Purchasing property in a foreign country should never be a leap in the dark whereas if you are a local reading this page you may know that you are in the right place. As a responsible Real estate agency in Malta, we do our utmost to assist those seeking a holistic professional Maltese real estate service. One of the major strengths of being affiliated with an International franchise such as RE/MAX is the infrastructure and resources that we have available for our perusal. Our property consultants are exposed to the most comprehensive classroom and online training programmes in the industry and thus they are in a favourable position to provide you with the quality service that you deserve.
We ensure that buyers and sellers alike are updated with current market trends and provide up-to-date information and feedback transparency so that both will be in a position to make a knowledgeable decision. This approach has not only reaped fruit since we were established but has been a key element to building lifelong relationships with our customers. RE/MAX Malta is a company that purely believes in customer orientated methods.
The International real estate market is an ever changing landscape which over the last few years has seen a common decline in prices and trends throughout several markets. Thanks to the Maltese belief in traditions our real estate market has not suffered the same repercussions that other European real estate markets have succumbed to. The Maltese trust in brick and mortar is a key component to the stability of our market which has also been reaffirmed via recent survey reports conducted by the body that issues quarterly statistics for the EU.
Our buying procedure is simple and straight forward plus it protects both the vendor and the buyer unlike in some other countries where there may be jumping or outbidding. Just as most Maltese speak bilingually, legal documents may also be in either English or Maltese. We may recommend a Notary to you however you may also get advice from your own. Below please find a number of topics that may enhance your knowledge of the real estate market in Malta.
General Procedures and Costs
Once the immovable property has been selected and we have assisted you in negotiating the price as well as any special conditions duly negotiated and agreed upon an appointment is set to sign the Preliminary Agreement or what is commonly known as ‘Konvenju’. This is essentially an agreement binding both the purchaser and the vendor to conclude the transaction within an established date (term of Konvenju) subject to a set of conditions. On signing of the ‘Konvenju’, you will be required to pay 1% provisional stamp duty as part payment of the full 5% which the balance is due on signing of the final deed and an agreed deposit which is generally 10% in such circumstances. In the case of those purchasing their first immovable property, the stamp duty on the first €150,000 has been removed as a concession and calculated at 5% on the remaining balance of the property.
During the ‘Term of Konvenju’:
Notary Public carries out the necessary searches to verify the legal title and to ensure that there are no outstanding debts, hypothecs or liens on the property Purchaser is to complete all the special requirements e.g. organise bank loan, check on building permits, etc. as agreed upon with seller and stipulated in the konvenju Vendor will complete all special requirements e.g. complete the building, or finishing certain works etc. as agreed upon with buyer and stipulated in the konvenju.
During this time we can be called upon to assist in any queries the client might have. We have very good relationships with all the leading banks on the island and can therefore also assist you as the client in setting up meetings with the bank of your choice.
Once all the above has been completed by all parties concerned a date is set for the actual signing of the Final Deed. The venue of the signing will be held at the local bank’s legal offices in the case that one may be obtaining finance or either at one of the RE/MAX offices or at the office of the Notary Public. The final deed is read and agreed upon and the balances due will be paid accordingly. These are; balance of the selling price to the vendor; the balance due to the Commissioner of Inland Revenue for stamp duty as well as 1% Notary fees to the Notary Public.
Buying a Property in Malta as a second home/Non-EU Resident
If you are a foreigner to the European Union or if you are a Citizen of a European Union however the property you are purchasing is not for a prime residence in order to purchase a property in Malta there is a minimum price that one must pay for an apartment as well as for a house or a villa to be able to obtain an AIP (Acquisition of Immovable Property) permit which is granted by the Ministry of Finance and usually takes some 6-8 weeks. These prices are € 169, 205 for a house or villa and € 101, 551 (Lm43, 596) for flats or maisonettes.
Buying a Property in Malta as a primary residence
Citizens of all European Union member states, who have resided in Malta continually for a minimum period of five years at any time preceding the date of acquisition, may freely acquire more than one immovable property without necessity of obtaining a permit.EU Citizens, who have not resided in Malta for at least five years, but have the intention of purchasing their primary residence (take up residence in Malta), do not require a permit, under chapter 246, nor do they require a permit to purchase immovable property required for their business activities or supply of services.
Acquisition of Companies
A body of persons, other than a commercial partnership, established in, and operating from a European Union member state may freely acquire immovable property that is required for the purpose for which it has been set up as long as it is directly controlled by citizens of the European Union Member state who has resided in Malta continuously for five years. A commercial partnership established and operating from a European member state (therefore including Malta) may freely acquire immovable property that is required for the purpose for which it has been set up as long as such partnership is controlled by and at least 75% of its share capital is held by a person (or persons) who is a European Union member state citizen and who has resided in Malta continuously for five years. Any other body of persons requires a permit, which is only granted if the property is required for an industrial or touristic project or as a contributor to the development of the economy of Malta. Permission may be refused for the purchasing of property, which is considered to be of historical interest.
Income Tax/ Tax on Capital Gains
The good news regarding real estate in Malta is that our legal system does not impose wealth or property taxes, adding one more important advantage to buying property in Malta which at the time of preparation of this document this regime was structured as follows:
In cases where income is derived from activity generated directly through the employment of the immovable property itself. In other words if the property is rented out resulting in revenue being generated through this activity then this revenue will become subject to taxes which as foreign nationals will be subject to the (still) very favourable flat rate of 15%.
The tax structure set out for this eventuality although simple to follow is detailed to explain and does not really fall within the scope of this document. May we kindly direct you to the specific document which you will find at the end of this link for a full explanation of this structure.
Benefits of Buying Property in Malta
Resale of property is allowed Repatriation of full resale price, including profits after taxes, is allowed without complications; (for a comprehensive explanation of the tax structure please refer to the link mentioned above) Mortgages are available for property purchase by non-residents or non-Maltese citizens residing in the islands: – once permission is granted by Central Bank of Malta, you can borrow as much as you wish from the local banks within the established commercial conditions. You can rent out your property to third parties (some limitations do apply).
In summary, Citizens of an EU Member State enjoy the benefit that they can buy their first property in Malta without restriction. Permits are not required in most cases and when they are they are easily issued to all bonafide purchasers without any major requirements.
Typical assistance provided by a Property Homes property consultant
1. Identify the most suitable property according to the clients’ requirements and criteria, from our extensive database;
2. Organise and carry out viewings;
3. Follow up, continually assisting the client until the property has been selected;
4. Carry out negotiations with the Endeavour of obtaining the best market price and payment terms. Our office will also assist in organising the preliminary agreement (Promise of Sale or, as mare commonly known, Konvenju (where a Notary Public will be appointed either as chosen by the client or through our office. This document will bind both vendor and purchaser during the term required to carry out the appropriate searches to verify legal title and during which our associate, through our office, will remain available to offer any assistance required.