|
|
|
|
|
|
|
We are proud to offer a careful selection of properties throughout the Maltese Islands. Our aim is to present you with the best value quality homes and investments to suit your requirements. We look forward to servicing your needs.
|
|
|
|
BUILT ON A TRADITION OF QUALITY SERVICE SINCE 1969
|
|
|
|
|
|
|
|
|
Procedures for Buying
|
|
|
|
|
Once a property has been decided upon and price and conditions have been agreed, a convenium/preliminary agreement is signed between the vendor and purchaser. This agreement binds both parties to sell/purchase the immovable property under the terms and conditions agreed upon. The signing of the final deed is, however, always subject to good title being proved and the issue of any relative permits to purchase. The agreements and contracts are written in English.
On signing the preliminary agreement, a sum equivalent to 10% of the price is lodged with the agent or notary public as stake-holder. This deposit will be forfeited in favour of the vendor should the purchaser fail to complete the final deed of transfer for no valid reason at law.
The agreement is usually valid for three months (term prescribed by law) or as mutually agreed by the parties. During the period between the signing of the preliminary agreement and the signing of the final deed of sale, Notary Public engaged by the purchaser will carry out the necessary researches into the property to confirm good title, as well as submit the application to purchase to the Ministry of Finance if necessary.
Once the relative permit has been issued and researches have proved clear title to the property, the final contact of sale may be entered into, the deed of sale being drawn by purchaser’s Notary. The balance of the purchase price and stamp duty plus legal expenses are paid on the signing of the contract when vacant possession to the property is handed to the purchaser. (1% of the stamp duty due is payable on the signing of the preliminary agreement.)
Expenses connected with the acquisition of property:
Stamp Duty 5%
Notarial Fees 1% (approx.)
Searches & Registration € 233 (approx.)
Ministry of Finance fee € 233 (approx.)
N.B. The above expenses are the liability of the purchaser, while brokerage fees due to the estate agency are borne by the vendor.
|
|
|
Individuals who are NOT citizens of a European Member State may acquire immovable property after they obtain the relative permit in terms of Chapter 246 of the Laws of Malta from the Ministry of Finance.
|
|
|
Citizens of all European Union member states, including Maltese, who have resided in Malta continuously for a minimum period of five years at any time preceding the date of acquisition, may freely acquire more than one immovable property without the 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 i.e. 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.
|
|
|
Citizens of all European Union member states, including Maltese citizens, who have not resided continuously in Malta for a minimum period of five years, require a permit under chapter 246 of the Laws of Malta to acquire immovable property for secondary residence purposes i.e. holiday homes.
The relative permit will be issued usually within 6 weeks, under the following terms and conditions:
a) The value of the property purchased must be above Lm39,720 (€92,523), in case of apartments/maisonettes and Lm66,200 (€154,205) in case of houses. These values are index linked and thus are subject to revision annually.
b) The property has to be used solely as a residence by the applicant and his family. This condition will be waived once the applicant obtains the relative permit to rent the property (See Letting your Property).
c) The immovable property purchased may not be sold or otherwise converted into more than one dwelling house.
The above mentioned individuals may only own one property in Malta and Gozo (except in special designated areas where one may purchase more than one property). Once these applicants have purchased a property in Malta and wish to acquire another one after having sold the first one, they may do so after obtaining permission from the Ministry of Finance. Applications for permission to acquire another property are normally favourably considered. Permission will be granted subject to the first property being sold.
Special Designated Areas
These are normally large developments, where all conditions for purchasing property have been waived and non-Maltese may buy more than one unit and they may also buy in the name of a company, trust, etc.
|
|
|
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 a European Union member state who have resided in Malta continuously for five years.
A commercial partnership established in an operating from a European Union 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 will require 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 a property, which is considered to be of historical interest.
Mortgage facilities are available for the purchase of property from all banks in Malta, subject to status.
|
|
|
There are no restrictions on owners to sell their property at any price. The entire sale price including sale proceeds of movables may be repatriated abroad, in which case, the Notary would apply for clearance from the local tax authorities, prior to signing the final deed of sale.
Capital Gains Tax
Tax on capital gains may be charged on the sale of the immovable property.
Capital gains tax is not charged when the property being transferred has been the owner’s own residence for at least 3 consecutive years immediately preceding the date of transfer and has been disposed of within 12 months of vacating the property.
