Vexed Bermoothes

Buried under the hoopla of the big resort announcements was a little gift to the developers from the Bermuda Government.

In last week’s Official Gazette was a notice of a change in the tax that non-Bermudians must pay when they acquire land in Bermuda.

• The acquisition tax on “normal” houses goes up from 22% to 25% and on “normal” condos goes from 15% to 18%.
• However, the tax on the “fractional condos” and hotel residences at the heart of the SDO flood will drop from 15% to 10% on the initial sale by the developer, but revert to 15% for future resales of the fractions.
• You can assume that these properties will also enjoy hotel concessions relief (which has typically included duty free imports of construction materials as well as lower land, payroll, and occupancy taxes).

The change is retroactive for the Belmont development. (By comparison, Bermudians pay an acquisition tax on a sliding scale equaling about 5%).