The 2008 Budget will have no real impact on Bermuda's property market.

That is the view of Buddy Rego, chairman of the real estate division of the Chamber of Commerce, and president of Rego Sotherby's, who reckons the one-percent increase in stamp duty on properties worth more than $1 million and slightly lower rate for those below $1 million were no great surprise and will not have a big effect on the Island's real estate marketplace.

The Budget also raised licence fees for houses from 22 percent to 25 percent and from 15 percent to 18 percent for condominiums. But the licence fee for first-time sale of fractional units was set at 10 percent, something which encouraged Mr. Rego.

Mr. Rego claimed that, while the stamp duty change may have little effect on the lower end properties, buyers of the more expensive houses could feel the pinch more.

"Really the stamp duty change for those at the lower end of the scale will have a minimal impact," he said. "Especially with the value of property in Bermuda, anything under $1 million needs relief. Certainly it is the right intention as far as that is concerned.

"I think it is getting to the point where the higher values, over $1 million, are significant in any market, but you are not going to get many people sympathising with you if you are buying a house for $2 million, $3 million or $4 million.

"Overall, it is a pinch of pain that you have to take."

Meanwhile, he believes there will be a downturn in the non-Bermudian buying market as a result of the licence fee rise in that sector.

"If the intention is to earn more revenue, I don't think it will have the desired effect," Mr. Rego said. "It is more of a message than it is a practical barrier, as three percent of a $5 million house is a lot of money in anybody's books.

"At 22 percent it was certainly higher than anywhere else in the world market — it just makes it that much more elitist, but will not necessarily turn people off.

"All in all, we are dealing with taxation here and it is unlikely that we are going to get any form of taxation reduction and those who continue to have investment in the upper end of the market are simply going to have to pay more for it."

Another real estate agent, who asked not to be named, concurred with Mr. Rego over the issue of stamp duty.

"Traditionally, stamp duty obviously applies to any real estate transaction and the cost of it is usually built into the financing process, so if you go to a lending institution and make an application to borrow funds to acquire a property, the cost of that stamp duty is built into the finances that you are required to pay back and you can spread that over your 20 or 30 years," the source said.

"My gut feeling is that it will probably not have a serious impact on the Bermuda property market because the lay person cannot quantify on that stamp duty as to what it was when they bought the property, because it was built into the financing of the property. I do not think it will have a big effect on the Bermuda marketplace and I have heard no negative comments about it."

Likewise, they felt that the licence fee increase for non-Bermudians was in line with previous Government policies, while Bermudians continued to make up the lion's share of buyers in the luxury end of the market.

"Our luxury home market in Bermuda is predominantly being driven by our domestic economy and at least 75 percent of those buyers of luxury homes last year were Bermudians, so Bermudians are really driving the market," the agent said.

"The upper end of the market is still very interesting to overseas buyers of luxury homes, but, as a domicile we do not compete well with the islands down south (in the Caribbean).

"The cost of entry to the market from a non-Bermudian point of view is getting too costly, but that has been an evolution of the policy that has been in place for years and the current Government are evolving that policy, so it is more onerous on the global participant."