BERMUDA Law and Practice Contributed by: E Scott Swainson, Katrina Dickson and Erik Gotfredsen, Wakefield Quin Limited
Gifts Stamp duty on transfers of land by way of gift (inter vivos) to individuals is payable at the rates noted above. Voluntary transfers to trusts attract stamp duty at the following higher (death) rates: • where the property is the first addition to trust, the first USD50,000 attracts nil stamp duty; • 5.25% on the next USD150,000; • 10.5% on the next USD800,000; and • 15.75% thereafter. Grant of a New Lease Stamp duty is payable at a rate of 1.05% of the aggregate rent for the first three years and 0.5% on the aggregate rent for any additional period. Stamp duty is typically split between landlord and tenant. Mortgages Stamp duty is habitually payable by the borrower at the following rates: • 0.25% where the sum secured is USD400,000 or less; and • 0.5% where the sum secured is more than USD400,000. Exemptions There are stamp duty exemptions for Bermudian first-time home buyers (provided certain criteria are met), up to the first USD1 million of consid - eration. Corporate Structures Sales of shares in local land holding companies attract duty at conveyance rates but acquisitions by merger or amalgamation attract only nominal duty.
cessions for many projects. Such concessions may include a waiver of duty on construction materials, the suspension of land tax and hotel occupancy tax, and a 0% licence fee where non- Bermudian purchasers commit to put a portion of their unit into hotel inventory. Applications to develop resort properties are sympathetically received. 2.9 Condemnation, Expropriation or The government is empowered to compulsorily purchase land pursuant to the Acquisition of Land Act 1970. However, the exercise of such power is rare, typically only being utilised where land is required to improve road safety. Even where there is demonstrable public benefit, most acquisitions are consensual. Remedies Rights of compensation and appeal apply. The Bermuda Constitution expressly protects real property rights. 2.10 Taxes Applicable to a Transaction Transfer Taxes Compulsory Purchase Compulsory Purchase Stamp duty is payable on the vast majority of transactions. Ad valorem duty is payable on a sliding scale on land purchases and gifts. Conveyances Stamp duty (effectively a document tax) is pay - able on transfers of land for valuable consid - eration at the following rates and typically split
between the buyer and seller: • 2.1% on the first USD100,000; • 3.15% on the next USD400,000; • 4.2% on the next USD500,000; • 6.3% on the next USD500,000; and • 7.35% thereafter.
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