The recent news of pending policy changes to be implemented with the 2013 Budget for Bermuda is designed to assist a broad spectrum of Bermuda’s population with real estate planning.The proposed changes in Alien License Fees payable to Government by International Buyers and Permanent Resident Certificate holders (PRCs) on the purchase price of a property have indeed made people ‘wake-up’ to the possibilities of property ownership again and we have all heard how economists say one of the ways to rev up an economy is to stimulate the real estate market.Bermuda’s real estate market has been stagnant for several fiscal cycles which is reflected most alarmingly in the number of sales in 2012.This figure, in the region of 200 sales (still awaiting final government records) compares to 2008 at the height of the market when over 600 sales were recorded, a shocking 70% decline in market activitySo who do these new license fees affect?They affect all of us as they could potentially mean more investment in Bermuda, an increase in qualified buyers for sellers; and an improved level of consumer confidence in the economy which will increase spending in other areas as well.Specifically, however, PRCs, who in the past were treated the same as any other International purchaser, paying 25% on a stand-alone home and 18% on condominiums to Government on the purchase price — over and above the normal Stamp Duty and Legal fees; will now have more opportunity to explore home ownership.The licensing fee has now been reduced to 4% for the first 18 months and thereafter PRCs will pay 6%.International buyers will also be impacted, having been given an incentive to take a second look at the Bermuda real estate as a worthwhile investment and their License Fees have been reduced from 25% to 8% for a stand-alone home (rising to 12.5% after 18 months) and from 18% to 6% for a condominium (increasing to 8% after 18 months).In spite of these reductions, the level of properties available to PRCs and International buyers has not changed from previous policy.Several years ago, the market was opened up to PRCs who can buy any privately developed condominium without restriction by the ARV.Condominiums developed by Government, are only available to Bermudian buyers.In the stand-alone home market, PRCs can buy where there is a single ARV of $63,600 and above.There are not many of these on the market as you would be surprised at how few houses do not have an apartment. Additionally, PRC are required to purchase for occupancy and not as a rental investment.The International buyer can purchase a stand-alone home with an ARV of $177,000+and a condominium where the ARV is $32,400+ in a designated development.Also, just as a reminder, Bermudians whose homes fall within these ultra-high ARVs can now sell to International Buyers.Many have asked what effect has been felt by these proposed fee adjustments in the real estate community.Well, it is early days yet and the policy has to be passed in the House of Assembly to come into effect which we understand should happen in April 2013.From my personal experience, I have been much busier since the start of the New Year than for many, many months and I have several buyers, local, PRCs and International who are waking up from their hibernation and calling me excited by the prospect of entering the real estate market.Based on the law of supply and demand, more buyers mean more competition for what is available and this could herald the start of an upward trend in the real estate market with property prices increasing.If this does happen, it will not be an overnight transformation and we do not anticipate rapid changes in the market. Many factors affect every real estate purchase and lending practices in Bermuda have changed quite significantly in the past two years.Although the Banks vary slightly, they are requiring between 20 — 25% liquid funds by the buyer.In some cases they will look at equity in other property or family property.The key is stay informed and work with a reputable real estate company who can guide you through the complex process of buying a home.* This week’s column was submitted by Miranda Fountain of Coldwell Banker Bermuda Realty: mfountain@brcl.bm or 247-1811.