Moving to Gibraltar: The Do’s and Don’ts
From tropical weather and Mediterranean cuisine to multicultural interactions and duty free shopping not to mention the ever exciting dolphin safaris, what’s there not to like about Gibraltar. The summers are long and warm; perfect for getting an enviable tan and its no surprise a lot of people consider moving here permanently.
To top off the climate is of course Category 2 tax residency. This is a tax incentive offered by the Gibraltar government. With a Category 2 tax residency status you only pay a maximum tax capped at a little over £29,000.
North of Gibraltar, is expansive Spain which extends to the West of the Rock and you can see the port city of Algeciras in the distance.
Gibraltar is a small territory; it only measures 6.8 square kilometers and so it goes without saying that land on the Rock is a scarce yet precious resource. To highlight this is Gibraltar’s Airport runway which intersects with the busiest street on Main Street. Every time a plane has to land or take off, the road is closed off which means that getting in through the Spanish border becomes an exhausting affair.
While the rest of Europe has suffered in part (or whole) from the global economic meltdown, Gibraltar remains a financial safe haven for investments. This of course has seen property prices surge.
Much of the realty development tends to be on the West side of Gibraltar. With the Mediterranean side mostly occupied by The Rock, there’s not much view to enjoy; needless to say the sun always sets early.
Whether looking to move to Gibraltar for a couple of months or permanently, you’re sure to find something to suit your taste without burning a hole in your pocket. From budget rentals on a towering highrise to sumptuously decked out villas overlooking the horizon, Gibraltar easily becomes a home away from home.
Property Buying Guide
Here are some important facts to keep in mind before and during purchase of property on Gibraltar.
Determine what bank or building society you’ll be using before you pick out your dream house. You should also have a predetermined mortgage type and amount already set. There are plenty of banks on the Rock that readily offer financing including Barclays Bank, Credit Suisse, EFG, Bank Jacob Safra just to mention four.
Building societies in Gibraltar include Leeds Building Society, Newcastle Building Society, Norwich & Peterborough Building Society; the list is endless.
A little bit of research is needed to decide on which financial institutions are best placed to offer a fiscal perspective on your new property prior to purchase.
Placing a Deposit
Paying a 2% deposit to either the developer or estate agent is standard procedure.
All land in Gibraltar on which modern development is built is owned by the Government of Gibraltar which in turn leases it out to the development company for 150 years known as the Headlease. The development company can then grant an underlease to third parties.
Not all property however is leased out. Most of the older properties in the town area are have a freehold status. They are harder to get finance for though.
Nationalities That Can Possess Land Or Property
Only British subjects or citizens may own property in Gibraltar. Thankfully though there’s a way around this for foreign nationals who would like to own a piece of Gibraltar.
United Kingdom and Gibraltar registered companies may own property or land in Gibraltar. It is not uncommon for foreigners to procure property via a Gibraltar company. There are no set limitations on the nationalities of persons who may own a Gibraltar registered company.
It is necessary to arm yourself with some professional advice from a surveyor in order to protect yourself as the legal principle of “let the buyer beware” (Caveat Emptor) applies. Moreover the bank or building society that will lend you funding requires a survey of any property to be purchased.
Is A Solicitor Necessary?
Yes. A solicitor is extremely important during the acquisition of Gibraltar property and will handle a majority of the procedures. Getting a good solicitor should be considered top priority. The Gibraltar property market is “hot” and thus a good opportunity for development may be there one day and gone the next. Choose a solicitor who rides on their reputation thus reducing your chances of losing out on your investment.
Before embarking on a commitment with any solicitor find out what rates you are likely to be charged in the event that the sale falls through as this is frequent.
Solicitor fees range between £900.00 to 0.5% of the property buying price.
There are several management companies on the Rock to which property owners pay service charges, ground rent and general purpose rates. However, some leaseholders prefer to establish their own management companies to develop and manage their properties.
Capital Gains Tax
Gibraltar remains a tax friendly territory. There is absolutely no capital gains tax paid on the sale of property unless the company trades in the property market.
Tax benefits for Gibraltar home owners come in three forms:
- Tax Relief for first-time-buyers
- Tax Relief on mortgage interest
- Tax Relief on life assurance premiums
For a more in-depth understanding of these three tax benefits, it would be prudent to seek professional advice from a qualified consultant.