Buying Help - Stamp Duty & Taxation

Purchasing Property in Gibraltar

If you are interested in purchasing a property in Gibraltar, there are a number of issues which require consideration.

Leasehold Property

The Gibraltar Government owns the land in all modern developments in Gibraltar. Typically, the Government grants a lease to the development company for 150 years. The development company then sells each property on the land to purchasers, either in their individual capacity or in the capacity as a company. The purchaser therefore receives a lease over the property for 150 years less 7 days.

Freehold property and Flying Freehold property does still exist in Gibraltar but such properties are few and far between. In the event that you are considering purchasing such class of property, it is recommended that you seek legal advice.

In most leasehold purchases, the estate where the property is situated is managed by a management company. The Purchaser of the property will ordinarily be required to pay service charges on a quarterly or annual basis.

Stamp Duty

The Gibraltar Stamp Duties Act 2005 was recently amended with effect from the 1st July 2010. Under such amended provisions, stamp duty will be levied on the purchase price of properties as follows:

Stamp Duty

  • Where the property value does not exceed £200,000.00 the stamp duty will be levied at nil value
  • Where the property value exceeds £200,000.00 but does not exceed £350,000.00 a 2% stamp duty charge will be levied on the first £250,000.00 with a further 5.5% payable on the value that exceeds £250,000.00
  • Where the property value exceeds £350,000.00 a 3% stamp duty charge will be levied on the first £350,000.00 with 3.5% charged on any value that exceeds £350,000.00

The Government of Gibraltar have extended the nominal stamp duty threshold from £200,000 to £250,000 for first-time buyers and second-time buyers.

Stamp Duty on Mortgage

  • For £200,000.00 or less 0.13%
  • For more than £200,00.00 0.20%

Taxation & Residency

Individuals who wish to enjoy the benefits of Mediterranean living in a beneficial tax environment need no longer look beyond Gibraltar. Under the Qualifying (Category 2) Individual Rules 2004 individuals in possession of a Qualifying Certificate are liable to tax only on the first £80,000 of assessable income. Under the rates of the tax currently enforced in Gibraltar, the maximum liability to tax for such individuals would be approximately £26,000 per annum. There is, however, a minimum tax of £22,000 per annum, payable irrespective of the individual`s income in that year of assessment.

Only individuals not currently resident in Gibraltar and who have not been resident in any of the previous five years of assessment may apply for a Qualifying Certificate.

Such applications should be made to the Finance Centre Director of Gibraltar and must be accompanied by two references, one of which must be from a bank confirming that the applicant holds assets in excess of £2,000,000.00. The application itself also comes with a non-refundable fee of £1,000.

In order to be successful the applicant must have, for the exclusive use of himself and his family, approved residential accommodation in Gibraltar.

Details of the property acquired or rented must then be forwarded to the Finance Centre Director within two months of the issue of the Qualifying Certificate. The Finance Centre Director may decide whether or not a property is an approved property. This usually consists of verifying that the size and type of property is consistent with the size and make up of the applicant`s family and the applicant`s status as a Qualifying Individual.