Secrecy provisions built into Bermuda's trust laws are enabling some non-Bermudians to circumvent rules aimed at preventing them from owning local homes, The Royal Gazette has learned.

The Immigration and Protection Act 1956 states that only Bermudians can own houses with an Annual Rental Value below $43,800 which means that non-Bermudians can only buy houses worth approximately $1m or more.

The purpose of this law is to ensure that less expensive Bermuda properties are available for purchase by Bermudians only. The effect is to decrease the pool of potential buyers which in turn keeps the price of these homes down.

The Royal Gazette spoke to local lawyers to discover how it was possible to circumvent the law.

These enquiries revealed that this is not an altogether uncommon practice and in one way or another, non-Bermudians have been acquiring Bermuda property in contravention of the law for years.

It appears that oftentimes, a trust vehicle is used to purchase the Bermuda property with some arrangement whereby, ultimately, non-Bermudians become beneficiaries of the trust.

One lawyer, who did not wish to be named, explained that the problem is that trusts are by their nature private arrangements and so there is no vetting of an application to form a trust.

It appears that the honesty of lawyers is currently the only method for ensuring that the law is being upheld.

The Royal Gazette has also learned that a few weeks ago, a meeting of the Bermuda Bar Association was called to address these practices and to soundly discourage them.

Comment on the matter was sought from Government representatives. Chief Immigration Officer Martin Brewer declined to comment as did Permanent Secretary for the Ministry of Labour, Home Affairs & Public Safety, John Drinkwater.

The President of the Bermuda Bar Association, Richard Hector, did not return calls from The Royal Gazette and Labour and Home Affairs Minister Paula Cox was off the Island yesterday.

REAL ESTATE RE