GIBRALTAR BECOMES INVESTMENT HOTSPOT AS ECONOMY SOARS

With its tax-friendly regime and stable property market, Gibraltar’s economy is expected to soar outside the European Union. Serena Templeton finds out why

A longtime a symbol of strength and solidity, Gibraltar the bite-sized powerhouse Churchill once referred to as “the motherland peninsula,” is proving itself so be something of a role model in the current unsettled economic climate.

Basking in wall-towall sunshine 300 days a year and less than three hours’ flying time from the UK, this tiny British Overseas territory on Europe’s southernmost tip is showing remarkable resilience with a robust economy with a GDP of over £1.5bn, which has more than doubled in the past decade.

A key factor in the country’s continuing success story is its diverse asset pool. A deep-water port and thriving tourism sector exploit Gibraltar’s natural resources, while a burgeoning finance centre and internet gaming industry have helped insulate this small jurisdiction from the vagaries of the global financial crisis, by ‘spreading the risk’; a cushion of resilience set to stand it in good stead as Brexit uncoupling plays out.

Home to a permanent population of around 30,000, a mix of British, French, German, Dutch and Scandinavians, the past few years have seen heightened interest from wealthy foreign investors looking to put down roots.

“We are attracting a new ultra-high segment, which is the clearest sign of confi dence from a new emerging market,” confirms Louis Montegriffo of agents BMI. “We have a healthy property sector, split sensibly amongst four tiers. Few finance centres or financial service jurisdictions can boast such a cross section of markets, catering for an array of demands from various profiles.

“This in our view once again shows the maturity of the market. Those buying their first property are eligible to claim £11,500 tax relief, which can be taken over one to ten years. First-time buyers also benefit too from a £4,000 home-purchase allowance offered to all who buy residential property there, although there’s no relief on investment purchases.”

Gibraltar’s wider tax system mirrors these advantages too as, Mike Nicholls of Chestertons Gibraltar explains: “There’s zero tax on interest earned on savings, while maturing insurance-based plans are paid gross with no tax liability. There’s also no capital gains or inheritance tax and VAT-free shopping. Even corporation tax is low at just 10%.”

While a state-of-the-art airport has played its part in boosting tourism traffic, pump prime funding from private sector developers is also proving a lucrative investment vein with many Victorian buildings including hospitals and former army barracks being coaxed back to life and remodelled as luxury boutique housing, with a growing stock of contemporary townhouses and designer duplexes weaving their way into the real estate mix.

Average prices while appreciably higher than neighbouring Spain are also forecast to continue – a growing population contained within five compact square miles which, local agent Stephen Berry explains, is helping to keep demand high and supply tight: “Turnkey two-bedroom apartments in flagship waterfront developments such as The Sails and Kings Wharf start from a substantial £530,000, with three-bed penthouse units from £690,000. Property near one of the two marinas is always in demand. People like a frontline location and are prepared to pay a premium to secure it.”

Local banks are also continuing to lend at competitive prices: Adds Berry: “There’s no sub-prime market, selfcertified mortgages have never been available and buy-to-let mortgages require significant deposits. The potential of holiday letting is promising, too, with tourist numbers passing the 2m mark in 2018, and rental yields averaging 5-8%.”