LAND AND PROPERTY IN GIBRALTAR
GENERAL
Gibraltar
has a superficial land area of 2.53 square miles – 6.543
square kilometres. The flat land is shared between the Military
and Civil interests in Gibraltar and is therefore a scarce resource.
The
percentage of undeveloped 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 passed on
by 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 historical
and are mainly concentrated in the central Town area. It is
now the common practice to make available 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 Property Act 1925. There are
no restrictions on foreign nationals purchasing except in some
residential developments jointly owned by individuals and Government
where purchasers must qualify as eligible for Government Housing.
PURCHASE PROCEDURE
Once a suitable
property has been found and an agreement on purchase price settled
between vendor and purchaser, it is common for 2% of the purchase
price to be the fee normally 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 lawyer for approval. Once
this has been done, the contracts are exchanged with a further
8% of the purchase price being paid on exchange. During the
period between exchange of contracts and actual completion,
the purchaser’s lawyer will submit a deed of conveyance
or assignment to the vendor’s lawyer for approval. Once
approved and engrossed, the deed will be handed over to the
purchaser’s lawyer on completion.
STAMP DUTY AND REGISTRATION
There
are a number of duties and disbursements as follows:-
a. |
Stamp Duty – The Gibraltar Stamp Duties Act 2005
came into effect on 12th January 2006 and relates only
to transactions involving real estate property situate
in Gibraltar. The rates of duty applicable are nil %
if the property value does not exceed £160,000,
1.26% if the property value exceeds £160,000 but
not £250,000, 1.6% if the property value exceeds
£250,000 but not £350,000 and 2.5% if the
property value exceeds £350,000. Additionally,
if the property is purchased with the assistance of
a mortgage, stamp duty is charged at the rate of 0.13%
where the amount borrowed does not exceed £200,000
and 0.20% for amounts in excess of £200,000. |
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b. |
Land
Titles Register – a fee of £52 per deed
is charged for recording the transaction in the Land
Titles Register, which is a prerequisite to Supreme
Court Registration. |
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| c.
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Supreme
Court 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. |
NOTE:
The registration procedure referred to above should not be confused
with the Land Registration procedure in the United Kingdom.
In Gibraltar there is only a requirement under the Land Titles
Act 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 is not available in Gibraltar.
LEGAL FEES
Fees for a conveyancing
transaction are generally charged by reference to a scale and
equate to between ½% and 1% depending on the size of
the transaction.
RENTALS
The property
market in Gibraltar, primarily because of its very limited size,
is very volatile and drastic changes in supply and demand have
in the past resulted in extreme conditions of growth and recession.
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. This trend subsided with the advent
of large reclamation and development projects which then contributed
to a general downturn in property rentals. A continuing growth
in economic activity has absorbed all of the supply and rents
are once again on the increase.
The pedestranisation and beautification of Main Street, Casemates
Square, Irish Town, the Piazza and the Leisure Centre have given
the Town Centre a welcome lift and traders in these areas appear
to be benefiting from increased tourist flow across the Frontier,
and from Cruise liner visits. Shop
rentals in Main Street are now at an average of £25
- £50/sq ft. Office rents are currently at around £12
– 25/sq ft. Industrial premises tend to be concentrated
in Government land areas and rents are currently between £4
- £5/sq ft. However in the private sector industrial
premises can range between £8 - £12 / sq ft.
RATES
The Rating system
has developed from the old UK model. However, all premises can
be re-assessed annually to update their Net Annual Value. Rates
are generally charged at 60% of the Net Annual Value though
in the case of retail and wholesale uses are charged at 48%.
They are paid quarterly with a 10% discount for early payment.
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