Bermuda: Overview

RENTAL YIELDS

Last Updated: Feb 05, 2009

Bermuda’s rental yields moderate

Houses in Bermuda have gross rental yields of 6.39% on average, with two-bedroom houses generating the highest gross rental yields at around 6.63%.

Houses are expensive here, and prices of four bedroom houses averaged around US$3 million. Apartments sell for around US$690,000 for two-bedroom units, and US$910,000 for three-bedroom units, respectively.

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TAXES AND COSTS

Last Updated: Jan 19, 2009

Bermuda's rental income tax is high

Rental Income: Property tax is assessed on the property’s annual rental value and is imposed at progressive rates. Tax rates on residential units start at 1.5% and can go as high as 30%.

Capital Gains: There is no capital gains tax in Bermuda.

Inheritance: There are no inheritance taxes but there are stamp duties for the “Affidavit of Value of Deceased Estate” levied on the net asset’s value and imposed at progressive rates.

Residents: Bermuda residents can buy and rent out property freely.

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BUYING GUIDE

Last Updated: Feb 29, 2008

Buying costs are very high in Bermuda

Roundtrip transaction costs, i.e. the cost of buying and selling property, are around 23% to 34% of the property value. The greatest part of this is the acquisition license, normally paid by the buyer, which is 22% of the house’s value or 15% of the condominium unit’s value. This is payable to the government upon being granted a license to purchase.

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LANDLORD AND TENANT

Last Updated: Feb 05, 2008

Bermuda's pro-landlord rental market

Bermudian rental practice favors landlords, despite the increased coverage of the Rent Control Act.

Rents: Rents and rent increases are freely negotiable under the Landlord and Tenant Act, which applies to all properties except those with an ARV of less than BM$24,600, which are subject to rent control.

Tenant Eviction: If the tenant refuses to vacate the premises after the expiration of the contract or of the notice to terminate the lease agreement, the landlord can apply for a court order to repossess the property and claim compensation. It takes only an average of 50 days to evict a tenant.

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ECONOMIC GROWTH

Last Updated: Aug 30, 2006

De facto Caribbean

While not geographically part of the Caribbean, the British overseas territory of Bermuda (pop. 66,000) has what other Caribbean countries boast of – gorgeous islands (138 of them, with a total area of only 27 sq. mi.), serene beaches, and a thriving offshore sector.

Bermuda uses the Bermudian dollar, which is pegged to the US dollar at a fixed rate. The US dollar can be used interchangeably with the local currency.

Bermuda has enjoyed robust economic growth in the past decade. From 1997 to 2007, average GDP growth was 7.3% per year. Bermuda has one of the highest per capita incomes in the world. GDP per capita was US$91,477 in 2007, 50% higher than the US.

Bermuda's economy is based on offshore financial services for international businesses. It is the 2nd largest captive insurance domicile after the U.S. and the 3rd largest reinsurance centre after London and New York.

Tourism is the island’s second largest industry. There were about 660,000 visitors to Bermuda in 2007, 36% higher from five years earlier. Customs revenues buoy government coffers, as almost everything is imported.