Gib property: solid as the Rock Investors with £2m net assets who buy an approved property for their exclusive residential use and haven't lived in Gibraltar within five years may qualify for the prestigious Category 2 status, resulting in paying no greater than £29,800 on their worldwide income. Those buying their first property are also eligible to claim £11,500 tax relief, which can be taken over one to 10 years. First-time buyers 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, Mark Makey of Century21 Gibraltar explained: "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 per cent. While the opening of new state-of-the-art airport last year played its part in boosting tourism traffic, pump-prime funding from a consortium of private 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. A growing stock of contemporary town houses and designer duplexes are also 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 explained, 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 £600,000, with three-bed penthouse units from £690,000," he said. 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. Berry added: "There's no sub-prime market, self-certified 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 11 million mark in 2012, and rental yields averaging 5-8 per cent.