If the property is sold within 5 years from date of acquisition, the vendor has the option to choose to be taxed (1) a capital gains tax based on gains realised after taking into consideration the cost of purchase and sale, as well as any improvements carried out on the property or (2) a final withholding tax equivalent to 12% of the sale price of the immovable property.
If the property has been owned by the vendor for a period exceeding 5 years, capital gains tax is charged at a final withholding tax rate of 12% of the sale price of the immovable property.
Capital gains tax on the sale of the property acquired through inheritance (Causa Mortis) is charged at the rate of 12% on the excess of the transfer value over acquisition value as declared in the deed of Causa Mortis. If the property was inherited before the 25th November 1992, the rate of tax will be equivalent to 7% of the transfer value.
In cases where capital gains may be due, with the assistance of our Tax Consultants we may apply to the Commission of Inland Revenue for a reduction in the tax due, through the submission of the relative tax return and a detailed account of all expenses incurred in the acquisition and sale of the property.
Repatriation of Sale Proceeds
Following the signing of the final deed of sale, Homes of Quality Ltd., will be able to immediately repatriate the sale proceeds to vendor’s account overseas. Furthermore, through arrangements with leading foreign exchange brokers and financial institutions, we shall be able to secure the most favourable rates of exchange prevailing at the time. Every effort will be made to expedite the transfer of funds to the vendor’s account.
|
|
|
Owners of property may rent their property as long as letting license is obtained from the Ministry of Tourism. License will be issued once the property meets first class standard requirements or consists of a villa with a pool. Properties may be rented under a long let or holiday license.
For details of license fees and application forms please visit Malta Tourism Authority website: www.mta.com.mt
Lessors would have to register with the VAT and Income Tax Department.
Tax Implications
Income derived from the letting of immovable property can be of two types – investment income and income derived from a trading. Typically, the difference between the two is distinguished by whether the rental agreement is for short periods (usually for furnished premises for a few weeks or months) or for long periods.
The tax deductions taken against these two types of rental income is different. Any expense incurred in the production of income derived from trading rental income is an allowable tax deduction, given that upon demand, the taxpayer would be in a position to present to the Inland Revenue Authorities supporting documentation.
In the case of rental income derived from long lets where the rental activity is not a trade, the allowable deductions are (1) the MTA license fees if any, (2) ground rent and rents payable on property rented out, (3) any interest incurred on a loan specifically taken to finance the purchase (and perhaps the renovation) of the property from which rental income is derived, and (4) a further deduction equal to 20% of the rental income received less rents and ground rents payable and less the MTA license fees.
Rental Income will be charged as follows:
Tax Rates for Residents:
"Married" Rates
|
First
|
Lm 4,500
|
(€ 10,482)
|
Nil
|
Next
|
Lm 3,500
|
(€ 8,153)
|
15%
|
Next
|
Lm 2,000
|
(€ 4,659)
|
25%
|
Remainder
|
Over Lm 10,000
|
(€ 23,294)
|
35%
|
|
"Single" Rates
|
First
|
Lm 3,250
|
(€ 7,570)
|
Nil
|
Next
|
Lm 2,250
|
(€ 5,241)
|
15%
|
Next
|
Lm 1,250
|
(€ 2,912)
|
25%
|
Remainder
|
Over Lm 6,750
|
(€ 15,723)
|
35%
|
|
Tax Rates for Non-Residents
(Married and Single)
|
First
|
Lm 300
|
(€ 699)
|
Nil
|
Next
|
Lm 1,000
|
(€ 2,329)
|
20%
|
Next
|
Lm 2,000
|
(€ 4,659)
|
30%
|
Remainder
|
|
|
35%
|
|
Through our Letting and Property Management Department, we provide an extensive service to landlords, includeing applying for the necessary letting licenses, preparing the property to meet MTA standards, organise an inventory, collection of rents, payment of bills, as well as general management and maintenance of the property throughout the year. We can handle just about every crisis with minimum fuss and expense while ensuring that you achieve the highest return for your property.
|
|
|
|
|
|
Homes of Quality, 201, Tower Road, Sliema SLM1602, Malta
Tel: 00356 2342 0000 UK Tel: 0044 0 871 711 8994 Fax: 00356 2137 4166
|
|
email: info@homesofquality.com.mt
|
|
|
|
|
|
