Hills Properties - Real Estate in Gibraltar & Spain

219 Main Street, Gibraltar
Email: info@hills-properties.com
Tel: (+350) 20050605
Fax: (+350) 20052031

Taxation and Residency

CAT II

Click here to see Cat 2 Properties

Qualifying (Category 2) Individual status limits the amount of tax payable in Gibraltar by individuals in respect of monies remitted to Gibraltar up to a maximum of £60,000 taxable income, regardless of the actual world-wide income of the individual.

The maximum tax payable by a Category 2 Individual is £20,000 and the minimum is £18,000.

Applying for Category 2 individual status involves an application for Tax Status and an application for Gibraltar residency. The following items are required in support of a category 2 application:

A detailed curriculum vitae;
A property purchase agreement or rental contract on a property which qualifies as a cat 2 property;

A reference letter from an accountant/lawyer or banker confirming the individual’s assets of £2million;

A further reference letter from a different person with the above stated qualifications, confirming the number of years the applicant has been known to them and that he is of good standing, trust and repute

A non-refundable application fee of £1,000;
2 passport sized photos; and
a copy of a private medical insurance policy covering applicant in Gibraltar.

A lawyer would ideally handle the above procedure on behalf of an individual interested in obtaining such status.

Further to the above, there are no capital gains taxes operating under Gibraltar Law. When a property is sold, all profit is free of taxation except in the case of a company which sells as part of its trade.

Key Benefits

Maximum tax payable on all income, wherever it is generated, is approximately £20,000

No capital gains tax

No wealth tax

No inheritance tax / death duties

Property Purchase in Gibraltar

If you are considering purchasing a property in Gibraltar, there are a number of issues that should form part of your thought process:

LEASEHOLD PROPERTY

The Gibraltar Government owns the land in most modern developments in Gibraltar.

Typically, the Government grants a lease to the company developing a particular plot of land for a term of 150 years. The development company then sells each apartment on the land to third parties for the term less seven days.

Freehold property does still exist in Gibraltar but such properties are rare. In the event that you are considering purchasing a freehold property, it is recommended that you seek legal advice before placing a deposit because the title history to such properties is complex.

In most leasehold purchases, the estate where the property is situated is managed by a management company. The Purchaser of the property will ordinarily be required to pay service charges on a quarterly or half yearly basis to the management company.

STAMP DUTY AND LEGAL FEES

The Stamp Duties Ordinance 2005 recently came into force in Gibraltar.
Under the new legislation, stamp duty is payable on the purchase price of properties as follows:

STAMP DUTY

Where the Property Value does not exceed £160,000.00	Zero
Where the Property Value exceeds £160,000.00 but not £250,000.00	1.26%
Where the Property Value exceeds £250,000.00 but not £350,000.00	1.6%
Where the Property Value exceeds £350,000.00	2.5%

STAMP DUTY ON MORTGAGE

For £200,000.00 or less	0.13%
For more than £200,00.00	0.20%

LEGAL FEES