Business leaders say a new law which prevents Bermudians with foreign spouses from owning a second home will only hamper commerce and industry on the Island.

Philip Barnett, president of the Chamber of Commerce, spoke out yesterday against the Bermuda Immigration and Protection Amendment Act 2007, saying it was both confusing and discriminatory.

In a statement, he said: "A large majority of our members who work in the industry have voiced their concern regarding the Bermuda Immigration and Protection Act Amendment.It is their belief that the Act is both discriminatory and unclear and does not address the real issue for which it was originally intended."

The Act was introduced to combat 'fronting' ¿ a practice whereby foreigners have obtained property illegally by using a local resident as a 'front'.

Labour and Immigration Minister Derrick Burgess says the new law is needed to protect local residents on an island where land and housing are in short supply. He has pointed out that 37 percent of residential land is now owned by non-Bermudians.Under the Act, Bermudians with expatriate husbands and wives will not be able to buy a property without a licence. This can take up to six months. The couple will also be barred from purchasing a second property together until ten years of marriage - when the spouse acquires 'Bermudian' status. Penalties for infringement include fines and even imprisonment. Couples who already own another property, such as to rent out, will be breaking the law from June 2010.

Mr. Barnett yesterday claimed the Act was not only discriminatory, but took away rights which Government had earlier granted to Permanent Resident Certificate (PRC) holders.

He said: "Based on strict interpretation of the Act, Bermudians might be surprised at the Government's definition of a Bermudian family. "If you believe you are a 'Bermudian' family (by contributing to the tax base, educating your Bermudian children and fully investing in Bermuda as your home country of domicile), the Act strictly interprets this not to be the case if your spouse is not Bermudian."You do not have the same rights as a 'Bermudian' family comprising of two Bermudian spouses."Therefore the question requires asking 'What is a Bermudian family' and why are only some being disenfranchised?

Mr. Barnett said: "We don't believe this Government has seriously considered the implications of this Act, and that the real stakeholders were not properly consulted. It may ultimately prevent more rental properties from entering the market, which negatively affects the average Bermudian and does not support the growing economy where more housing is needed for foreigners.

"The Chamber of Commerce is now calling for the Policy guidance notes as "a matter of urgency" in order to "dispel some of the members' concerns and allow them to conduct their businesses within the confines of the law".

Mr. Barnett said since the Act became law in June, the lack of "clear instruction" over how it affects residents is causing a slowdown in real estate and mortgage lending."No one wishes to cause an infraction of the law so business is halted," he said. "It is our understanding that the Policy, which translates the Act into layman terms, should have been released to the public by now, yet we are three months into it and nothing."

The Chamber of Commerce is also questioning the figure of 37 percent of land owned by non-Bermudians: "Have we reached a saturation point of ownership by non-Bermudians and are the records that speak to this accurate? The statistics, which were recently made public, did not clearly state whether properties that were owned by both a Bermudian and non-Bermudian were included in the non-Bermudian ownership count," said Mr. Barnett.

Last night, Ronnie Viera, who has formed a protest group against the new law, said it not only discriminated against foreign spouse couples but had far-reaching consequences for Bermudians themselves. He said the confusion over the Act was leading banks to refuse mortgages and bidding wars to erupt over property, resulting in higher prices for all Bermudians.

Mr. Viera, who is married to a non-Bermudian, said: "We have heard an example where the seller took advantage of the Act and charged a Bermudian couple more money for the property. He started a bidding war between them and a couple with a non-Bermudian, telling them the other couple were willing to pay more."The fact that the guidelines have not been published is causing confusion," said Mr. Viera. "When banks are finding out the spouse is non-Bermudian they are taking a different position. They are misinterpreting the Act, and we have heard of cases where they have declined to provide a mortgage loan."

Mr. Viera says his group now aims to meet with Mr. Burgess to "discuss the impact which this Act is having on the average Bermudian". "By being married to non-Bermudians, we are being treated differently and are not seen as equal to our fellow Bermudians," he said. "It is unrealistic to say a non-Bermudian can just go out on their own and buy a house, when you consider property prices on this Island and the nature of modern marriage."

Shadow Labour and Immigration Minister Trevor Moniz said: "I had hoped the guidance notes (on the Act) were being prepared but none have been forthcoming.

The United Bermuda Party are of the view that Government would be advised to allow Bermudians with non-Bermudian spouses to buy property and not attempt to restrict them. We feel this policy is misguided."