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System & Law

The system of property ownership in Gibraltar is based on that of the United Kingdom. Both leasehold and freehold ownership are available with the former, being the most common.

Title deeds of properties showing the historic and current owners are registered at our Land Registry governed by the Gibraltar Land Titles Act 2011. Property law in Gibraltar is governed by the Land Law & Conveyancing Act 1895.

Leasehold Ownership

Purchasers who buy directly from a developer will normally be granted a lease or underlease for a fixed term of years; typically 99 or 149 years. Subsequent purchasers will be granted an assignment of the number of yearsremaining on the lease/underlease.

There is no restriction on the possible number of assignments which can be made. By buying a leasehold property you are effectively buying the right to remain in the property for a set period of time. All your rights and obligations will be contained in the lease/underlease.

If the lease/underlease expires, the property will revert to the original owner/landlord. In practice, however, a new lease/underlease granting a further term is negotiated with the original owner/landlord. In effect, this is a new purchase. A further sum of money will be payable to the owner/landlord but this tends to be much less than the original purchase price.

The lease/underlease will almost certainly include the requirement to pay both service charges and ground rent. Service charges normally cover the cost of the maintenance of the building and common parts as well as building insurance. The lease/underlease will normally state how the service charge amount is calculated and what costs it covers.

Ground rent is normally paid to the Gibraltar Government although the amounts tend to be minimal.

Freehold Ownership

Buying a freehold property means you own the property and the land that comes with it for an indefinite period. With freehold property there are no leases or underleases and the document by which title is acquired is known as a conveyance.

Who Can Own Property in Gibraltar?

In general, there is no national, residential or other restriction against any particular individual or company owning property in Gibraltar.

However, restrictions may apply to non-Gibraltarian nationals when purchasing in certain developments, primarily, co-ownership developments granted by the Government of Gibraltar.

Selling Property in Gibraltar?

As there is no Capital Gains Tax in Gibraltar, when a property is sold no tax whatsoever is payable in Gibraltar on the profits made.

Guide to buying a property in Gibraltar

Stage 1 – Identifying a property & paying a holding deposit

Once a purchaser (“you” or “your” as applicable) decides to buy a property, a holding deposit is normally paid to the vendor’s solicitor. In most cases estate agents represent vendors and they will usually request a 2% deposit, which is payable by you, in order to take the property off the market. This 2% deposit will later be deducted from the purchase price.

Stage 2 – Investigating title & exchanging contracts

The next stage is for you to instruct lawyers who will initially carry out a search at the Land Registry and investigate title to the property. This is to ensure that title to the property is properly constituted and that there will be no mortgages secured against it on completion. In addition, Preliminary Enquiries Before Contract are sent to the vendor’s solicitor. The enquiries cover a variety of matters relating to the property such as whether alterations requiring consent or planning permission have been made to the property, whether Energy Performance Certificates have been obtained and whether the vendor has experienced problems with neighbours or the management company, etc.

A purchase agreement is then drawn up by the vendor’s lawyers and delivered to your lawyers for approval. This agreement will set out the purchase price and the terms and conditions under which the property is being sold. Until a purchase agreement is signed, negotiations take place on a “without prejudice” and on a "subject to contract” basis. This means that until both sides have signed the agreement, no binding contract exists for the sale and purchase of the property. The signing of the purchase agreement by both sides is also known as “exchange of contracts”.

After exchange of contracts, both sides are under an obligation to go through with the transaction. If a party does not complete after exchange of contracts, the other side can sue them and force the defaulting party to go ahead. The defaulting party will be liable for all costs and consequences resulting from non-completion. In practice, this rarely occurs.

If a purchaser or vendor pulls out before exchanging contracts, he/she will not usually be liable to the other side. If a holding deposit has been paid to an estate agent, the deposit shall be returned in full to the prospective buyer. However ,this will depend upon the terms under which such deposit was paid to the estate agent which should always be “subject to contract”. Most estate agents will ask you to sign a memorandum of sale or a reservation agreement. You should read the terms of these carefully and, ideally, ask your lawyers to review before you sign.

Stage 3 - Completion

The next stage is for your lawyers to draw up a Deed of Assignment, if the property is leasehold, or a Deed of Conveyance, if the property is freehold. This deed is approved by the vendor’s lawyers and by all parties to the transaction. These will often include the management company of an estate and the original developer (as lessor). This deed is the document by which you will become the owner of the property.

Once the deed is approved, a completion statement will be drawn up by your lawyers. This will include details of the purchase price to be paid, the amount of money being advanced by a bank or building society (if you are taking out a mortgage) and stamp duty and registration charges payable to Government. At this stage your lawyers will ask you to provide the balance of all required funds needed to complete the purchase of the property. These funds will be paid into your lawyers’ client account and payment will be made by them to the vendor’s lawyers.

If you are obtaining a mortgage, funds will be requested from the bank or building society by your lawyers. You will only need to provide the balance of the required monies over and above the amount of the mortgage advance.

