Any home sale or transfer either by a live person or by inheritance typically attracts stamp duty.

Even if no money is paid, stamp duty is payable based on open market value and calculated on a sliding scale of up to seven per cent. If a home’s open market value is $1 million and a half share is transferred (even for no money), stamp duty payable is $14,000.

Homeowners often want to add others to title for no payment; typically, a spouse or child over 18 years old. In the past, this typically reduced stamp duty payable on death (known as death tax).

Nowadays, inheriting spouses are exempt and the “primary family homestead” concession exempts one home (and no more) of a Bermudian from death tax.

Non-Bermudians do not qualify for primary family homestead. Spouses of non-Bermudians are exempt from death tax, but still require a land license under the Immigration Act.

As primary family homestead only exempts one home, it can be tax efficient to transfer additional homes/property during a lifetime. Careful consideration and calculations are advised.

Typically, it is not tax efficient for a Bermudian homeowner, with only one home in Bermuda, to add anyone else to title. It may be tax efficient for a non-Bermudian to add others to title.

Stamp duty can be reduced if the transferring homeowner keeps a lifetime interest in the home. The reduction is based on the Tax Commissioner’s lifespan actuarial table. The older the homeowner, the lesser the estimated life span, and so less tax reduction.

Property transfers from one estranged spouse to the other, if compliant, are only subject to stamp duty of $200 (plus the Tax Commissioner’s fee of $202); rather than valuation-based stamp duty.

After death, a home designated as a primary family homestead is transferred to heirs free of death tax. A home can be registered as a primary homestead either before, or after, the owner's death.

However, if the deceased was Bermudian and owned more than one home or property at death and no property was registered for primary homestead, the least valuable qualifies to maximise the tax due.

A Bermudian can either apply directly to the Tax Commissioner’s office for a primary family homestead designation by completing a form and supplying evidence of title -- or instruct an attorney to apply on his or her behalf.

After the application is successfully processed, the Tax Commissioner’s office issues a primary family homestead certificate.

If a Bermudian buys a home valued at $750,000 or less and has not owned a property before, there is a stamp duty exemption worth up to $24,000. A child added to title will be disqualified from the first-time buyer stamp duty exemption, if the child’s share of title is greater than 25 per cent.

If a person is added to title, the parties should consider how the property is to be shared between two or more owners. Remember one owner (or indeed a trustee in bankruptcy) can apply to the courts for a sale of a home, against the wishes of other owners.

Homes can be co-owned as joint tenants, or as tenants-in-common.

For joint tenants, ownership passes by survivorship and so the longest surviving joint tenant ends up owning the whole property. No-one, other than the last surviving joint tenant, may pass on their share by inheritance.

After the death of a joint tenant, it may be unnecessary to go through the probate process, which can be protracted and expensive.

Tenants-in-common may sell or transfer their share in the property and or pass on their interest by inheritance. Although a tenant-in-common may mortgage their share, such is unlikely to be attractive to a lender, unless the other tenants-in-common also join in with the mortgage.

Anyone owning a home should consider estate planning with an attorney, so that stamp duty and other potential consequences can be considered.

Attorney Neil Molyneux is a member of the Property Practice Group at Appleby (Bermuda) Limited. A copy of this column is available on the company's website at www.applebyglobal.com.

This column should not be used as a substitute for professional legal advice. Before proceeding with any matters discussed here, persons are advised to consult with a lawyer.