Bermuda – Property Letting

How does the letting process work in Bermuda?

Bermuda’s property market is carefully regulated. Whether you are letting a long-term residential unit or a short-term holiday property, the letting process involves understanding which legislative framework applies to your property, obtaining any necessary permissions or certificates, setting a legally compliant rent, drafting a proper tenancy agreement, and managing the property to the required standard.

These laws exist to make sure that landlords offering residential housing units for rent operate fairly with their tenants. Under Bermuda’s legislative framework, the residential housing market is separated into two different markets: properties falling under the remit of the Landlord and Tenant Act 1974, and properties falling under the Rent Increases (Domestic Premises) Control Act 1978. Understanding which category your property falls into is the essential first step before letting begins.

As a tenant, under both Acts, the main responsibility is to pay the landlord the agreed monthly rental payment on time and on a consistent basis. In exchange, a landlord’s main responsibility is to ensure that the tenancy is safe, well-maintained, and habitable. This mutual structure of obligations is similar in principle to residential tenancy law in many other jurisdictions, though Bermuda’s specific rules around rent control and licensing make it distinctive.

Under both Acts, a tenant has the right to exclusive possession and quiet enjoyment of the rented premises. Exclusive possession gives a tenant the right to prevent other people, including the landlord, from entering the premises without their consent. Quiet enjoyment means that a landlord may not visit the property or demand access to it without good reason or without giving the tenant notice in advance.

Using a local letting agent is common in Bermuda, particularly for vacation rentals. Local vacation rental agents advertise Bermuda properties only, specialise in the local market, typically charge 15% commission per rental, and tend to deal with whole houses. For long-term lets, real estate agents and property management companies also assist with tenant searches, referencing, and ongoing management.

Regarding furnishings, stoves, refrigerators, washers, dryers, and often air conditioning units are standard in most rental properties. Bermuda’s rental market typically favours furnished or part-furnished units, particularly for shorter-term lets aimed at workers on fixed-term contracts. Landlords should document the inventory carefully at the start of a tenancy.

What are the rules around rental rates and rent control?

The single most important factor in determining what rules apply to your rental property is its Annual Rental Value (ARV). In Bermuda, Land and Property Taxes include the Annual Rental Value (ARV), a tax based on a portion of property rent or rental value. The ARV figure is determined by the Bermuda Government’s Land Valuation Department and reflects the estimated annual rental income that a property is likely to generate. You can look up any property’s ARV at www.landvaluation.bm.

The Landlord and Tenant Act applies to residential units with an Annual Rental Value above $22,800 and commercial units. The Rent Control Act applies to residential units with an ARV of $22,800 or less, which are called rent-controlled properties. This threshold (as of 2025) is the key dividing line for how much legal protection a tenant receives and how much freedom a landlord has to set rents.

There is a ceiling or maximum rent that can be charged in respect of rent-controlled properties. Known as the “registered rent”, the amount is defined by the Rent Commissioner of the Consumer Affairs Rental Unit, and landlords must formally apply to the Rent Commissioner for permission to increase the rent of a rent-controlled property. This is broadly analogous to rent stabilisation schemes found in some major cities, though with its own Bermuda-specific process.

Lease agreements lasting for three years or less are covered by the Landlord and Tenant Act of 1974. The law allows landlords and tenants to freely negotiate the rent for properties above the rent control threshold. This means that for higher-value properties, landlords can set market rents without seeking prior approval — although any agreed rent must be honoured for the duration of the lease.

A written notice is required before either party can unilaterally terminate the lease agreement. For a yearly rental agreement, a six-month notice is required. Yearly rental agreements cannot be cancelled during the first year. For a monthly rental, a month’s notice is required.

What should a Bermuda tenancy agreement include?

All letting arrangements in Bermuda should be formalised in a written tenancy agreement. Lease agreements specify the duration, rent, terms of renewal, and obligations of both landlord and tenant. A well-drafted agreement helps both parties understand their rights and reduces the risk of disputes.

