General

Gibraltar has a superficial land area of only 2.25 square miles - 5.83 square kilometres. The land is shared between the Military and Civil interests in Gibraltar and is therefore a scarce resource.

The percentage of undeveloped useable 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 re-development of older properties or properties transferred from 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 the Government, to grant Freeholds. Those that do exist were granted many years ago and are mainly concentrated in the central Town area. It is now the common practice to dispose of 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 in Gibraltar is broadly based on the UK system as it was prior to the inception of the Law of Property Act 1925. There are now no restrictions on foreign nationals purchasing property except in some residential developments where purchasers are limited to entitled persons.

Purchase Procedure

Once a suitable property has been found and an agreement on purchase price settled between vendor and purchaser, it is normal practice for 2% of the purchase price to be paid to the agents subject to contract and held in escrow pending completion.

Lawyers are then instructed to act on behalf of the vendor and the purchaser. The lawyer representing the vendor will submit a contract to the purchaser(s) for approval. The contracts are exchanged with a further 8% of the purchase price payable at this stage. The purchaser’s lawyer will submit a deed of conveyance or assignment to the vendor’s lawyer for approval. Once approved the purchasers lawyer engrosses the deed which is presented for signature by the parties at completion.

Stamp Duty and Registration

In property transactions there are a number of duties and disbursements as follows:-

a. Stamp Duty - this is currently charged at the rate of 1.26% on the consideration shown in the deed provided the consideration is at value. In addition, if the property is purchased with the assistance of a mortgage, stamp duty is charged at the rate of 0.13% on the sum borrowed.

b. Governor’s Approval - a fee of £52 per deed is charged for this approval which is a prerequisite to registration.

c. Registration - deeds must be registered in the Supreme Court and a fee of £20 is payable for each deed provided the document does not exceed 15 pages in length. If the document exceeds 15 pages but does not exceed 40 pages the fee is £40 per deed. If the document exceeds 40 pages the fee is £60 per deed.

The registration procedure referred to above should not be confused with the Land Registration procedure in the United Kingdom. In Gibraltar there is merely a requirement under the Land Titles Ordinance 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 does not apply.

Legal Fees

Fees for a conveyancing transaction are generally charged by reference to a scale and equate to between 1/2% and 1% depending on the size of the transaction.

Rentals

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. In the last few years however the increased developments have contributed to a slow down turn in rentals, which levelled off and are now again on the increase.

The pedestranisation and beautification of Main Street, recently completed, has given the Town Centre a welcome lift and traders appear to be benefiting from increased tourist flow across the Frontier.

Shop rentals in Main Street are now at an average of £25/sq. ft. Offices are still in abundance as a result of a large major   development undertaken in recent years although it is hoped that as the Finance Centre grows these will be taken up. Office rents are currently at around £12/sq. ft. Industrial premises tend to be concentrated in small areas although there is an Industrial Park with 120 units which was built by the Government. Industrial rents are currently between £3-£4/sq. ft.

Rates

The Rating system has developed from the UK model. Rates are charged at 60% of the Net Annual Value and are paid quarterly. A 20% discount is available to commercial premises for early payment.