The Chamber of Commerce has attacked new restrictions on foreigners owning property as unnecessary and damaging.

Two weeks ago Government changed the rules ? non-Bermudians can still buy homes with annual rental values above $126,000 but only from non-Bermudians.

Condominiums can also be bought by non-Bermudians but only from other non-Bermudians.

However in a letter sent to the Home Affairs Ministry, the Executive Committee and members of the Real Estate Division of the Chamber of Commerce attacked the logic behind the move.

Government has cited a sharp decline in revenues from Alien License Fees as probable evidence of an increase in the use of ?fronting? devices by non-Bermudians purchasing property on the Island but the Chamber said this was mistaken. The letter said: ?There has been a continuing increase in the proportion of properties ?available to overseas purchasers? being bought by bona fide Bermudian purchasers.

?In 2004 approximately 70 percent of all sales of ?available? properties (condos and houses) were to Bermudian buyers; this has been an increasing trend since the 1990?s.?

The statement said most of those properties had been sold by non-Bermudians.

?Having been intermediaries in all of these transactions, we know none of these local purchases was funded by a non-Bermudian who went on to become the occupant of the property (the customary end result of a ?fronting? situation).?

The Chamber said the previous UBP Government had years ago eliminated Bermuda as a competing force in the international luxury property market by introducing an Alien License Fee that far exceeded any comparable charges in other countries.

?Non-Bermudian buyers who do not have a prior commitment to being in Bermuda (usually for business-related reasons) choose to go elsewhere upon learning of this fee.

?The majority of non-Bermudian purchasers of property were resident in Bermuda (i.e.: already occupying housing) prior to their purchase.

?These buyers are not newly added to the island?s excess demand for housing; they were/are already a part of it. Only adding to housing stocks or reducing the overall level of demand for housing can effectively address this shortage.

?Mere shifts from ownership to tenancy or the reverse do nothing to alter the imbalance of demand and supply, to increase availability or to reduce prices.?

The Chamber said it backed Government?s policy to ?preserve undeveloped land, commercial property, and the majority of housing stocks for Bermudian ownership?.

But it said the modified policy risked incurring unintended damaging consequences for Permanent Resident Certificate Holders wishing to buy condos and Bermudians wishing to invest in high end real estate.

?The value of Bermudian owned real estate is significantly depreciated whilst the value of non-Bermudian owned real estate has appreciated.

?The policy, in determining that only non-Bermudians can sell to non-Bermudians translates into our Island no longer benefiting from the millions of dollars that could have been injected into our economy by way of the sale of Bermudian owned real estate to foreign buyers.

?These millions of dollars will be redirected to other jurisdictions.

?In so drastically reducing the already limited number of properties available to non-Bermudians, Government is eliminating their opportunity to generate revenue at the highest end of the non-Bermudian market.?

A Home Affairs spokesman said the Minister had received and acknowledged the letter, which it got on Thursday, and was willing to meet with the Chamber in order to address their concerns.