Buying Property in Malta

If you are considering purchasing a property in Malta we recommend visiting our sister website www.Belair.com.mt where you will be able to find a large selection of both commercial and residential properties.

The Belair Property Group aims to make your move as smooth and simple as possible. Our dedicated team of property consultants are fully trained to guide you through every step of the way.

There are a number of steps involved in purchasing real estate in Malta, some of which will apply to you and some others might not. For example, there are more rules that apply to foreigners purchasing property in Malta than to the Maltese. Then there are more rules still for non-EU nationals that wish to buy. We can help guide you through these rules and regulations throughout your property search.

Our large property portfolio includes all types of apartments & penthouses, villas, character properties, lifestyle developments and commercial property. Our team works hard at keeping it continuously up to date, ensuring that our clients are always kept informed of interesting opportunities. So, be it the perfect family home or apartment or even the right office for your growing business, Belair Property is well prepared to deal with any request.

Our dedicated teams within the Belair Property Group are managed by leading individuals with many years of experience where, the directors take an active role in the day to day management of the company. We help our people fulfil their true potential.  We share success and we reward achievement. We retain the best people and we don’t strive to be the biggest, just the best.

We look forward to being of service.

If you are interested in purchasing a property in Malta we also recommend that you visit our sister website www.belair.com.mt wherein you can find a large selection of Commercial or residential properties on offer. Having selected the property you would like to buy and having agreed the price and the terms and conditions, we are still here to guide and advise you throughout the process.

The ‘Promise of Sale’ (also known as the ‘Konvenju’) is held at the Notary of your choice. The Promise of Sale agreement is then drafted based on the terms and conditions agreed upon and signed by both parties in the presence of the Notary.

A deposit usually equivalent to 10% of the sales price is paid upon signing of the ’Promise of Sale’ and is (in the majority of cases) held by the Notary (unless otherwise agreed).

The Notary then conducts the necessary property searches and obtains the necessary documentation to satisfy the legal requirements of both parties. During this time, we recommend that an architect visits the property to ensure that it is in good structural condition and that all planning permits are in order.

If you require a bank loan to proceed with the purchase, you should visit the bank and take a copy of the ‘Promise of Sale’ together with any relevant documentation for the application to be processed. It is also advisable to hold discussions regarding possible bank finance or home loans with the banks prior to the signing of the ‘Promise of Sale’. Belair Property has very strong connections with all the leading banks and our team can introduce you to all major banks when necessary. (Note: When a bank loan is being applied for, a clause in the ‘Promise of Sale’ is usually included, where the agreement is ‘subject to bank finance being approved’, usually for a limited number of weeks.)

Once the notary’s searches, architects report and bank loan (if applicable) are all in place and approved, you as the purchaser can then appear on the final deed, where funds are exchanged, and the keys are handed over. Legal fees vary according to what is required in terms of searches, bank loans, etc. The usual rate is between 1% and 2% of the sale price but this can change depending on each and individual case. The following link provides useful information on the expected fees due to the Notary on final deed. https://www.notariesofmalta.org/

Property in Malta has always been a good investment and a great idea for a place to live. Malta offers a vibrant lifestyle, rich culture, excellent weather and a reputation for hospitality.

Numerous initiatives taken by the authorities over the years, have allowed Malta to offer various tax advantages directed towards foreign businesses, professionals and retirees, making Malta a tempting destination. This in turn has contributed to an increase in demand for property rental, making Malta more attractive in terms of property investments, securing a moderate capital growth even in the worst of times.

Having selected the right property, agreed on the price and the terms and conditions of acquisition, one would then move ahead to sign what we refer to as a ‘Preliminary agreement’ (or a ‘Konvenju’ in Maltese). The process of purchasing a property in Malta is basically a three step procedure.

Step 1:

Appointing a Notary Public to act on your behalf. Our trained staff can assist in recommending an established and reputable independent Notary able to assist the purchaser in the acquisition.

A Notary undertakes to provide a number of services, namely:

• Drawing up of the Promise of Sale Agreement and registration thereof;
• Examination of title of the Property in terms of L.N. 355/2012 (Examination of Title Regulations 2012) to verify clear legal title, confirming that there are no outstanding debts, hypotecs or liens on the property;
• Publication, enrollment and registration of the public deed of sale;
• Anything reasonably required for attainment of the above purposes and ancillary thereto.

Notarial fees are regulated by law and largely depend on the property and the work associated with establishing its root of title. These can be estimated using the bill calculator available here – https://www.notariesofmalta.org/members/calculators/bills/

Step 2: Signing of a Preliminary agreement (otherwise known as ‘konvenju’).

At this stage the buyer commits himself/herself to purchase the property in question and in turn the seller commits himself/herself to sell the property. A preliminary agreement is normally valid for a minimum three month period unless otherwise agreed between the two parties and in general a sum equivalent to 10% of the purchase price is paid by way of deposit on account of the price to secure the eventual transfer of the property. In most cases the deposit is held by the Notary on behalf of the buyer and transferred to the seller on final deed of sale once the root of title has been satisfactorily established.