Key clauses to include in a Bermuda tenancy agreement are:

• The agreed monthly or weekly rent and the date it is due
• The length of the tenancy (fixed term or periodic)
• The amount of any security deposit held and conditions for its return
• Responsibilities for maintenance, repairs, and utilities
• Rules on subletting — common violations include use of the premises other than for private dwelling and subletting of the property without the consent of the landlord
• Notice periods required by either party to end the tenancy
• Any restrictions on pets, smoking, or alterations

Under the Landlord and Tenant Act, a landlord has the right to terminate a lease due to any breach of the rental agreement including failure to pay rent, late payment of rent, mortgagee repossession, antisocial behaviour, damage to the property, or if the premises are unsafe or not habitable. Landlords should ensure the agreement clearly sets out what constitutes a breach.

To begin the process of eviction under the Landlord and Tenant Act, a landlord must first serve a written ‘Notice to Vacate’ on the tenant requesting the tenant to vacate the property on a specified date. Generally, landlords must provide notice of at least one month, subject to the rental agreement.

What are the rules on deposits, maintenance, and furnishings?

The Rent Control Act mandates that security deposits must not exceed two weeks’ worth of rent or $100, whichever is bigger, for rent-controlled units. For properties above the rent control threshold — i.e., those governed by the Landlord and Tenant Act 1974 — the deposit amount is a matter for negotiation between landlord and tenant, though it is standard practice to charge one to two months’ rent.

A landlord has the implied obligation to repair the structure, including the exterior of the house or apartment, while the tenant has the implied obligation not to damage the property and return the property at the end of their tenancy to the landlord in the same condition that they received it at the beginning of their tenancy. Conducting a thorough inventory check-in and check-out report, signed by both parties, is strongly advisable to avoid deposit disputes.

If the landlord fails to make the necessary repairs, the tenant can apply to Magistrate Court to withhold rent until the repairs are done. Once the repairs are completed, the tenant must pay all back rent to the landlord. This means landlords should keep clear records of any maintenance work carried out and respond promptly to repair requests.

Bermuda’s climate places specific demands on properties. Houses in Bermuda collect rainwater via their roofs, which is collected in a cistern or tank. During the drier months, the water supply may need to be supplemented. Building maintenance includes painting exteriors every five years or so, and roofs every two to three years as needed. Landlords should factor these recurring costs into their letting projections and ensure maintenance responsibilities are clearly allocated in the tenancy agreement.

The landlord is almost always responsible for insuring the building and common parts, with the tenant insuring their own contents. The cost of the landlord’s insurance is frequently passed back to the tenants as part of the service charge. Landlords letting vacation properties should also note that a host’s insurance company should be notified that a property is being used for vacation rentals, as this may affect premiums.

For vacation rental hosts, additional safety requirements apply. All hosts are required to have safes and smoke detectors and are inspected by the BTA every two years. Ensuring the property meets these standards before accepting guests is essential to maintaining your certificate and avoiding enforcement action.

Do landlords pay tax on rental income in Bermuda?

Bermuda does not levy income tax, capital gains tax, or inheritance tax, making it a notably tax-efficient environment for property investment. An annual land tax applies, based on the property’s rental value, but there are no income, capital gains, or inheritance taxes.

Land tax is charged to individuals owning land (or renting for a period in excess of three years). Land taxes are payable in twice-yearly instalments and are based on the annual rental value (ARV) of the property at rates from 0.8% of ARV for properties below $11,000 ARV to 55% of ARV for properties over $120,001 ARV (as of 2026). Landlords should verify the current rates with the Government of Bermuda, as these can change. Commercial property taxes (land tax and corporation taxes) are often borne by the tenant — particularly for high-value rentals — or shared equally between landlord and tenant, but this is a matter for negotiation.

For vacation rentals, property owners are subject to a 4.5% vacation rental tax on the rental rate charged to guests. This tax is collected for every rental transaction. The Vacation Rental Fee must be collected and remitted by the property owner or the property manager or agent, unless it is directly remitted to the BTA via the platform the unit is listed on. Currently, only Airbnb is able to directly remit the Vacation Rental Fee to the BTA.

Non-Bermudian owners who have received permission to let their property are also subject to an additional government levy. Non-Bermudians, upon receiving permission from the Bermuda Government, may rent their property for a period of one year. Persons are required to pay 7.25% of the annual rent to the Government (as of latest available figures). Always verify the current rate with the Department of Immigration before letting.

Do you need a licence to let property in Bermuda?

Yes — the type of certificate or permission required depends on what kind of letting you intend to offer and what your ARV is.

