Property & Conveyancing FAQ
The Conveyancing Team at ISOLAS boasts a wealth of experience in dealing with residential properties.
1. Who can buy a property?
Anyone can buy a property in Gibraltar which is on the open market.
There are certain properties in Gibraltar that belong to a restricted market known as the 3-year residency rule.
2. What is the 3-year residency rule in Gibraltar?
Certain properties in Gibraltar are only available for purchase by those who have been living in Gibraltar for a continuous period of 3 years. These properties may only be occupied by the owner and family and cannot be rented out. They are not suitable for buy-to-let investors.
3. Can I buy my property in the name of a company?
Yes, you can buy property in the name of a company, whether the company is incorporated in Gibraltar or outside of Gibraltar. Property owned in a company name is still subject to tax and you should obtain tax advice, which we can assist with, at the point of the purchase.
4. What should we consider before starting our property search?
There are many things that one should consider before starting their property search, we consider the following to be some of the most important:
- Budget and financing plans;
- Type of purchase: Off plan / resale / buy-to-let;
- Whether the intention is to live in the property, rent out or sell on;
- Mortgage plan;
- Location of property;
- Parking access;
- Residency requirements;
- Future construction around the property;
- Planning restrictions; and
- Housing rules (such as pets etc.).
5. What is the purchasing process?
This is a very broad question and can have a number of different answers depending on the type of property (off plan, government, open market etc) one wishes to purchase and whether a property is being purchased with the assistance of a mortgage or not. Therefore, a brief summary of the standard process with regards to a standard purchase and sale is more suitable:
The standard purchase process in Gibraltar begins with the agents issuing a memorandum of sale to the respective lawyers whereby usually a 2% refundable deposit is payable to reserve the property on a ‘subject to contract’ basis. Thereafter the purchaser’s lawyer submits pre-contract enquiries to the vendor’s lawyer which will contain various questions about the property such as: the items to be sold with the property (if any), exchange and completion dates, service charges, rates, information with respect of a management company, whether the property has suffered any water ingress etc., whether there have been any alterations made to the property etc. The Purchaser’s lawyer will review copies of the original title deeds forwarded by the Vendor’s lawyer to ensure good root of title and the lawyers will draft, review and approve all relevant documentation necessary for the purposes of exchanging contracts and thereafter completion.
Exchange of Contracts can either occur prior to completion or on the same date as completion. Usually a percentage of the Purchase price is paid at the time of exchange of contracts by the Purchaser to the Vendor. Once exchange of contracts has taken place the parties are under a legal obligation to complete the transaction on the agreed completion date in accordance with the terms of the agreement.
Should the purchaser be using a mortgage, the purchaser’s lawyer will prepare the deed of mortgage, liaise with the bank and prepare a report on title and request for funds in order to ensure that the mortgage funds are transferred on the date of completion.
The lawyers will also prepare a completion statement which will apportion rates and service charges to the date of completion depending on whether these have been paid up to date or not. Once the completion statement has been approved by the respective lawyers, the purchaser’s lawyer will request the funds for the purposes of completion, this will include registration costs, stamp duty costs, management company approval fees etc.
On the date of completion, the relevant deeds are to be executed by all parties and monies transferred from the purchaser’s law firm’s client account to the vendor’s law firm’s client account. Once the Vendor’s lawyer confirms safe receipt of monies and receives the fully executed deed, completion is said to have taken place and keys are released to the Purchaser as new owner.
6. What is Conveyancing Property Law?
Conveyancing Property Law is the legal transfer of property from one person to another.
7. Is Land Law Conveyancing?
Land Law relates to the rules which govern land and encompasses the rules relating to conveyancing. However, conveyancing is the process by which title of land is transferred from one owner to another.
8. What is a Memorandum of Sale?
A memorandum of sale is a form which records the details of the sale. These details include, but are not limited to:
- purchase price;
- property address;
- deposit paid by purchaser to the agent;
- vendor’s name, address, phone number, lawyer details;
- purchaser’s name, address, phone number, lawyer details; and
- any other agreed terms.
9. What is Stamp Duty payable on?
Stamp Duty Land Tax is the tax that the government charges when an individual or company purchases a property. Purchaser’s pay different rates depending on the value of the property and the amount of the mortgage. Stamp Duty is payable on the following rates:
(i) 0% where the value of the property does not exceed £200,000;
(ii) 2% on the first £250,000 and 5.5% on the balance, where the value of the property exceeds £200,000 but does not exceed £350,000; and
(iii) 3% on the first £350,000 and 3.5% on the balance where the value of the property exceeds £350,000.
Exception: * Companies do not benefit from this exception.
First or Second Time Buyers here in Gibraltar pay 0% where the value does not exceed £260,000.00 of the purchase price. For the purposes of clarification:
(i) 0% on properties up to £260,000;
(ii) 5.5% on properties valued between £260,000 and £350,000; and
(iii) 3.5% on properties valued over £350,000.
Stamp Duty is also payable on mortgages or further advances secured in Gibraltar. These are at the following rates, a Mortgage over £200,000 or less at 0.13% and over £200,001 at 0.20%.
Releases of Mortgage are calculated at 0.03% of the amount borrowed.
10. Will my bank outside of Gibraltar give me a mortgage on a Gibraltar property?
It is possible for a non-Gibraltar lender to take security over a Gibraltar property. However, it is rare. The majority of mortgages on Gibraltar properties are from banks/ branches situate in Gibraltar.
11. Can you help me obtain a mortgage for a Gibraltar property?
The application for a mortgage would need to be made yourself, but we can suggest those to whom you may wish to contact at various banks here in Gibraltar, in order to start the process of obtaining a mortgage. The legal work would commence on our side once you have a facility letter in place from your chosen lender.
If you are purchasing a property with a mortgage here in Gibraltar, we can assist by drafting the Deed of Mortgage and liaise accordingly with the bank and the Land Registry. Should you wish to sell a property of which you have a mortgage over that property, we can assist by drafting the Deed of Release of Mortgage and liaise accordingly with the lawyer for the purchaser, representatives of the bank and the Land Registry, where necessary. We can also assist should you wish to up-stamp/obtain a further advance in respect of your existing mortgage.
Stamp Duty payable on mortgage or further advance secured in Gibraltar are at the following rates, Mortgage over £200,000 or less at 0.13% and over £200,001 at 0.20%. Releases of Mortgage are calculatedly at 0.03% of the amount borrowed.
12. Can I retire to Gibraltar from UK after Brexit?
Yes, British citizens are allowed to live in Gibraltar without any type of residence permit. Should they wish to obtain a Civilian Registration Card, they would need to make an application to the Civil Status and Registration Office.
Brexit will not have an effect on migration laws for British Nationals and British Gibraltar Nationals wishing to move between both jurisdictions.
13. Does living in Gibraltar count as living in the UK?
No, Gibraltar is a UK overseas territory. Gibraltar is a self-governing territory with its own government that is independent in all matters other than foreign affairs and defence.