The Gibraltar Government owns the land in most modern developments in Gibraltar.

Typically, the Government grants a lease to the company developing a particular plot of land for a term of 150 years. The development company then sells each apartment on the land to third parties for the term less seven days.

Freehold property does still exist in Gibraltar but such properties are rare. In the event that you are considering purchasing a freehold property, it is recommended that you seek legal advice before placing a deposit because the title history to such properties is complex.

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 half yearly basis to the management company.

The Stamp Duties Ordinance 2005 recently came into force in Gibraltar.

Under the new legislation, stamp duty is payable on the purchase price of properties as follows:

Qualifying (Category 2) Individual status limits the amount of tax payable in Gibraltar by individuals in respect of monies remitted to Gibraltar up to a maximum of £45,000 taxable income, regardless of the actual world-wide income of the individual.

The maximum tax payable by a Category 2 Individual is £19,000 and the minimum is £14,000.

Applying for Category 2 individual status involves an application for Tax Status and an application for Gibraltar residency. The following items are required in support of a category 2 application:

A lawyer would ideally handle the above procedure on behalf of an individual interested in obtaining such status.

Further to the above, there are no capital gains taxes operating under Gibraltar Law. When a property is sold, all profit is free of taxation except in the case of a company which sells as part of its trade.

Companies which are registered in Gibraltar as Tax Exempt companies may apply to the Director of Gibraltar’s Finance Centre for a certificate designating an individual, employed by them to be certified as a Qualifying Category 3 Individual.

To be considered for such status, an individual must possess skills which are deemed by the Director of the Finance Centre to be “essential to the operation of the company and which not available in Gibraltar”.

It is important to note that an individual applying for such a certificate must not have been employed in or from Gibraltar in the five years preceding the application and must have approved residential accommodation in Gibraltar.

In the event that the individual is registered, tax of £10,000 per annum shall be payable in twelve equal monthly instalments on the taxable income of the individual.