Five tips for buying a property in Gibraltar

If you are thinking of buying a property in Gibraltar, it can be a fantastic choice. Gibraltar is a British Overseas Territory, meaning that British people have the right to live, work and operate businesses there. And alongside this, Gibraltar encourages overseas nationals to live and work on The Rock (as it is known) via low rates of taxation.

So, considering a property purchase in Gibraltar can put you in very good company. But it is always worth knowing as much about the place before you finalise your decision to move. Here we take a look at five tips that will help you when you consider buying a property in Gibraltar. 

1. Understand the location

Many people considering buying property in Gibraltar simply search for the property of their dreams without thinking too much about location. Gibraltar is so small - they reason - that property anywhere is functionally the same. In fact, this isn’t the case and it is really worth understanding the geography of Gibraltar as well as the various areas before you make a property purchase. 

The southern part of Gibraltar is the sunniest and although the distance isn’t too far, it can have a different climate from the northern side of Gibraltar near the airport. Likewise some properties have views over the Bay of Gibraltar, others have views over the Alboran Sea, and some have no sea views at all - these all reflect in the popularity and pricing of properties. 

2. Don’t forget the lease

In Gibraltar, the vast majority of properties are leasehold. The government actually owns the land that the property is on and when you buy the property you are effectively leasing that land. The leases tend to be either 99 or 150 years. This is in contrast to many other parts of the world, where most property purchases mean buying the land as well. 

It is possible to buy freehold properties, however this is non-standard, and you might find that getting lenders for freehold properties is more complex. 

3. Take specialist advice if working for yourself

If you work for yourself or own your own company and will be doing the same when you move to Gibraltar, it’s a really good idea to take specialist advice in the best situation for you to opt for. For example, it is important to understand the difference between operating as a sole trader and as a limited company in Gibraltar.

“Gibraltar continues to offer many advantages for entrepreneurs chasing their dream as well as international companies looking to take advantage of the full range of solutions available,” says Selwyn Figueras, Partner at Hassans International Law Firm “becoming a sole trader is a relatively straightforward, cheap and efficient way to set up a business, but an individual or group of individuals may choose to ‘incorporate’ and establish a Gibraltar Limited Liability Company”. 

Each option has its advantages and disadvantages, so it is important to establish which one is right for you. 

4. Factor stamp duty into your purchase price

Stamp duty is an associated cost when buying property in Gibraltar, and it should be factored in when you are considering the funds you need to make the purchase. There is no stamp duty paid on properties that cost under £200,000, and then a scale that reaches 3.5% on all properties over £350,000. 

5. You need to have your own survey carried out

It is sometimes the case that property buyers in Gibraltar believe that there is no need to have a survey carried out on the building. This misconception has come about because as a part of the property purchase you will be charged for a survey that is carried out for the lender. However, this survey is purely for valuation purposes and only considers the reasonable value of the property. 

It is important, then, to have your own survey carried out - one that focuses on the structural integrity of the property. 

6. Take Note Of The Small Things

When buying a property in any state, it's incredibly important to thoroughly inspect your new home. Signs of mold could impact your indoor air quality, if the wood framing is splintered, you may have to look at investing into a decent HVAC unit to keep your home comfortable. All of these things may seem small, but they can accrue to a pretty big pay cut if you're taken by surprise. 

Final thoughts

There are many great reasons to buy property and move to Gibraltar; the fantastic weather, the favourable tax rates, and the convenient location. Whether you are moving your business and taking your family, or you simply feel that you have earned a relaxed retirement in the sunshine, there has never been a better time to buy property in Gibraltar.