Buying a property in Gibraltar

Property ownership in Gibraltar is available to people of all nationalities. However, there are regulations governing certain types of property purchase, and different methods may need to be followed dependant upon the buyer’s current or prospective tax status. Property may be bought either in the buyer’s name or through a Gibraltar Registered Company, a method that may have tax advantages for the beneficial owner of the company. New properties are sold on the basis of a 150 year lease, although some older properties may be freehold.

Certain residential developments in Gibraltar and certain individual residential units may only be purchased by people who have lived in Gibraltar for a fixed number of years and who are not taking advantage of certain tax categories. High net worth individuals who are prospective residents of Gibraltar may qualify for a special tax category (explained below) and must either purchase or rent properties designated as approved for these individuals by the Government of Gibraltar. Most of the high quality residential developments built in recent years fall into this approved category.

Property sales procedures are largely similar to those currently in operation in the United Kingdom. Offers to purchase are ‘subject to contract’ and a 2% deposit is normally payable at this point. Solicitors are appointed and the vendor’s solicitor will prepare a draft contract. The purchaser’s solicitor will then consider the contract and carry out any necessary searches and enquiries. A structural survey and a mortgage survey can also be carried out at this time. Once all points are satisfactory to both parties the contract can be exchanged and a deposit paid. At this point both parties are bound to the contract. Property purchases above £160,000 are subject to stamp duty on a sliding scale, with properties between £160,001 and £250,000 subject to 1.26% duty, properties between £250,001 and £350,000 subject to 1.6% duty, and properties priced at £350,001 and above subject to 2.5% duty. There is a mortgage charge of 0.13% of the loan. There are also fees to be paid for Supreme Court Registration and Land Registration, although these are low; legal fees may also be due, currently up to 1% of the purchase price.

Tax categories
High net worth individuals and certain categories of workers can take advantage of special tax concessions when residents of Gibraltar.

Category 2 status refers to wealthy individuals and families resident in Gibraltar who may be subject to a high rate of tax on income in their countries of origin. Tax is only levied on the first £70,000 of income, leading to a personal tax liability of between £20,000 and £26,000 on total income. Furthermore, capital gains tax, estate duty, wealth tax and gift tax are not levied in Gibraltar. Detailed information can be obtained from the Gibraltar Finance Centre (www.gibraltar.gi/finance). If desired, we can assist you in making an application to be considered as a Category 2 resident of Gibraltar.

Categories 3 and 4 refer to now discontinued tax categories that applied to highly skilled workers relocating to Gibraltar. Although new entrants into these categories are now disallowed, individuals who fell into these categories in the past may apply to be considered under the HEPSS (High Executive Possessing Specialist Skills) category; conditions may apply to these individuals when purchasing residential property.


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