Bermuda: Overview
In Depth
- Overview
- Price History
- Rental Yields
- Taxes and Costs
- Buying Guide
- Landlord and Tenant
- Inheritance
- Living There
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Global Statistics
Regional Statistics
- Sq. M. Prices
- Rental Yields
- Rents
- Price/Rent Ratio
- Buy/Sell Costs
- Rental Income Tax
- Capital Gains Tax
- Landlord & Tenant Law
Buoyant housing market in Bermuda
The residential property market in Bermuda remains strong, despite the global financial crisis.
In 2008, the average price of single family homes was steady at US$950,000, while condominium prices rose slightly – by around 4% - to US$830,000, based on figures from Colwell Banker Bermuda Realty.
Bermuda, a favorite of wealthy overseas buyers, has experienced impressive house price increases in the past years. The average residential property price rose 40% from US$976,000 in 2003, to around US$1.6 million in 2007.
In the upper-end housing market, the value of property sales was US$63 million in 2008, as compared to an annual average of US$40 million over the last 15 years.
The market share of non-Bermudians buying high-end properties rose to 50% in 2008, compared to an average of 25% to 40% share since the early 2000s.
The restrictions on buying property are strict. Non-residents can only purchase residential properties currently owned by non-Bermudians and only within areas approved for foreign ownership. Non-Bermudians are also not allowed to rent their homes without government permission and only for periods of up to a year.
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.
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.
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.
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.
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.
RESIDENTIAL PROPERTY AROUND THE WORLD
Asia & Pacific
Looming housing slump in China
America & Caribbean
The great U.S. housing market crash
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| RESIDENTIAL PROPERTY FACTS | |
| Price (sq.m): $8,132 For a 200 sq. m. property, usually an apartment. | Rental Yield: 4.40% For a 200 sq. m. property, usually an apartment. |
| Rent/month: $5,969 For a 200 sq. m. property. | Income Tax: 0.0 Assumptions: Owners are a non-resident couple drawing US$ / €1,500 per month in rent, with no other local income. |
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Roundtrip Cost:
31.0%
The total cost of buying and then reselling an apartment. Includes: * all transaction taxes and charges: * lawyers' and notaries' fees * agents' fees Assumptions: The buyers are non-resident foreigners. The apartment cost US$250,00 / €250,000. |
Cap Gains Tax: 0.0 Assumptions: The property was bought for US$250,000 / €250,000, and sold 10 years later, after a 100% appreciation. |
| Landlord & Tenant Law: Pro-Landlord Rating is based on a detailed study of each country’s law and practice. | |
JANUARY 2008
- Houses go down in price but condos remain - Bermuda Sun
SEPTEMBER 2006
- Bermuda for Bermudians - IHT
JANUARY 2006
- Cost of Bermuda housing dipped in 2006 - BDA Sun
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