Devil in the detail’ on home ownership
Property experts await more information about proposals designed to increase opportunities for home ownership.
Curtis Dickinson, the Minister of Finance, outlined schemes including initiatives to widen access to mortgages and soften ownership rules for select city properties.
Mr Dickinson said during his Budget speech on Friday that the Government will, “in conjunction with private sector banks, pilot a mortgage guarantee programme in return for a reduction in interest rates charged to Bermudians for their mortgages”.
He added: “Secondly, the Government will create a government-backed mortgage lender to relieve pressure on public sector employees by providing them with reduced mortgage rates.
“These two measures, combined with the elimination of taxes on mortgage refinancing, are projected to save $5,300 a year for the average family carrying a $500,000 mortgage.”
Sallyann Smith, a managing director at The Property Group, responded: “Anything is good which helps people achieve their dream home, however, we will have to see what the terms are and how it would operate before we can make further comment.”
Buddy Rego, the president of Rego Sotheby’s International Realty, said: “The government-backed mortgages is fine if you’re a civil servant, I don’t think that that’s necessarily going to change much overall.”
Mr Rego applauded plans to extend a period during which non-Bermudians buying property on the island benefit from a reduction in licence fees.
MPs heard the reprieve will run for an additional 24 months until March 31, 2021, and the Government will use that time to assess how effective the concession is to stimulate property sales.
Mr Rego said: “That’s a very depressed sector of the market — sales of properties to overseas purchasers — so we certainly welcome that.”
He also looked forward to more information about the Government’s plan to soften ownership rules for special developments in the North East Hamilton Empowerment Zone.
Mr Dickinson said the Government announced last year height restrictions for the properties but said “creating an additional supply of condominiums will only work if there is additional demand for the purchasing of these units”.
He explained: “That is the reason why the Government will relax ownership restrictions for these special developments.
“This is an important change, as we must provide places for money earned in Bermuda to stay in Bermuda and circulate in our economy.”
Mr Dickinson highlighted increased opportunities for Bermudian construction workers and said more residents in the area meant more customers for local businesses.
He added: “These new developments will also be key to attracting young Bermudians back to Bermuda, as the units will be ideal for singles or couples without children.”
However, Mr Rego said: “The devil will be in the details.”
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