Government looks at penalties and incentives for vacant properties
Abandoned buildings are being examined with a view to tackle the critical shortage of housing on the island.
The Government is considering introducing incentives and penalties to encourage owners to put empty properties back on the market.
It is looking at legislative amendments, as touched upon in the Throne Speech, to revitalise the housing market, which remains a top priority.
Quinell Francis, the Mayor of St George, told The Royal Gazette that vacant properties were a longstanding headache for the Olde Towne.
The Corporation of St George will highlight the issue during upcoming meetings with the Government, including with the newly formed Ministry of Housing and Municipalities.
A government spokesman said: “These legislative reviews are part of a broader effort to encourage property utilisation, expand housing availability and support economic development.
“That said, taxation alone may not be the most effective solution. Vacant buildings are often empty because their owners lack the financial means to carry out necessary renovations.
He added: “Simply increasing the tax burden could make revitalisation even more challenging. Instead, the Government believes a holistic and creative approach is required, one that carefully balances penalties and incentives in a way that is fair, equitable and effective in stimulating economic activity and community renewal in St George’s and beyond.”
Ms Francis spoke on the issue in response to questions from the Gazette about an entrepreneur who struggled for months to find a new location for her business, despite stores sitting empty at the East End.
Ms Francis said: “There may be opportunities for the Corporation of St George to explore taxing vacant properties and thereby incentivise the tenanting of property, which is something that should be considered to help revitalise the town.
“This would be a discussion with the Government to change legislation to allow those powers.
“It’s a concern. We need to work with property owners to see how we can better St George’s.”
The Government said the establishment of the Ministry of Housing and Municipalities underscored its commitment to meeting Bermuda's housing needs.
Part of its remit is to provide housing solutions, including addressing vacant properties.
A $21 million investment under the Bermuda Housing Corporation is being used to refurbish 137 older housing units over four years. This initiative includes:
• 77 derelict units that will be restored and added to the BHC housing stock
• 60 rental units undergoing major renovations and upgrades
The progress thus far includes:
• 68 units have been completed (34 renovated, 34 new additions)
• 29 derelict units are being addressed, which include: Harmony Terrace East, Paget — 12 units (expected completion this month); 18 Battery Road, St David's — 12 units (expected completion, end of 2025); and Chelsea Apartments, St George's — five units (expected completion in February 2026)
A spokesman said: “The remaining 40 units are in various planning stages and are awaiting the next tranche of financing in the upcoming fiscal year. All 137 units are expected to be completed by 2027 and updates will be provided in due course.
“Efforts are also under way to develop policies and, where necessary, amend legislation to encourage the revitalisation of vacant buildings.
“While other urgent matters also require attention, the Government remains committed to maximising the use of underutilised properties to support economic growth, housing availability and community enhancement.”
The Government pledged to “leave no stone unturned” to expand housing during its latest Throne Speech.
“In addition to partnering with the private sector to offer rent-to-own programmes and completing the amendments to the Landlord and Tenant Act to support mutually positive rental relationships, during this session, the Government will advance amendments to the Acquisition of Land Act 1970 and the Bermuda Housing Act 1980 to provide for a more efficient, streamlined means by which to address vacant and derelict properties,” it said.
“These units will be returned to the housing stock, providing additional housing for Bermudians.”
In 2023, a Labour Force Survey found that about 11.7 per cent of more than a thousand surveyed households were vacant or derelict, equating to 181 properties, while there were 29 vacant public properties.
A spokesman said: “While these figures provide insight into the issue, a more comprehensive assessment would be needed to fully understand the extent of vacant properties, both public and private, and their potential for redevelopment.”
Other programmes have been explored to address vacant properties.
The Bermuda Plan 2018 includes strategies for efficient land use and conservation, while the Economic Stimulus Programme has targeted the refurbishment of disused properties.
“Potential changes to the Land Valuation and Tax Act or other relevant legislation could introduce a mix of incentives and penalties to encourage property owners to renovate and repurpose vacant buildings,” the spokesman said.
“A thorough legal and economic assessment would be required to determine the most effective approach.”
He added that the primary ministry responsible for taxation matters, including potential taxation on vacant properties, was the Ministry of Finance.
Given the potential economic, housing and urban planning implications, other ministries such as the Ministry of Home Affairs, the Ministry of Public Works and the Ministry of Economy and Labour may also be involved in discussions.
In 2023, George Dowling III, then Mayor of St George, revealed at a public meeting that the Corporation of St George was considering imposing an “empty building tax” in a bid to prevent properties becoming derelict.
This was to be part of the corporation’s Strategic Town Plan. The residents surveyed highlighted concerns including neglected buildings, poor standards of accommodation and a lack of apartment-style properties.
Mr Dowling said: “The problem with vacant buildings is that they’re privately owned.
“We have been talking about implementing a vacant building tax to encourage people to rent out their properties and that would flow down to everything else around it.”
However, Candy-Lee Foggo, town manager, said then that the corporation was unaware of who owned some of the real estate.
No open register of property owners exists for the municipality because the town has no municipal taxes.
“If the tax regime changed, then this would be a consideration,” Ms Foggo said.
“Individually, we can find out who owns what through word of mouth or we can knock on doors, but that becomes labour intensive.”
She said landlords requiring help with the cost of upkeep or painting could approach the corporation or the Bermuda Economic Development Corporation.
Asked about the role of the St George’s Preservation Association, made up of representatives from the corporation, the Bermuda National Trust and Department of Planning, Quinell Francis, the Mayor of St George’s who chairs the association, said: “The remit of the association is to opine upon development in the protected area and there are other powers like the ability to restore and repair protected buildings for which we are not currently funded.
“The association also has the power to declare a building protected if of historical significance.
“However, there are no powers to force building owners to rent out their properties.”
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