Government is taking legal advice to find the best way of catching non-Bermudians who are hiding behind trusts to illegally buy property on the Island.

Home Affairs Minister Paula Cox said Government was aware of suspicions that non-Bermudians were using secretive trusts to purchase property with an annual rental value of less than $43,800.

The Immigration and Protection Act 1956 prohibits non-Bermudians from buying homes with an ARV of less than $43,800, which means they can only purchase houses worth around $1 million or more.

Ms Cox told the House of Assembly yesterday that the problem faced by Government was that the law prevents it from looking behind the trusts to find out who are the ultimate beneficiaries.

While recognising that trusts in Bermuda are seen by international businesses as "sacrosanct'', the Attorney General's Office is looking at ways of discovering if non-Bermudians, local law firms and realtors were breaking the rules.

Responding to a question from United Bermuda Party MP Trevor Moniz, who is a lawyer, Ms Cox said any trust which obtained property for non-Bermudians was breaking the law and was liable to prosecution. In addition, the conveyancing would be void in law.

Ms Cox said Government had warned local law firms and realtors that setting up trusts to buy property for non-Bermudians was illegal and that they and the trustees were liable for prosecution. Mr. Moniz asked if the Minister was aware that a "large number of houses'' with an ARV below the mandated level "have been and are continuing to be sold to Bermudian trustees upon trust for non-Bermudians''.

Ms Cox said: "Over the last decade or so, there has been the suspicion that the land policy is being deliberately breached and the Minister is aware that the practice is said to occur, but there is no supporting evidence.

"However, not withstanding the law that the Minister in unable to look behind a trust to determine if any of the beneficiaries are non-Bermudian, in instances where this Government has been the vendor of property for sale to a trust, we have done due diligence and raised enquiries as to the beneficial ownership of the trust to confirm that the land policy is not being breached.'' Ms Cox asked for any information about breaches to be reported to the Ministry, but added that there had been no official investigation into this matter.

Mr. Moniz then asked Ms Cox if she was aware that houses in Bermuda available to foreigners are being sold to Bermudian trustees to avoid payment of a 22 percent licence fee.

The Minister said Government monitored stories in the media. Where it was reported that a non-Bermudian owned property and no application had been received for a licence, the Department would do a check, she added.

Mr. Moniz asked if Government planned to alter the Act or to request that the Director of Public prosecutions begin prosecuting offenders.

Ms Cox reiterated that Government could not look behind trusts to find out the ultimate beneficiaries. She said Bermuda's international businesses recognised that trusts are "sacrosanct''.

HOUSING HSG