The Number That Decides Whether You Can Buy a Bermuda Home Isn't the Price

Every overseas buyer who calls about Bermuda has already seen the asking prices. What they haven't seen is the number the government uses to decide whether the property is legally available to them at all. That number is the Annual Rental Value, and the entire island is about to have it rewritten.

The 2026 revaluation, quietly underway inside the Department of Land Valuation, will redraw the map of what a non-Bermudian can and cannot purchase. Buyers negotiating this autumn are transacting against a valuation list built on July 1, 2014 market conditions. The next list will reflect July 1, 2025 conditions and take effect January 1, 2027. A house that qualifies for foreign ownership today may not qualify in fourteen months. A house that has been off-limits for a decade may suddenly become buyable. Understanding that mechanism, and how to price around it, is the entire game.

ARV, Not Price, Gates the Market

For a non-Bermudian, eligibility to purchase a Bermuda home is not a function of what the seller is asking. It is a function of the government's assessed Annual Rental Value, a figure set by the Land Valuation and Tax Act 1967 and used simultaneously to collect land tax, enforce rent control, regulate foreign ownership, and manage vehicle registration.

The current minimums for foreign buyers sit at more than $126,000 ARV for houses and at least $25,800 ARV for condominiums. Those thresholds, in turn, broadly correspond to houses worth about $2.5 million or more and condos worth about $320,000 or more, though actual market prices can vary significantly.

The practical consequence is severe. Much of the lower and middle tiers of the housing market are kept out of reach for overseas buyers. Two homes with identical asking prices can sit on opposite sides of the eligibility line if their ARVs differ, and the sale price a listing broker chooses has no direct bearing on whether the government will license the sale.

Why January 1, 2027 Is a 2026 Decision

Bermuda revalues property on a five-year cycle. The next cycle is happening now.

According to housing sector guidance summarizing the government's schedule, the draft list is scheduled for December 31, 2026, and the new values are due to take effect on January 1, 2027. Owners and occupiers were required to submit rent returns during the assessment window, with the submission deadline extended to March 31, 2026.

For an overseas buyer, three things follow from that timeline.

1. Every ARV on the island is being restated against 2025 market conditions, an eleven-year jump from the 2014 baseline that shaped the current list.
2. Properties currently sitting near the $126,000 house threshold will move. Some will move up and into eligibility. Others will move down and out.
3. A purchase closed under the current valuation list still carries forward under the new ARV once it publishes, which changes annual land tax and, in edge cases, the ability of a future foreign buyer to acquire the same home from you.

Buying blind to that shift is buying without half the pricing information.

The Friction Stack

Once eligibility is confirmed, the transaction itself carries costs and delays that materially change what a stated purchase price actually represents.

• Licence fees. The Alien Landholding Licence is priced as a percentage of the purchase, structured at 12.5% for houses and 8% for condominiums. On a $3M house, that is a $375,000 government charge separate from stamp duty and legal fees.
• Approval timeline. Sophisticated buyers should account for a 6 to 9-month government approval window when planning their capital exit and relocation. Renovation contracts, moving logistics, and school enrollments should not be sequenced against an assumed close date.
• Deposit. A deposit of 10% of purchase price is payable upon signing sale and purchase agreements, held while the licence works through Cabinet.
• Land tax. The tax is calculated on ARV in marginal bands, similar in shape to an income tax. The bands are marginal, like income tax brackets, meaning you do not pay the top rate on the full ARV, only on the slice that falls within each band, and the government announced a reduction in the residential base rate effective January 1, 2026. The PwC summary of Bermuda taxes is a useful reference for the current schedule.
• Rental property fee. Effective September 1, 2023, Bermuda imposes an annual rental property fee between 1,500 and 2,500 Bermudian dollars based on the ARV of the property.
• Ownership cap. A non-Bermudian is permitted to own up to two properties, and cannot acquire vacant land, which forecloses the build-your-own strategy that works in several competing Caribbean jurisdictions.

Stacking those costs onto a headline price is the difference between a real budget and a marketing budget.

Three Traps That Catch Overseas Buyers

The subdivided-assessment estate

Some Bermuda estates that photograph as a single property are, on paper, two assessment numbers. A non-Bermudian may be permitted to purchase a house with more than one assessment number upon application; however, the ARV of one of the assessment numbers alone must be above the $126,000 minimum. An estate whose ARV totals $150,000 across two units of $80,000 and $70,000 is not a foreign-eligible purchase, whatever the asking price says. This is the single most common surprise in early offers.

The short-term rental prohibition

Buyers who plan to defray carrying costs with holiday rentals need to read the rules before they read the listings. Non-Bermudians who purchase property are not able to rent it out for short-term or holiday rentals unless it is in a specific hotel tourism designated development, and may be granted permission to rent their property upon application to the Department of Immigration subject to a tax of 7.25%. The income model that works in the Bahamas or St. Barts does not work here without a designated project.

The condominium residency wrinkle

Non-Bermudians must acquire a Residency Certificate to purchase a condominium, and they are not eligible for one if they hold a work permit; that certificate does not apply for houses. Executives relocating on work permits are frequently pointed toward condominium inventory by default and only later discover the pathway is closed to them.

What This Means Between Now and Year-End

The window between today and the publication of the 2026 draft list is a strategically distinct one. Two questions belong in every serious conversation.

Is the ARV comfortable, or on the cusp? A house at $128,000 ARV is technically eligible, but a single revaluation adjustment downward could disqualify a future resale to another non-Bermudian and reduce the buyer pool at exit. The comfortable positions sit well above the threshold, not just past it.

How was the 2014 ARV built, and what has changed on the ground since? A property that has been meaningfully upgraded in the last decade is likely to see a substantial ARV increase in the new list. That raises annual land tax under the marginal band structure and, at the top of the schedule, the marginal rate on the highest slice is not modest. For historical context, the tax amount is based on ARV in six bands, with the lowest band up to $11,000 ARV taxed at 0.8%, and the highest band, above $120,000 ARV, taxed at 47%. The Bermuda government land tax page publishes the current schedule.

For buyers who intend to hold for a decade or more, this revaluation cycle is a one-time chance to underwrite the property against fresh public data rather than an eleven-year-old assessment. For buyers who plan to be in and out inside five years, it introduces resale risk that deserves a discount at entry.

There is also an upside path worth naming. High-value investments exceeding $2.5M may unlock the Economic Investment Residential Certificate for long-term residency, which pairs naturally with the freehold house tier where most foreign transactions concentrate.

FAQ

Does the sale price affect eligibility, or only the ARV? Only the ARV. A house priced at $4 million with an ARV below $126,000 is not available to a non-Bermudian. A house priced at $2.6 million with an ARV of $130,000 is. The two figures are set by different processes and only loosely track one another.

Can I check a property's ARV before I make an offer? Yes. The Department of Land Valuation maintains a public register. Your attorney and advisor will confirm the current assessment number and ARV as part of pre-offer diligence.

If the 2026 revaluation lowers my ARV below the threshold after I buy, do I lose the home? No. Existing ownership is not disturbed. What changes is the pool of eligible buyers on your eventual sale, which is a resale liquidity question rather than a title question.

Are there any circumstances where a foreign buyer can hold vacant land? Not under current policy. Non-Bermudians cannot acquire vacant land, and the two-property limit applies to developed holdings.

Bermuda rewards buyers who read the mechanism before they read the listings. If you are weighing a purchase against the 2026 revaluation calendar, or trying to understand whether a specific property clears the thresholds that matter, Peter Kempf International provides discreet, advisory-first guidance across the cross-border details that shape a transaction of this scale. Request private access to listings and begin the conversation.