Once the deed is executed by all parties and the purchase price paid, such deed, the original historic title documentation and the keys to the property will be handed over to your lawyers. At this stage completion will have taken place and you will become the owner of the property.

Stage 4 – Registering the deeds & paying stamp duty

All properties purchased for £200,000 or less are exempt from stamp duty. If you are a first or a second time buyer, the threshold is £260,000 and your property purchase will also be exempt from stamp duty.

In all other cases, stamp duty needs to be paid to the Gibraltar Government through the land Registry as set out in the “Stamp Duty” section below. The deeds to your property also need to be registered at the Land Registry and extra costs are payable to effect this.

Please see our guide below with full details on the payment of stamp duty. You can also use our Conveyancing Calculator to work out your full expenses.

Guide to selling a property in Gibraltar

The same steps outlined above in the guide to selling a property in Gibraltar are followed with some differences as set out below.

In the first stage, the vendor (“you” or “your” as applicable) needs to find a buyer for the property which is normally done by engaging one or more estate agents. Once a buyer decides to buy your property, he/she will normally pay a 2% holding deposit upon which your property will be taken off the market. The 2% deposit will be kept by the estate agents once completion takes place. This is their fee and it is deducted from the purchase price on completion. In effect, you pay this fee and you will receive 2% less on completion. Some estate agents will charge less than 2% and this is a matter for negotiation between you and them.

At the second stage, the process is the same except that it is the purchaser’s lawyers who investigate title to the property. Your lawyers will need to provide answers to questions on your property which normally take the form of “Preliminary Enquiries Before Contract”

At the completion stage, the process is the same except that your lawyers will receive the proceeds of sale in their client account (less any deductions). The net proceeds of sale will then be paid by your lawyers to you.

The final stage is different in that you do not pay stamp duty on the proceeds of sale; this is only paid by purchasers. However, if you took out a mortgage secured on your property, this has to be paid back to the bank or building society and stamp duty of 0.03% is paid on total amount of the money advanced to you by way of mortgage.

Mortgages

In practice, most property acquisitions are carried out with the assistance of mortgage finance. It is thus very important that your lawyers should be authorised to represent the bank or building society in question as well as you.

Ellul & Co are on the panel of all building societies and most banks in Gibraltar. This means that no matter who you obtain your mortgage with we will be able to represent you and handle the mortgage transaction as well. Firms which are not on the panel of a bank or building society can represent you but will have to instruct a different firm to handle the mortgage which means you will potentially be paying much higher legal fees.


Stamp Duty

Stamp duty is a tax on property purchases payable to the Gibraltar Government. Depending on the value of the property, different levels of stamp duty need to be paid as set out below.

Stamp duty on the property

  • Properties of £200,000 or less - only nominal stamp duty is paid; £5 per deed and per counterpart.
  • For first or second time buyers, properties of £260,000 or less - only nominal stamp duty.
  • Properties of more than £200,000 but less than £350,000 - 2% on the first £250,000 and 5.5% on any amount above this up until £350,000.
  • Properties of more than £350,000 - 3% on the first £350,000 and 3.5% on any amount above this.

See our Conveyancing Calculator to work out your full expenses.

Stamp duty on mortgages

  • For mortgage advances of £200,000 or less - 0.13%.
  • For mortgage advances of more than £200,000 - 0.2%.
  • For repayment of existing mortgages - 0.03% irrespective of the amount.

See our Conveyancing Calculator to work out your full expenses.

Registration costs

There are various costs which need to be paid to the Land Registry in order to register your deeds as set out below. See our Conveyancing Calculatorto work out your full expenses.

  • Land Registry - £175 per deed
  • There are also commissioner’s fees and miscellaneous disbursements which on average range from £20 to £40.
  • If obtaining a mortgage, there is also a £10-£15 charge for notifying the interest of the finance institution on the buildings insurance of the property.

Legal Fees

Our fees are competitive and will vary depending on the value of the property and the complexity of the transaction. Please contact us for a free quote.

Conveyancing Calculator

Please fill in the value of the property being purchased and the amount of the mortgage advance (if any) to work out your expenses. The stamp duty figures will be accurate but the registration charges will be an estimate. There may also be some other expenses such as the costs of the lawyers of the management company of an estate and of the original developer signing deeds. These can range from around £250 to £500.

Once we have given you a quote for our fees you will know what the total cost of your proposed property purchase will be.


Please fill in the value of the property being purchased and the amount of the mortgage advance (if any) to work out your expenses. The stamp duty figures will be accurate but the registration charges will be an estimate. There may also be some other expenses such as the costs of the lawyers of the management company of an estate and of the original developer signing deeds. These can range from around £100 to £200.

Once we have given you a quote for our fees you will know what the total cost of your proposed property purchase will be.

Purchase Details


Stamp Duty on Assignment / Conveyance

 

Stamp Duty on Mortgage:

 

Stamp Duty on Release / Surrender of Mortgage:

 


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