Step 3: Deed of Acquisition

Once the Notary public has established the root of title and carried out the necessary public searches to confirm that the property is free and unencumbered, the Notary is then able to produce the final deed of sale which is to be signed by both parties in his/her presence. The balance due on the property i.e. purchase price less the deposit already paid on signing of the preliminary agreement is then paid to the vendor. At this stage transfer of ownership of the property has taken place and the notary will then register the contract of sale with the public registry for future reference and proof of title.

Non Maltese nationals require an AIP (Acquisition of immovable property by a non-resident) permit to be issued by the local authorities prior to purchasing a property in Malta. This permit seeks to ensure that the purchaser is a person of good standing and is obtained by the notary once the preliminary agreement has been signed. This restriction does not apply to properties located in areas termed Special Designated Areas or to EU citizens when purchasing property which is to serve as their primary residence.

Where one of the spouses is an EU citizen and the other spouse is a non-EU citizen, both can likewise benefit from the exemption outlined above and acquire property without the necessity of obtaining an AIP permit, provided the acquisition is being made to establish therein their primary residence.

In the event that an AIP permit, the property must satisfy a certain minimum value as follows:

• €136,972 for apartments and maisonettes and
• €236,582 for villas, townhouses and other property. These values are index-linked and thus may be subject to revision annually.

Latest update (June 2020):

All Non-EU nationals holding LONG-TERM RESIDENT STATUS in Malta, do not require an AIP and are free to purchase one or more properties of their choice. Successful applicants can now benefit from all the Government concessions which an EU member can benefit from in relation to reductions in stamp duty as well as property tax (refer to Buying procedures local for a guide to acquisition tax).

Special designated Areas

As mentioned above a property situated in what is termed as a Special Designated Areas (SDA) does not require an AIP permit when acquired by a foreign national and this irrespective of whether that person is an EU national or not.

Under normal circumstances a foreign national may only own one property in Malta and Gozo however, this condition does not apply when the property is situated in an SDA.

Purchasing a property within an SDA provides certain benefits to foreign nationals, namely:

• the option to purchase an unlimited number of units under one name;
• the option to rent out to third parties;
• no requirement for an AIP permit

Duties and Taxes

Stamp duty: When acquiring a property, the purchaser is to settle stamp duty fees amounting up to a maximum of 5% of the purchase price. This fee is paid in two stages being:

• 1% of the purchase price is paid to the Notary on signing of the preliminary agreement. This fee will be passed on to the Inland Revenue and a subsequent receipt will be issued confirming payment.
• The balance of 4% of the purchase price is to be paid on the date of the final deed and handed over to the Notary for onward registration with the Inland Revenue. A full receipt will be issued by the IR Commissioner once the funds have cleared.

It is important to note that Stamp duty is only charged on Immovable Property. In the event, that the property being sold includes furniture and fittings these may be quoted separately in the final deed of sale. Therefore, no Stamp Duty is payable on any movable items (furniture and fittings) being transferred together with the immovable property.

When the property being purchased is to be used as purchaser’s ordinary place of residence, stamp duty is charged at:

• 3.5% on the first € 150,000 of the purchase price and
• 5% on any amount over €150,000.
• However, for any other property purchase, Stamp Duty is charged at 5% on the total value of the property.

Bank Loans

If you require a bank loan to proceed with the purchase, then once the ‘Promise of Sale’ is signed you should visit the bank and take a copy of the ‘Promise of Sale’ together with any relevant documentation for the application to be processed. It is advisable to hold discussions regarding possible bank finance or home loans with the banks prior to the signing of the ‘Promise of Sale’. Belair Property has very strong connections with all the leading banks and our team can assist you with the obtaining of home loans when necessary. (Note: When a bank loan is being applied for, a clause in the ‘Promise of Sale’ is usually included, where the agreement is subject to bank finance being approved, usually for a limited number of weeks.)

The government announced temporary fiscal incentives for both property buyers and sellers, as part of a COVID-19 economic recovery package.

Reductions on Stamp duty on acquisition and tax on sale are applicable

• where a 5% stamp duty rate was previously applicable, this has now been reduced to 1.5% on the first €400,000 in value;
• Schemes that are currently in existence, such as First Time Buyers and Urban Conservation Areas (UCA), can be used in conjunction with this rate of stamp duty. (Legal notice 240/2020)
• Sales tax reduced from 8% to 5%;

These new measures apply to transfers of immovable property made on or after the 9th June 2020, but before 30th July 2021. These transfers will qualify for the reduced rates if the notice of the final deed of transfer is given to the Commissioner of Inland revenue by the 31st January 2022.

Acquisition of Property by a Group of Persons or a Company

A company which has been established in the European Union may freely purchase an immovable property in Malta to conduct its business. This applies as long as, the purchasing company is controlled by Citizens of an EU member state who hav resided in Malta for five consecutive years.

On the other hand, a Commercial Partnership which has been established in and is operating from an EU member state (includes Malta) may freely acquire immovable property to carry out its business as long as, 75% of the share capital of this partnership is controlled by a person (or persons) who is a citizen of European Union member state and who has resided in Malta continuously for five years.

If you are interested in purchasing a property in Malta we would also recommend that you visit our sister website www.belair.com.mt wherein you will find a large selection of both Commercial and residential properties.