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FAQs
Who can own property in Gibraltar?
Any person of any nationality may own property in Gibraltar
Who can own a Gibraltar Company?
Any person of any Nationality may own a Gibraltar Registered Company. Purchasing
through a Gibraltar Registered Company may have Tax advantages.
How does the Conveyancing System work in Gibraltar?
Subject to contract Procedure
The sale procedure in Gibraltar is similar to that in the UK
-1 Any receipt of an offer to purchase through an agent should be on a "subject to
contract" basis. Agent usually receives 2% subject to contract deposit
-2 Once an offer is received, Solicitors are instructed
-3 Vendor's Solicitor prepares draft contract
-4 Purchaser's Solicitor considers draft contract and makes local searches and
Enquiries
-5 Meanwhile purchaser may arrange structural survey, mortgage survey and arranges
finance
-6 Contracts are approved after amendments agreed
-7 Contract then exchanges and a deposit paid. Parties are then bound to transaction
What are the costs involved?
Stamp Duty is now charged as follows:
-On a purchase of up to £160,000 no charge
-between £160,001 and £250,000 1.26%
-between 3250,001 and £350,000 1.6%
- over £350,000 2.5%
- Charge on a mortgage 0.13% on loan
Other disbursements
-Supreme Court Registration Fee £20 to £40 per document
-Land Registry Fee £52 per original document & 50p per duplicate
Legal Fees
- normally on a scale can be up to 1% of purchase price
What are the advantages in buying property in Gibraltar?
Taxation and Residency
Qualifying (Category Two) Individual status limits the taxation payable in Gibraltar to monies remitted to Gibraltar up to a maximum of £50,000 taxable income. The minimum tax payable is £14,000 and the maximum is approximately £20,000. See more in our CAT 2,3,4 Section in our home page.
Capital Gains Tax
There are no capital gains taxes in Gibraltar. On the sale of property, any profit made is free of all taxation provided that the company is not actually trading in property. This may occur where a company purchases for example five properties and sells the properties individually over a period of time. Effectively, if the company buys five properties and sells all five properties simultaneously at a later date, then no income tax liability will arise. However if the company sells the properties at different times then the likelihood is that the Commissioner of Income tax will consider the company to be trading and assessable to income tax at the company rate in Gibraltar of 35%.
This liability to income tax can be avoided by purchasing individual units in separate Gibraltar companies. If one Gibraltar company is incorporated for the purchase of each unit then on re-sale of that unit there will be no income tax liability.
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Income Tax
The corporate rate of tax on profits is 35%. (Small companies rate 20%). This tax is payable on profits after all deductions. Full mortgage interest relief is given against income received and therefore it is an advantage to purchase by obtaining a loan facility if it is intended to rent out the property. In certain circumstances it may be possible for the mortgage to be given by a foreign entity although a liability to withholding tax may arise.
Estate Duty
There is no Estate Duty in Gibraltar
Other Capital Taxes
There are no wealth, gift or other Capital Taxes
Value Added Tax
There is no VAT in Gibraltar
Other Advantages
Currency and Exchange Control
Gibraltar's currency is the Gibraltar pound. The sterling pound is also accepted in Gibraltar on a one to one basis with the Gibraltar pound. There are no exchange controls in Gibraltar.
Communications
Gibraltar enjoys a sophisticated communications system boasting the most up to date telephone and satellite communication systems as well as regular air services to London.
Financial Services Commission
With the passing of the Financial Services Ordinance and the appointment of a Financial Services Commission dedicated to regulating investment business in Gibraltar people should be confident that Gibraltar has the necessary expertise, regulation and supervision to ensure the maximum protection for the investor or client whilst at the same time ensuring the development of Gibraltar as an offshore finance centre. The functions of the Commission are to keep under review the operation of Gibraltar legislation and the effectiveness of supervision of financial services; to monitor the extent to which Gibraltar legislation and supervision complies with European Union obligations and supervisory standards governing financial services in the United Kingdom where Community law applies; to protect the public against financial loss arising out of dishonesty, incompetence or malpractice; to advise the Government of Gibraltar and the Government of the United Kingdom on matters concerning financial services; and to draw up codes for regulating the terms of service of persons employed by the Commission.
Title to Property
In all modern developments in Gibraltar the land is owned by the Government of Gibraltar which grants a lease to the development company for 150 years. The development company then sells on to a purchaser. The purchaser receives a lease over the property for 150 years less 7 days.
Management Company
A management company manages the development as a whole. Usually the purchasers own the management company and contribute to the running costs of the development by way of service charges payable quarterly or annually in advance.
Rates relief
The Rating system has developed from the old UK model and all premises are re-assessed annually to ascertain their Net Annual Value. Rates are generally charged at 60% of the Net Annual Value and are paid quarterly in advance with a 20% discount for early payment in the case of non-domestic premises. Most new developments however enjoy rates relief so that the tenant does not pay rates for the remainder of the first tax year (July to June ) of occupation which is thereafter based on a rising scale until the 6th year of occupation when full rates become payable.
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