In Bermuda, the legislation pertaining to short-term rentals is primarily governed by the Vacation Rental Act 2018. This Act outlines the regulations that property owners must follow when renting out their properties for vacation purposes. Under the Act, property owners are required to obtain a vacation rental certificate before they can legally operate a vacation rental.

All Vacation Rental Units are required by law to be registered, and any vacation rental owner who fails to register their property or remit the 4.5% vacation rental fee to the BTA is liable on conviction to pay a fine. A Vacation Rental Unit means any place, land-based or not, which provides sleeping accommodation for nine or fewer guests for which a charge is made. The duration of a stay must not exceed a six-month period to be considered a Vacation Rental Unit.

Which authority issues your certificate depends on your property’s ARV:

• If your residential property has an annual rental value of US $22,800.00 or lower, you must obtain your licence from Consumer Affairs.
• You must receive a licence from the Bermuda Tourism Authority (BTA) if your annual rental value exceeds US $22,800.00. The BTA has the authority to grant or deny these certificates based on certain criteria, including property standards, health and safety requirements, and local planning regulations.

For long-term residential lets, Bermudian landlords do not need to apply for a specific letting licence, but they must comply with the relevant tenancy legislation. However, non-Bermudian owners face significantly different requirements — see the section below.

If the property is mortgaged, any form of vacation rental may need the lender’s consent. Similarly, if you own a condo, you may require your condo board’s consent to operate a vacation rental, and some condominiums’ rules and regulations may prohibit short-term rentals.

Failure to comply with regulations can lead to legal consequences. The government or regulatory authorities may issue fines, penalties, or even injunctions to individuals or companies operating outside the rules.

How do you apply for a vacation rental certificate in Bermuda?

The application process differs slightly depending on which authority handles your property. The following outlines the standard steps for applying for a Vacation Rental Certificate in Bermuda.

1. Determine your ARV. If the property’s ARV is $22,800 or less, the property falls under Rent Control. You can find out your ARV by going to the Land Valuation website and entering the address of the property or the assessment number. This determines whether your application goes to Consumer Affairs or the BTA.
2. Obtain the correct application form. If your property falls under rent control, you will need to fill out the Consumer Affairs application form to be granted permission from the Minister responsible for rent control to operate as a Vacation Rental Unit. For higher-value properties, applications are made directly to the Bermuda Tourism Authority.
3. Complete the application. Once you have filled out the application form, you can email it to Consumer Affairs at [email protected] or hand in a hard copy at the Department of Consumer Affairs. The Consumer Affairs office is located at 75 Reid Street, Hamilton, in the D.Rego Building on the 3rd floor.
4. Ensure your property meets safety standards. The BTA has the authority to grant or deny these certificates based on certain criteria, including property standards, health and safety requirements, and local planning regulations. Ensure your property has smoke detectors, safes, and any other required safety features before inspection.
5. Pay the annual licensing fee. Property owners are required to pay an annual licensing fee to the BTA for each vacation rental property they operate. The fee structure varies based on the number of bedrooms in the property. Check the current fee schedule with the BTA directly, as fees may be updated annually.
6. Await your certificate. The Ministry will review your application and issue a Vacation Rental Certificate within 21 days, providing your unit meets the standard requirements. Not all units registered will be inspected. However, the Ministry reserves the right to inspect as needed.
7. Collect and remit the vacation rental fee. Once certified, you must collect the 4.5% vacation rental fee from guests and remit it to the BTA. The Vacation Rental Fee must be collected and remitted by the property owner or the property manager or agent, unless it is directly remitted to the BTA via the platform the unit is listed on. Currently only Airbnb is able to directly remit the Vacation Rental Fee to the BTA.

It is worth noting that the legislative framework surrounding vacation rentals in Bermuda is continuously evolving. It is advisable for property owners to stay updated with any changes in regulations or requirements through official government sources or to consult with legal professionals.

What restrictions apply to non-Bermudian property owners who want to let?

Non-Bermudian property owners in Bermuda face considerably more restrictions when it comes to letting than Bermudian owners. These rules are enforced under the Bermuda Immigration and Protection Act 1956 and are administered by the Department of Immigration.

