Minister hints at looser policy on foreign ownership

WEDNESDAY, JULY 20: Bermuda could open up the doors to more foreign ownership of top-end homes, National Security Minister Wayne Perinchief said last night.

Mr Perinchief said: “The thrust of our policy is to try and help the real estate market to find that turnover again – there are a lot of high-value properties on the market. There’s a glut.”

Mr Perinchief was speaking just after a special group set up to look at cutting red tape around foreign ownership of property in Bermuda met for the first time.

The Land Policy Review Working Group is made up of Government officials from the Finance and Environment ministries, the Sustainable Development Unit and Mr Perinchief’s own ministry.

Mr Perinchief said: “Many of these [high-value] properties fall in the high annual rental value area, which Bermudians don’t want to purchase or can’t afford at the moment.

“If these properties are owned by a Bermudian or built by a Bermudian developer, they can’t move.

“If a Bermudian developed a really high end property and they expected to sell to a Bermudian and couldn’t, they can’t then sell it to a foreigner.

“Suppose they have a mortgage on that property and the bank foreclosed – the bank couldn’t sell that property to a foreigner.

Real estate collapse?

“If we’re not careful, we could have a collapse in the real estate industry. That is bad for Bermuda and Bermudians and we don’t want that to happen.”

The working group will consider current policies on land ownership on the island, including restrictions on both permanent resident certificate holders and non-Bermudians.

Mr Perinchief said: “We want to look at strategies with our technical officers and with input from the private sector to get some of this real estate turning over.”

Mr Perinchief said: “We have to protect Bermudians – but that includes making sure the bottom doesn’t fall out of the real estate market.

“We hope the end result will be beneficial to all Bermudians.”

Mr Perinchief pointed out that luxury homes could generate an extra foreign exchange income for the island – vital as Bermuda battles its way out of the global recession.

He said: “To some degree, over time, in the effort to protect Bermudian property and Bermudian interests, we may have hurt our interests by being too protectionist. We have got to open up, to some degree, to globalization while still protecting Bermudians.

“There’s a delicate balance we have to strike, but we need to have fresh capital entering the market. Bermudians purchasing from other Bermudians doesn’t generate any foreign capital and that’s another consideration.

“If these houses are being bought and sold, that creates foreign capital and that’s something we need to recognise.

“It’s not just Bermudians owning a piece of the rock, or two or three pieces – we need to have that fresh money entering the economy.”

Mr Perinchief added that the working group would also examine the purchase of second properties by Bermudians married to non-Bermudians.

He said that, at present, such a couple could buy a property together, but if the non-Bermudian spouse was to contribute to the purchase of another property, a special permit was needed.

Mr Perinchief added: “There are so many policies introduced over time by different Ministers, there are overlapping and sometimes conflicting rules. We need to clear that up so properties and who can buy them are clearly defined.”

Mr Perinchief stressed that discussions were at an early stage and any recommendations from the working group would need to be approved by Cabinet before any changes could be made.

But he said: “I’m very glad this team has started its work and I look forward to the results of their robust discussions.”

Members of the public and other interested parties can make submissions to the working group at: [email protected]