The first thing to determine when buying a property is how much you can afford. Property World Real Estate’s financial advisor will be happy to provide guidance on the level of mortgage available to you and the different types of mortgages available by lending institutions in Gibraltar.

It is also advisable that you obtain a quotation from the legal firm you will be instructing to undertake your conveyance. We are closely associated with several top legal firms in Gibraltar who have already provided our clients with an excellent service.

How much can I afford to pay a month?

Having made the decision to buy a property, you need to find out how much you will need to borrow and how much it will cost to repay.

The amount you will be able to borrow will depend on your earnings, your age and how much of the property’s value you wish to borrow.

Below is a table giving you a guide of the general lending criteria available from lending institutions in Gibraltar, in the case of a married couple.

Please note the lending criteria is for guidance and may change depending on your choice of lending institution.

Where Shall I buy?

Buying a property is an important and personal choice but we can assist you by getting to learn what your requirements are. Our professional and friendly sales personnel at Property World will endeavour to find the Property that best suits your needs, providing you with all the necessary information regarding the different districts in Gibraltar.

Gibraltar can offer a diverse range of properties, from luxury apartments in the beautiful marinas to classical old town historical properties. Two main factors will determine, to a large extent, the type of property that will be available to you in the Gibraltar property market. The first of these factors is affordability which will determine the range of properties available for purchase. The second is the nature of your purchase; if the purchase is purely for investment other influencing factors will apply.

Whatever your choice Property World will be happy to assist you every step of the way, to what we hope is ultimately the right choice.

Paying a Deposit

A holding deposit of 2% of the purchase price is paid, normally to the Estate Agents, where it is held subject to contract, once you have decided on a property and your offer has been accepted. In the case of new developments the deposit, which is usually 5% is paid direct to the developer upon signing of the Reservation Agreement. Caution is advices as the execution of the Reservation Agreement may lead to the deposit being non-refundable. It is therefore advisable to consult your legal advisor prior to placing a deposit of this nature.

Completion

Completion is estimated to take from three to six weeks depending on the nature of the property. Once contracts are exchanged your lawyer will ensure that title to the property is good and not subject to any charge or mortgage that will not be released prior to completion.
At completion the balance of the purchase price is paid and possession of the property is procured.

Once the property is obtained your lawyer will register your ownership in the Land Registry. This registration process is presently undergoing considerable delay resulting in registrations to take somewhere between twelve to eighteen months. In any event this delays will not affect your use of the premises.

Ownership of Property in Gibraltar.

Practically all new developments on the Rock are based on leasehold. A Headlease of 150 years is granted to the developer who subsequently grants an Underlease to the purchaser for at least 99 years. The balance of 51 years being passed to a Management Company of which the purchaser, once he owns the property, becomes a shareholder in. These underleases have cross-covenants and obligations that ensure that the development is maintained in good condition by way of payment of service charges by the owners of each of the apartments.
There are some older properties that are held on a Freehold basis, though these are not particularly common and generally do not provide as attractive a security as underleases do for lenders on the Rock.

Costs of buying a property

Legal fees range from a minimum of £350 to 1% of the purchase price. It is recommended that you shop around so you can compare fees of different legal firms before entering into a commitment.

Registration disbursements are approximately £250 but may vary depending on the nature of the conveyance.

Stamp Duty on the property is 1.26% of the purchase price and on the mortgage 0.13% of the amount borrowed.

Surveys

When buying a property the legal principle of ‘caveat emptor’ (let the buyer beware) applies so it is in your interest that you seek professional advice from a surveyor in order to protect yourself.

It is standard practice for a lending institution to insist on a survey of the property before lending any monies. This valuation is undertaken for mortgage purposes. In the case of older properties it is advisable to appoint a surveyor to undertake a Home Buyers Survey Valuation of a Full Building Survey.

Standard running costs involving property in Gibraltar.

Generally the majority of leasehold properties pay rates, ground rent and service charges.

Tax Benefits for home owner

There are three main forms of tax benefits to home owners in Gibraltar. Property World’s financial advisor will be pleased to ascertain the tax implications personal to you.

1. Tax relief on mortgage interest
2. Tax relief on qualifying insurance premiums
3. Tax relief for the ‘First Time Buyer’

Any profit from the sale of a property in Gibraltar is not subject to any local capital gains taxes. There are however tax implications when a sale is not conducted by a private individual.