Ease mixed status buying rules to revive housing market

This is where one spouse is Bermudian and the other not.

It would help the local real estate market quite a bit if it were easier for MSMCs to purchase here.

From a eugenic viewpoint, it is a good thing that we have gene diversity.

Foreign spouses not only bring different genes but different ideas and in some cases they bring wealth.

To create bureaucratic impediments for a young MSMC purchasing Bermuda property is counterproductive on so many levels.

Apart from alienating the non-Bermudian spouse, the time taken for the alien licence process often aggravates and hurts ‘motivated sellers’, a kindly epithet for someone who has to sell their property because they cannot afford to keep it.

Immigration should streamline the licencing process for non-Bermudian spouses applying to co-own property with their Bermuda spouse.

Licence

If a non-Bermudian spouse has a spousal letter, and most do, he or she has already been cleared by Immigration to have a job exempt from work permit requirements.

It makes sense to extend this to the acquisition of a joint interest in land with a Bermudian spouse.

Obviously there must still be a licence application but perhaps the procedure could be shortened dramatically if a spousal letter was already on file for the applicant, such that the need to vet the foreign spousal applicant in the tedious way done now is eradicated.

It is time to make it simpler for foreign spouses and give a boost to the real estate market all in one go.

Let the spousal letter be all you need to qualify for a licence.

Experience has shown that these protracted spousal licence applications for MSMCs has prejudiced them and a number of Bermudians who had to sell because they could not afford to hold on to their properties.

The delay meant they had to spend more in interest carrying costs on their mortgages whilst awaiting the approval of the licence process. 

Another thing that could help bolster movement in real estate involves aging home owners who may be property rich but cash poor.

Where such individuals are without natural heirs and not interested in leaving property to anyone in particular, it may behove them to sell a remainder interest in their home to a younger couple who do not mind waiting before living in the home and who can rent in the meantime.

This strategy is somewhat akin to the idea of reverse mortgages popular in some jurisdictions.

Reverse mortgages are usually regulated so that the elderly are not taken advantage of and this same consideration arises when entering into the sale of a remainder interest.

The process has worked well in Bermuda but integral to its proper operation is for all parties to have legal representation.

Selling a remainder interest guarantees that the buyer will inherit the property on the death of the life tenant/owner. Until death, the life tenant/owner is legally entitled to use the house as their own.

Special consideration has to be given to maintenance issues where the aging life tenant may be unlikely to carry out repairs.

When considering something like this, consult an estate planning and property professional to ensure that the process does not have any unintended tax consequences on the participant’s estate planning.

The price for the acquisition of a remainder interest is usually arrived at by some actuarial computation involving the current value of the house and the life expectancy of the seller.

The success of any strategy when selling or buying a home depends on the individuals involved.

Decisions by lenders are affected to an extent by the  level of optimism in the economy, as that affects their view of how likely they are to be repaid.

The spring and summer season usually brings with it a renewed sense of confidence and if that trend prevails, one can expect to see an increase in real estate activity.