In the market for a single family home? Demand for these units and their prices remains high due to both a lack of available stock and to the fact that interest rates are at a 30-year low for first-time buyers.

In 2005, the average selling price for a single family home in Bermuda is over $1 million whether you're building or buying an existing property. An August 2004 Market Update published by Coldwell Banker calculated the cost of building an 1,825 square foot home in Devonshire at $1,206,250: $650,000 (.4 acre lot) + $456,250 (construction at $250 psf) + $100,000 (swimming pool and landscaping) = $1,206,250. This price is actually a bit low as the $250 psf building price would not include fixtures and fittings, which add considerably to the tally.

Condominiums offer buyers more carefree home ownership and are growing in popularity. In 2004 both the numbers of condos sold and the average sale price jumped. Condos in Bermuda are usually owned by means of a 999 year lease with the freehold being owned by the condominium association.

If you need assistance with buying, selling or maintaining real estate in Bermuda, check the Real Estate Agents heading in the Yellow Pages® of this directory.

LAND TAX AND ARV
Information on land tax, including a rate chart, can be found on the Bermuda government’s website: www.landvaluation.bm.

The rate of land tax in Bermuda is based on a property’s Annual Rental Value or ARV. At the time it is established, the ARV represents the approximate annual rental value of the property if let unfurnished on the open market. This means that the normal market forces of supply and demand are to be taken into account and special circumstances are excluded or compensated for such as old leases, lettings subject to rent control, to sitting tenants or to relatives and friends. As part of the process, each property is assumed to be in good repair having regard to its age, character and the locality in which it is situated. Basically, it is an estimate of the rental value of all properties (whether rented or owner-occupied).

ARV’s also play a significant role in Bermuda’s transportation sector as home owners may only register one car per valuation unit or ARV number.

Annual Rental Values are re-evaluated every five years. The last evaluation took place in 2004 which means the next should occur in 2009.

RENT CONTROL
The Rent Commission comes under the authority of the Minister of Health and Family Services and is charged with the responsibility for administrating the Rent Increases (Domestic Premises) Control Act 1978. The provisions of the Act apply to a tenancy of any residential dwelling where such dwelling has an ARV of $16,200 or less. There is no rent control for properties with an ARV of more than $16,200. Rather these rents are the result of supply and demand.

NEW POLICY IN 2005
In February 2005 Government introduced the Amendments to the Acquisition of Residential Property by Non-Bermudians Policy. Previously any home with an ARV of $126,000 or higher, or a condominium located in the designated Condominium Developments would be available for purchase by a Bermudian or Overseas Purchaser. As of February 8, 2005, a house with an ARV of $126,000 or higher or a Condo located in the designated Condominium Development can only be sold to an Overseas Purchaser if owned by an Overseas Purchaser. A Bermudian owner cannot sell to an Overseas Purchaser. This new policy immediately impacts Bermudian owners of houses with an ARV of $126,000 or higher and all Bermudian owners of condominiums in the designated Condominium Developments as it dramatically reduces the pool of prospective buyers. The impact of the policy on the overall industry will be determined over time.