The following information is intended as a guideline for persons wishing to purchase property in Gibraltar, and is not meant to replace professional advice. We strongly advise prospective purchasers to seek independent legal advice prior to signing any documentation.
What are the first steps?
By the time you have found a property you wish to buy you should ideally already have decided on the building society or bank you will be using, and the amount and type of mortgage you will be having.
If you wish we can gladly arrange a meeting with a Financial Consultant to discuss with you the fiscal aspects involved in purchasing your new home in Gibraltar or introduce you to the leading lending institutions.
Should I pay a deposit?
It is standard procedure on the Rock for a purchaser to pay a 2% deposit either to the estate agent or developer.
On what tenure is property held in Gibraltar?
The land upon which all modern developments in Gibraltar are built is owned by the Government of Gibraltar, which grants a lease to the Development Company for 150 years (the Headlease), which in turn grants an Underlease to the purchaser.
There are also many older style properties within the town area held on a freehold basis, although historically these are more difficult to raise finance for.
What is a management company?
The majority of modern developments in Gibraltar have a management company, which manages the upkeep of the development as a whole. The persons who own units within the development own the Management Company and contribute to the running costs of the development by way of service charges.
Do I need a Survey?
When you buy a property, the legal principle of "caveat emptor" (let the buyer beware) applies. To protect yourself, you need professional advice from a surveyor.
Before your bank or building society agrees to lend any money, they will insist on a survey of the property. In reality it will consist of little more than a valuation for mortgage purposes, unless you ask and pay for a more extensive survey.
Which solicitor should I appoint?
Choosing a solicitor for your Gibraltar property is not necessarily an easy matter. Although cost is an important factor on the properties for sale in Gibraltar, above all else you will want someone who will do a good job for you. Speed is vital because a delay at any stage could result in you losing the Gibraltar property you want. Hence the importance of your chosen solicitor keeping in contact with you on a regular basis concerning the properties for sale in Gibraltar.
House sales can fall through for many reasons, and it s advisable to ask your solicitor in advance what he would do regarding charging you in the event that the sale of the Gibraltar property fell through for no fault of your own. If for example, you find alternative properties for sale in Gibraltar, many solicitors will not charge other than a nominal amount, but the point is well worth checking.
What are the approximate purchase costs?
Legal Fees: Range from a minimum of £900.00 to 0.5% of the full purchase price.
Registration & Disbursements: An approximate figure of £300 should be allowed, but this varies from one conveyance to the next.
Up to £200,000 - No Stamp Duty
£200,000 up to £350,000 - On the first £250,000 2%
/ On the balance of £100,000 5.5%
£350,001 + - On the first £350,000 3% / On the balance at 3.5%
On a mortgage 0.2% of the loan amount.
What are the standard running costs involved in owning a property in Gibraltar?
As a general rule of thumb, the majority of leasehold Gibraltar property pay Service Charges (normally to the Management Company), General Purpose Rates and Ground Rent.
What tax benefits are there for home-owners?
There are 3 main forms of tax relief available to home-owners, and we strongly advise you to seek professional advice from a Financial Consultant.
Tax Relief on mortgage interest
Tax Relief on qualifying life assurance premiums
Tax Relief for the "First Time Buyer"
Is there Capital Gains Tax?
There are no capital gains taxes in Gibraltar, and any profit from the sale of a local property is free from all taxation on the proviso that it is not done as a business activity.
Thinking of Buying to Let Gibraltar property?
This is an expanding sector in the housing market and we can arrange buy-to-let mortgages through leading lending institutions and manage the property on your behalf. Please contact us for further information.