A non-Bermudian who owns a house or a condominium must obtain the permission of the Minister responsible for Immigration in order to let the same. Permission will seldom, if ever, be granted for a period in excess of twelve months in the first instance, and renewal of permission will be considered on its merits at the time. Further, permission will not normally be given if the owner intends to reside in Bermuda during the rental period.

Approval must be received from the Government before looking for a tenant. This is an important distinction from many other jurisdictions where landlords can advertise and find tenants first, and sort documentation afterwards. In Bermuda, you must have government approval in place before marketing your property for rent.

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. This is a significant restriction for non-Bermudian owners who may have purchased a property with the intention of generating short-term letting income — it is generally not permitted unless the property forms part of a hotel or resort development.

Non-Bermudians may be granted permission to rent their property upon application to the Department of Immigration, which is subject to a tax of 7.25%. This tax is applied to rent received and is in addition to the standard land tax obligations that apply to all property owners.

If you hold a Permanent Resident Certificate (PRC), additional rules apply. A PRC holder may not rent out a property that they own which has two assessment numbers. Before purchasing a property with rental intentions, PRC holders should seek legal advice to confirm what letting is permissible.

Given the complexity of these rules, non-Bermudian landlords are strongly advised to consult a local Bermudian attorney and to liaise with the Government of Bermuda before committing to any letting arrangement.

Frequently asked questions

Can I let out my Bermuda property on Airbnb?

In Bermuda, the legislation pertaining to Airbnb and vacation rentals is primarily governed by the Vacation Rental Act 2018. This Act outlines the regulations that property owners must follow when renting out their properties for vacation purposes. Under the Act, property owners are required to obtain a vacation rental certificate before they can legally operate a vacation rental. Non-Bermudian owners face additional restrictions and generally cannot offer short-term holiday lets unless the property is within a designated hotel tourism development.

What is the ARV and why does it matter for landlords?

In Bermuda, the Annual Rental Value (ARV) is a tax based on a portion of property rent or rental value. The ARV figure is determined by the Bermuda Government’s Land Valuation Department and reflects the estimated annual rental income that a property is likely to generate. It determines whether your property falls under the Rent Control Act or the Landlord and Tenant Act, which dictates how much freedom you have to set rents and the level of tenant protection that applies.

How much can I charge in rent for a rent-controlled property?

There is a ceiling or maximum rent that can be charged in respect of rent-controlled properties. Known as the “registered rent”, the amount is defined by the Rent Commissioner of the Consumer Affairs Rental Unit, and landlords must formally apply to the Rent Commissioner for permission to increase the rent of a rent-controlled property. You cannot simply increase the rent without official approval for these lower-ARV units.

How much deposit can I take from a tenant?

The Rent Control Act mandates that security deposits must not exceed two weeks’ worth of rent or $100, whichever is bigger, for rent-controlled units. For properties above the rent control threshold, deposit amounts are negotiable between landlord and tenant, though one to two months’ rent is customary in Bermuda’s rental market.

Who is responsible for maintaining the property — landlord or tenant?

A landlord has the implied obligation to repair the structure, including the exterior of the house or apartment, while the tenant has the implied obligation not to damage the property and return the property at the end of their tenancy to the landlord in the same condition that they received it at the beginning of their tenancy. Maintenance obligations should also be set out explicitly in the tenancy agreement.

Can a tenant withhold rent if repairs are not done?

If the landlord fails to make the necessary repairs, the tenant can apply to Magistrate Court to withhold rent until the repairs are done. Once the repairs are completed, the tenant must pay all back rent to the landlord. Landlords should therefore respond promptly to maintenance issues to avoid this situation.

Is registration for a vacation rental certificate free?

It is free to register a Vacation Rental Unit. However, there is an annual licensing fee payable to the BTA (for properties above the ARV threshold), the amount of which varies based on the number of bedrooms. In addition, all vacation rental hosts must collect and remit a 4.5% vacation rental fee on every booking.

What happens if I let my property without the required certificate or permission?

Failure to comply with regulations can lead to legal consequences. The government or regulatory authorities may issue fines, penalties, or even injunctions to individuals or companies operating outside the rules. For vacation rentals specifically, failure to register or remit the 4.5% fee can result in a criminal conviction and a financial penalty. Non-Bermudian landlords who let without the required immigration permission may also face serious legal consequences.