LAND AND PROPERTY IN GIBRALTAR
GENERAL
Gibraltar has a superficial land area of 2.53 square miles – 6.543 square kilometres. The flat land is shared between the Military and Civil interests in Gibraltar and is therefore a scarce resource.
The percentage of undeveloped land is extremely small when one excludes the rocky cliffs and steep sloping land on the upper rock. The Government however, is always keen to explore the redevelopment of older properties or properties passed on by the Ministry of Defence, with a view to attracting investment and encourage economic growth. Whenever possible, pockets of previously undeveloped land are also considered.
LAND TENURE
Land tenure in Gibraltar follows UK principles.
Land and property are either held on a Freehold or Leasehold basis, with the
latter taking various forms depending on the length of the lease term and
whether residential or commercial. It is not the policy of HM Government of
Gibraltar, to grant Freeholds. Those that do exist are historical and are
mainly concentrated in the central Town area. It is now the common practice to
make available Crown Lands and property on long leasehold terms usually for 99
or 150 years. Commercial lettings take various forms depending on the
circumstances of the business venture and location.
LAW
Property Law is also broadly based on the UK system as it was prior to the
inception of the Law Property Act 1925. There are no restrictions on foreign
nationals purchasing, except in some residential developments jointly owned by
individuals and HM Government of Gibraltar where purchasers must qualify as
eligible for Government Housing.
STAMP DUTY AND REGISTRATION
There are a number of duties and disbursements as follows:-
(i) Nil % on the first £260,000 of the value of the property;
(ii) 5.5% on any balance above £260,000 to £350,000
(iii) 3.5% on the balance above £350,000
(b) Nil % where the property is being transferred between spouses or, following the dissolution of a marriage, between former spouses
(c) In all other instances:-
(i) Nil % where the value of the property does not exceed £200,000;
(ii) 2% on the first £250,000 and 5.5% on the balance, where the value of the property exceeds £200,000 but does not exceed £350,000; and
(iii) 3% on the first £350,000 and 3.5% on the balance where the value of the property exceeds £350,000.
Additionally, if the property is purchased with the assistance of a mortgage, stamp duty is charged at the rate of 0.13% where the amount borrowed does not exceed £200,000 and 0.20% for amounts in excess of £200,000.
2. Land Titles Register – a fee of £175 per deed is charged for recording the transaction in the Land Titles Register.
NOTE:
The registration procedure referred to above should not be confused with the Land Registration procedure in the United Kingdom. In Gibraltar there is only a requirement under the Gibraltar Land Titles Act 2011 to register the deed in order to keep a public record of property transactions. As a result, the protection afforded by the priority of periods granted under the Land Registry rules in the UK is not available in Gibraltar.
LEGAL FEES
Fees for conveyancing transactions are generally charged by reference to a scale and equate to between ½% and 1% depending on the size of the transaction.
RENTALS
The property market in Gibraltar, primarily because of its very limited size, is very volatile and drastic changes in supply and demand have in the past resulted in extreme conditions of growth and recession. In the period following the re-opening of the land frontier by the Spanish Government in 1986 the economy grew rapidly and rentals generally shot up. This trend subsided with the advent of large reclamation and development projects which then contributed to a general downturn in property rentals. A continuing growth in economic activity has absorbed all of the supply and rents are once again on the increase.
The pedestrianisation and beautification of Main Street, Casemates Square, Irish Town, John Mackintosh Square and the Leisure Centre have given the Town Centre a welcome lift and traders in these areas appear to be benefiting from increased tourist flow across the Frontier, and from Cruise liner visits.
Shop rentals in Main Street are now at an average of £25 - £55/sq ft. Office rents are currently at around £20 – £35/sq ft. Industrial premises tend to be concentrated in Government land areas and rents are currently between £5 - £7.50/sq ft.
RATES
The Rating system has developed from the old UK model. However, all premises can be re-assessed annually to update their Net Annual Value. Rates are charged at 60% of the Net Annual Value and generally at 67% for commercial premises, although in the case of retail and wholesale use, including bars and restaurants, these are charged at 47%. They are paid quarterly with a 10% discount for domestic premises, a 20% discount for commercials, and a 50% discount for retail and wholesale, including bars and restaurants, for payment on time.
Additionally for new companies starting up business in Gibraltar, there will be a discount for early payment of Rates of 65% for their first year of trading and 25% for their second year of trading.