of the Bermuda Chamber of Commerce, Buddy Rego said, “We are delighted that the Government has listened to industry and have seen the natural correlation between reducing the cost of purchasing property and the positive impact it will have in the construction and other related industries.
“When housing starts to move again we can only expect construction to rally, and the economy to strengthen as new home owners purchase furnishings, fittings and other home improvement supplies. Government will also enjoy a significant increase in revenues through additional stamp duty fees.”
Other budget highlights include raising the debt ceiling from $1.45 billion to $2.5 billion, commencing negotiations with the unions about reducing staff compensation, a two year payroll tax break for new Bermudian hiring, a 3% increase in vehicle licence fees, additional funding to increase police manpower and raising the duty on cigarettes & liquor.
View all our coverage of the 2013 Budget here.
Update 3.02pm: Coldwell Banker has been quick off the mark with the new real estate changes, and has sent out this flyer [PDF here] relating to the changes, which was passed on to Bernews.
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smart move bob. hopefully people will hurry and take advantage of this.
Of course they will take advantage of it. That’s why he put it in place, so that Bermuda can be taken advantage of…
you can be forgiven for thinking that. you seem to be failing to understand that the purpose of this decision is to get foreigners to buy property that Bermudians can’t afford but yet needs to be purchased and invest in the country. This decision was made to generate much needed money for government as well as creating jobs for Bermudians which is also much needed. Again they are not advertising the houses Bermudians can afford but rather the ones we can’t afford. This is a very smart move for Bermuda and should be welcomed by all. There is no viable argument against this decision. Its not like they are selling houses in the back of town, and its not like your going to buy a property like golden eye.
not smart cause people just don’t have the money
Demonic, economic charlatans! Nothing but deception, lies and incompetency, covered in a thin veil of sound economic policy! Jokers!
how did you come to that incorrect conclusion?
Idiot.
you got it
OBA, selling out Bermuda to one foreigner at a time.
I can’t wait to vote these clowns out!
again i say its not like you can buy a property like golden eye. might as well encourage someone who can.
Good idea tim. Now all the houses on the market can be swooped up by foreigners. Then the foreigners will rent to Bermudians and all our money now goes out of the country to make other countries and people richer…
again it seems your confused or just refuse to understand. I have no idea how you came to the conclusion that foreigners would come to Bermuda buy these multi million dollar properties and then rent them to Bermudians. If your trying to be a troll I will warn you, you cant stir this pot. There is no flaw in this decision.
He comes to that conclusion because he’s an idiot.
Firstly, foreigners can only buy homes above a certain value. Secondly, foreigners need special permission to be able to rent out their properties. Even exempt companies like XL had to get special permission in order to rent out office space in their building, which is on leased land.
The 2013 Budget states NON-BERMUDIANS are only allowed to purchase single homes over $177,000 ARV and PRC HOLDERS can only purchase single homes over $63,600 ARV.
These homes are not your average Bermudian single family home, so, no, all Bermuda homes are not in this category, since the average Bermudian home’s ARV is lower than both of these figures – check http://www.landvaluation.bm and you can clearly see who benefits in this market. This does not stimulate the average Bermudian home sales currently on the market.
No worries mate, I wont be taking up the offer to pay a tax to buy a house in a place where half the locals hate you.
Pay your own debt down.
There are plenty of other more welcoming jurisdictions to drop a nest egg and spend.
Bye
Way to prove camper vans point….your an idiot who is clearly wearing horse blinders.
Camper van…not all of us hate you. Come back and drop a flex
Where?
….and y r u still here!
The usage of the word plenty is what peeks my interest btw. Now back up your statement. Which i say is full of shit. Plenty lol you are a fool
Have you even been off the island? There are plenty of other more welcoming jurisdictions. Without doing any research Cayman comes to mind, or he could go to Thailand where the people are friendly as ever and basically worship the ground a foreigner walks on. But hey thanks, to you and the others above that display the typical Berrmudian
Have you even been off the island? There are plenty of other more welcoming jurisdictions. Without doing any research Cayman comes to mind, or he could go to Thailand where the people are friendly as ever and basically worship the ground a foreigner walks on. But hey thanks, to you and the others above that display the typical Bermudian sense of entitlement.
can’t wait till their time is up plp all the way
For all the naysayers out there as a matter of interest a recent Non-Bermudian sale completed in the fall and the new owner has demolished the home and will be building a new one in it’s place. This will employ construction workers – plumbers, carpenters, masons, landscapers etc. etc.
So for Lords sake can you not see what this change will do??
Without a massive tax break, they did it? Contradiction in your point of view? Sure is!
the tax break is to encourage more to buy. difficult to understand Im sure
It is apparently difficult for him to understand. I guess that’s why they screwed up the economy so badly.
What about lowering stamp duty for Bermudians? This would surely help the stagnant property market more!
I am 99.9% sure that you will find that by law a non-Bermudian owning a property in Bermuda cannot rent the property out ie generating income/revenue for the owner. And I am sure that there is already in place by law or policy that a property available for purchase by a non-Bermudian/PRC holder must have a certain level of ARV. I don’t see therefore that lowering the licence fee for PRC holders who may wish to purchase a property is a massive threat, in particular to first time, young Bermudian buyers. It just might stimulate the property market, and might generate some much needed revenue for Govt.
When will our new Government announce what they plan to do with Grand Atlantic?
Will they increase the ARV there and offer them to PRC holders, or slash the prices drastically and offer them to Bermudians, or put them on the rental market?
I’m sure the Real Estate agents won’t want the prices slashed, and I’m sure the ARV’s aren’t going to be high enough for PRC holders, so I guess they’ll rent them – reasonable or not?….
The maintenance on that monstrosity will be for ever a burden on the public purse.Without maintenance they will be even more of an eye sore very soon; being exposed to the South Shore elements.
We should just take the hit now,demolish them and create green lands there to beautify the South Shore.
Demolishing them, will remove the excess inventory on the market and stabilize real estate values.
This would help the economy, in the long run.
What’s the hurry? Didn’t Burt boast they had a hundred buyers lined up? I’m sure they’ll turn up soon.
We are moving in the direction of selling Bermuda. Yes not only are we open for business, but it is all for sale! We dont care about the people who were brought here, born and raised here, built Bermuda, because now with international business, we can displace BErmudians, and make it a land of real wealth! Not the peace of mind wealth, but dollar. Sad very sad.
@sameoldthing – did you know that there is a Govt policy of only approx 200 acres of land can be sold to NB. This is to stop the complete selling of Bda?
The ability of selling homes to NB’s and PRC’s will bring more jobs for more people that do not have the required skill set to work in the now near gone IB. (Do you have anyother way we can do this quickly?)
With the creation of more/continued jobs we can bring our broke economy and education system back up to scratch.
Next dumb statement?
More jobs? Mmmmmm there go all the foreigners again….
All part of “THE PLAN”……
Things will happen. This is the beginning of the end. Revolution is upon us.
OBA,OBA,OBA,OBA,OBA ALL THE WAY!
THE TEAM THAT PUTS BERMUDA FIRST.
Now wouldn’t it be a breath of fresh air if all the real estate agents agreed to lower their sales commission for the period the Government is lowering the property fees, that would show real commitment to Bermuda