Leasehold Ownership
Most properties in Gibraltar are sold on a leasehold basis, typically with lease terms ranging from 99 to 150 years. In some cases, leases can be extended beyond their original terms. Leasehold ownership means that while you own the property for the duration of the lease, the land on which it stands remains under the ownership of the Government of Gibraltar or another freeholder.
In rare occasions some deregulated pre-war properties have been issued new leases at 999 years, meaning they will never be an issue. Such as this beautifully maintained 3 bed on Armstrong's Steps at just £375,000 which will never need extending in yours or your childrens, or their childrens' etc lives!
Leasehold properties in Gibraltar often involve service charges and ground rents, particularly in apartment complexes or developments with shared amenities. These charges cover maintenance of common areas, security, and other services.
Leases can be issued directly from HMGoG (effectively the freeholder) or there can be a separate freeholder who owns the land or head-lessor who leases the land from HMGoG and issues underleases to the individual property owners.
Not all leaseholds carry service charges either. Often if the property is (what could be referred to as) a "stand-alone-house", ie not a flat in a block, then there are no communal areas to be maintained and therefore the leaseholder takes full responsibility for themselves. For example, this end of terrace house in Hospital Ramp is leasehold, but as a house on it's own plot, there are no service charges levied.
Freehold Ownership
Freehold ownership means owning both the property and the land it stands on outright, without any time restrictions. In Gibraltar, freehold property ownership is rare because most land is either government-owned or held under long leases by private developers or corporations.
However, there are exceptions where freehold properties do exist. These tend to be older buildings, specific commercial properties, and a handful of unique cases where private landowners hold freehold titles.
Can You Buy Freehold Property in Gibraltar?
While it is possible to buy freehold property in Gibraltar, it is highly uncommon. The main reasons for this include:
1. Government-Owned Land – The Government of Gibraltar controls most of the land and typically grants long-term leases rather than selling freehold.
2. Land Scarcity – Gibraltar is only 6.8 square kilometers in size, meaning land availability is limited, making leasehold arrangements more practical for managing urban development.
3. Existing Leasehold Structure – Since the majority of property transactions involve leasehold, the market is structured around this model, and financing options (such as mortgages) are generally aligned with leasehold properties.
Where Can You Find Freehold Property in Gibraltar?
Although rare, there are a few instances where freehold properties are available in Gibraltar:
Older Colonial-Era Properties – Some historic buildings in Gibraltar were originally sold as freehold and may still retain this status. Such as this stunning family home on Cumberland Steps, believed to be the lowest priced, single-dwelling freehold on the market.
Commercial Freeholds – Some businesses, particularly in the retail and industrial sectors, own their premises outright.
If you are interested in buying freehold property in Gibraltar, get in contact with us at Richardsons, as opportunities are limited.
Extending Leasehold Terms
If you own a leasehold property in Gibraltar and wish to extend your lease, you may have options depending on the lease agreement and negotiations with the freeholder. Leases are always extendable by contacting the freeholder or LPS if the lease is issued striaght from HMGoG.
Although HMGoG is not bound to follow UK guidelines on the costs of lease extensions, they are used as a good giude for reference. For a ballpark figure, this lease extension calulator issued by the UK Ministry for Housing, Communities and Local Government is a useful tool.
Legal Considerations for Property Buyers in Gibraltar
When purchasing property in Gibraltar, whether leasehold or freehold, several legal and financial considerations come into play:
1. Legal Process
Buyers typically engage a Gibraltar-based solicitor to handle conveyancing and ensure that the property has clear title.
Leasehold purchases require reviewing the lease terms, including remaining years, ground rent, and service charges.
2. Financing & Mortgages
Local banks in Gibraltar provide mortgage financing, often requiring a minimum deposit of 10-30%.
Mortgage terms and interest rates vary depending on the leasehold term remaining.
3. Stamp Duty & Taxes
Stamp duty applies to property purchases, calculated based on property value.
If the purchase price is below £200,000, stamp duty may be waived for first-time buyers.
Our stamp duty calculator will help you work out what your tax liabilitoes could be.
4. Residency & Ownership Restrictions
There are no specific restrictions on foreign ownership, but certain developments are reserved for Gibraltarian residents.
Conclusion: Can You Buy Freehold in Gibraltar?
While it is technically possible to buy freehold property in Gibraltar, it is rare. Most transactions involve leasehold properties, with lease terms ranging from 99 to 150 years. If you are specifically looking for a freehold property, you will need to explore limited options, such as older historic buildings or commercial properties.
For most buyers, the leasehold structure in Gibraltar offers a secure and practical way to own property, with lease extensions often available. If freehold ownership is a priority, working with an experienced local real estate agent and legal advisor will be crucial in identifying opportunities.
Disclaimer: This article is for interest purposes only and does not constitute legal advice