Unique Homes Blog

Bermuda’s size and purchasing restrictions help to make it a highly desirable locale.

Exclusive. It’s a term widely used in luxury real estate, to describe any number of properties or areas. Sometimes it’s a worthy description, while other times, it’s just another empty adjective used to catch a buyer’s eye. In our rapidly shrinking world, few places can be considered truly “exclusive,” but for the buyer in search of a landmark waterfront estate, the island of Bermuda, with its pristine, undeveloped, pink sand beaches, comes pretty close.

Because it is only 21 miles long, Bermuda’s government has taken considerable measures to ensure that the small island maintains its unique culture and identity, which is neither British, Caribbean nor American, but, notably, a sophisticated combination of all three. “[Bermuda] has this blend of British and refined island culture,” says Buddy Rego, President of Rego Sotheby’s International Realty. “We’re sort of British and American all in one.”

The most effective strategy currently in place to protect Bermuda’s sense of self is that non-Bermudians can only purchase property from other non-Bermudians, and only within a certain price range, which “equates to the very top end of our residential market,” says Brian Madeiros, President, Coldwell Banker Bermuda Realty. Non-Bermudians can only purchase houses that have a current Annual Rental Value (ARV, the number used in the calculation of attendant land tax) of $153,000 or higher ($32,400 for condominiums), according to Rego Sotheby’s International Realty’s Web site.

The far-reaching result of Bermuda’s regulations is two-fold—Bermudian properties are available only to ultra-wealthy foreign buyers, and the island’s market is largely self-sufficient. “Should one be looking for an exquisite waterfront estate, prices may range from $15 million to $25 million,” explains Madeiros. Bermuda’s crème de la crème is a 3-acre private waterfront estate fittingly dubbed “Deepwater.” Presented by Rego Sotheby’s, the four-bedroom main home features an elevator and a mini rainforest with an aquarium, and is accompanied by bocce and tennis courts, lavish gardens and a four-bedroom guest and staff cottage.

Unlike the island’s southern neighbors, Rego says, Bermuda’s market supports itself because it does not rely heavily on foreign vacation homebuyers and because lending practices have been fairly conservative, especially in comparison to lending practices in the United States, which have caused what Rego describes as the “mortgage debacle.” Madeiros notes, “On the supply side, there are currently only a dozen homes available to the overseas buyer, which equates to about 2.5 percent of the island’s annual sales transaction rates.”

For the foreign buyer wanting a piece of the island’s exclusivity at a friendlier price, Bermuda is home to three developments offering fractional ownership, says Albert Moura, President of Moura & Associates. At Tucker’s Point Club, both fractional and full ownership opportunities are available—two-bedroom units for $355,000 and three-bedroom residences for $415,000, for a guaranteed five weeks (additional time may be granted if available).

Within the waterfront development, which features a beach, golf course, beach club, tennis club and an on-site hotel with a spa, two-bedroom townhouses start at $3.2 million and four-bedrooms at $4.2 million. Single-level condominiums boasting four bedrooms range from $3.8 million-plus. “These units are located literally right on the water,” says Moura. “If you jump off your balcony, you would land in the water.”

At a Glance:

• The policy of restricting non-Bermudians to purchasing property only from other non-Bermudians is due for review in June 2010. (Buddy Rego, Rego Sotheby’s International Realty)

• A license fee must be paid to the Bermudian government when purchasing property: 25 percent of a single-family home, 18 percent of a condominium and 10 percent of a fractional. (Albert Moura, Moura & Associates)

• For non-Bermudians, single-family homes and condos start at approximately $4 million and $1.2 million, respectively.

(Brian Madeiros, Coldwell Banker Bermuda Realty)

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