Taxation, Fees, and Government Charges
What is taxed and when
Bermuda has no capital gains or inheritance tax, but property transactions attract stamp duty on the transfer deed, calculated on the consideration, with rates that may differ for Bermudian and non-Bermudian purchasers and for residential versus commercial property. Candidates must know who bears stamp duty, the filing and payment deadlines, and the consequences of understating consideration. Other charges include land tax (an annual tax on land ownership), registration fees, and licence fees for brokers. Mortgage deeds may also attract stamp duty.
Traps to watch
Examiners test the difference between the purchaser's liability for stamp duty and the seller's obligations, and whether a nominal or gift transfer still attracts duty. Watch for the trap of assuming that because there is no capital gains tax, no tax arises on a sale - stamp duty, land tax and possibly licence or permission fees still apply. Also check whether a lease attracts duty on the rent or premium.
Rule of thumb
Budget stamp duty on the consideration stated in the deed, and remember land tax is an annual charge on the owner, not a one-off transaction cost.
Worked example
A property transfers for $1,500,000. Stamp duty is calculated on that consideration at the applicable rate for the purchaser's status and the property type; the seller's existing land tax position should be cleared and apportioned at completion.