Government set to change land policy
Cabinet has approved changes to controversial land policies which restricted property rights in Bermuda.
Mixed status couples will no longer have to obtain a licence to buy land provided it is for their first home.
And Government will revert to a policy of allowing Bermudiasn to sell land to non-Bermudians provided the land is above a certain Annual Rental Value.
National Security Minister Wayne Perinchief plans on announcing these changes in the House of Assembly today.
Minister Perinchief's statement will update his colleagues on the work of the Land Policy Review group and reaffirm Government's commitment to protecting the rights of Bermudians.
He will defend Government's intent in bringing anti-fronting laws in 2007 which proved to be controversial and adversely impacted many Bermudians married to non Bermudians, according to an advance copy of the speech provided to
The Royal Gazette.
“Lest Honourable Members forget, Mr. Speaker, the 2007 changes to the law on land policy were implemented against a background of prevalent and illegal “fronting” which used available means to frustrate the laws on foreign-ownership of land in Bermuda,” the Minister is expected to say.
“Mr. Speaker, the rental and housing markets were simply white hot in terms of price and when taken with the earning power of Bermudians and the housing subsidies provided to their expatriate counterparts, a perfect storm of market conditions made the struggle for home ownership too great for our people.”
The speech describes the land policy changes as necessary to stimulate the economy and of benefit to Bermudians.
“We have ended up with a formula for change that will stimulate this important sector of the economy and allow Bermudians to leverage their main asset to their benefit.
“Mr. Speaker, Honourable Members will recall that the results of section 17 of the 2007 Act restricts Bermudians from selling residential property to non-Bermudians. Mr Speaker, I can advise this Honourable House that amendments to that section and others will be made, to permit the sale of land generally to non-Bermudians valued at or above a prescribed ARV threshold.”
Mr Perinchief's speech notes that the historical policy of allowing the top 250 homes to be sold to non-Bermudians will be maintained.
“To achieve this, the ARV threshold will be set at $177,000 which in fact makes 249 properties available. The new threshold will be set as at April 1, 2012,” he will tell his colleagues.
On the law which forces mixed status couples to get a license to buy land, the Minister will recognise that such couples have been hindered in their efforts to buy a home.
“In some cases vendors are reluctant to wait for the licence process to run its course to complete the transaction, while in others, complex applications have caused sales to simply not proceed,” the statement says.
“Cabinet has approved amendments to the relevant legislation to include married couples, where one spouse is a Bermudian, in the list of those persons not requiring a licence for the purchase of property in Bermuda. This is provided the purchase is a first-time family home to be occupied by the purchasers. Subsequent, investment homes will be subject to the licence requirement.”
And the Minister will repeat a call for the private sector to play its part in promoting economic growth by supporting the policy changes.
“To maximise on their economic impact, real estate agents should consider a temporary reduction in the traditional five percent commission. Local lending institutions should reduce the required down payment to further stimulate the market, particularly for first-time purchasers. The legal profession should reduce their conveyancing fees in such circumstances,” the Minister will tell the House of Assembly.
The policy regulating sales of condominiums to Permanent Residents is still under review, the Minister will announce.
“Stimulative prospects of these policy changes for the economy span small construction and contractors engaged to upgrade homes, market activity as some Bermudians sell large homes and downsize, fees to the related private sector parties, repayments of loans and mortgages increasing viable capital for further lending, and additional revenue to the Government.
“The Government is leading by example and stimulating the market, the action will only be fully successful if our private sector parties act with equal conscience.”