A new law is now in place in Gibraltar that taxes income from the sale of residential properties if a person owns three or more such properties, excluding their primary home and other exempted properties.                                                                                                                         

Who the Law Affects:

Anyone owning three or more "taxable properties" will have to pay tax on the income from selling any of these properties.

This includes properties held indirectly, such as through company shares.

Partial ownership also counts.

Definition of "Taxable Property":

Residential properties in Gibraltar, including off-plan properties.

Exempt properties include:

- Primary residence of the owner.
- Commercial properties or those mainly used for commercial purposes.
- Hotels.
- Properties unfit for living or needing major repairs, provided they are bought for development.
- Properties sold by the estate of a deceased person.

Effective Date:

The law applies from 1st August 2024.

Residency:

Applies to all persons, regardless of whether they live in Gibraltar or not.

Deductions:

No specific deductions have been mentioned; general rules apply, such as deducting purchase costs and improvement costs from the sales proceeds to determine taxable income.

No provision for adjusting these amounts for inflation.

Tax Rates:

Individuals resident in Gibraltar: up to 25%.

Companies: 15% (20% for fuel supply or utility companies).

Non-resident individuals: up to 39%, usually not exceeding 25% if they have other Gibraltar income.

Category 2 individuals: 39%.

Read the full Government Notice here.

If you’d like more information or personal advice about the changes to Gibraltar’s property taxes, please contact us at Gibro Group. Our team of tax and professional service experts can help you understand and manage these changes. Get in touch with us today to get the support you need. Contact enquiries@gibro.com today.