News
Exemption of Stamp Duty for First Time Buyers
March 09, 2009
As part of the 2009 Budget, Government announced a major boost for home ownership by ending stamp duty on homes under $750,000 for first-time buyers, effective April 1, 2009
The cuts in stamp duty mean savings of up to $24,000 for those property transactions that fall just below the $750,000 cut-off limit.
The Finance Minister, the Honourable Paula Cox expressed her hope that the stamp duty cut will not only make home-ownership for young families both more achievable and more affordable but would stimulate more renovation work on smaller properties with the expectation of a likely sale.
Ms. Cox said: "This stamp duty concession represents the continuation of tax policy that has been both fair and reasonable to the community at large and to young families and individuals in particular. Following on last year's restructuring of stamp duty in this area, the proposed concession provides a further boost to young persons and other individuals or families seeking to secure their first 'piece of the rock.'
In order to qualify as a first time homeowner the purchaser or purchasers :
- Must be Bermudian
- Have never held an interest in another residential property greater than 25 per cent of its market value. This will ensure that Bermudians who have either inherited or own a minor interest in a property will be eligible for the concession.
- The purchase price must be for the fair market value and must be paid in cash or by way of a mortgage on the property. This will ensure that the transaction is not a sham and also that it is not a “Promissory Note” transaction.
- All of the circumstances affecting the criteria for eligibility for the exemption must be set out in the conveyance itself and the respective parties must sign declarations in order for the transaction to be assessed as exempt by the Tax Commissioner.
- Must declare that they will live in the house or condominium for a period of not less than three years. If the conveyance is relating to a parcel of land, the purchasers must declare that they will complete the construction of the residential unit within a three-year period.
- The parties will also have to declare that the Conveyance is not a part of a larger transaction where the consideration exceeds the required $750,000 threshold.