Thinking of buying property in Malta? We guide you step by step to find and buy the best option for you, whether as an investment or as your dream home.
Buying a Property in Malta could be one of the most rewarding decisions you may take. Due to the importance of this decision, it is important to seek professional advice with regards to the procedures to be followed when buying and also to help you find what best suits your requirements.
Through the HOQ website, we offer a carefully selected portfolio of Villas for sale, as well as Apartments and Houses of Character and our Advanced Search tool, will make your search so much easier! This tool has been designed to allow you to easily enter your search criteria and find the ideal property that you are after. We are proud to offer the largest database of properties for sale in Malta, which is constantly updated and available throughout all of the office networks of the Frank Salt Real Estate Group. The consultants at Homes Of Quality are trained to assist you at each stage of your search and ensure that you find the right option in the best location and at the best value possible. We can start your search whilst you are still abroad by sending you potential lists of properties that are for sale. Our ultimate goal is to find the right listing for you and guide you through the process of purchasing it until the contract stage and beyond.
Once you find a listing in Malta, you would need to agree upon the price and purchase conditions. A promise of sale agreement would then need to be signed between yourself and the vendor and this is compiled by and signed in front of a notary public. Once this agreement is signed, both parties are bound by their conditions.
A deposit is normally paid by the purchaser on the signing of the promise of the sale agreement. This is usually held by the notary or the agent or the vendor. A payment of 1% of the purchase price is also paid and this is provisional stamp duty paid on the price of the property. The balance of the stamp duty is paid on the final deed of sale. If the purchaser does not sign the final deed for a reason valid at law, the norm is that the deposit shall be forfeited in favour of the vendor. Should there be a problem with title, etc. the deposit is refunded to the purchaser.
The promise of sale agreement normally has a validity of anything from three to six months, but this period is flexible and any term may be agreed between the two parties. The notary engaged by the purchasers would be responsible to carry out searches into the clear title of the option that has been selected, and also perhaps to apply for an AIP permit where applicable. If you find a listing within a Special Designated Area, there is no need for an AIP permit. EU nationals who purchase as their residence also do not need an AIP permit.
The final contract is signed in front of the notary within the agreed period as long as all conditions have been satisfied and as long as the title has been proven to be clear. On contract, the purchaser pays the final balance on the purchase price as well as the balance of the stamp duty. The vendor hands over the keys with vacant possession on contract.
As explained above, should an individual who is NOT a citizen of a European Member State find a property, the relative permit (AIP permit) in terms of Chapter 246 of the Laws of Malta from the Ministry of Finance would be required, unless the property being purchased is located in Special Designated Areas (SDA)
BUYING A SECOND HOME
Should a non-resident wish to purchase a second home or holiday home in Malta, this is possible subject to obtaining an AIP permit in terms of Chapter 246 of the Laws of Malta.
Should a non resident find a listing within a Special Designated Areas or should an EU citizen who has been resident in Malta for at least five continuous years find a listing to purchase (even if this is a second or third property, etc.), there is no need for an AIP permit. Similarly, should an EU citizen wish to purchase as their primary residence, no AIP is required.
If one of the spouses purchasing is an EU citizen and the other spouse is a non-EU citizen, the above exemptions still apply to the couple, and therefore no AIP permit would be required. There is another exemption should an EU citizen find a listing to purchase for the conduct of one’s business activity (for example a property investor purchasing a property as a rental investment) or for the supply of services by such person. In these cases, the intention must be declared on the deed of purchase.
Should you purchase with the required AIP permit, there are certain minimum property values that must be respected. These currently stand as follows: €121,792 for apartments and maisonettes and €202,929 for villas, townhouses and other property. These values are index-linked and therefore vary every year. An AIP permit costs €233 and is generally issued within 6 weeks of application. An AIP permit requires the property to be used for residential purposes and by the applicant and immediate family. This condition may be waived should one obtain a permit to rent the property.
When you find a property in Malta and purchase this with an AIP permit, a condition is normally tied to the permit whereby you may only acquire one property in Malta and Gozo. However, should you find one within a Special Designated Area, you may purchase as many units as you please. Also, should you wish to purchase a second, an exemption is generally granted with the condition that the first property must be sold.
EU CITIZENS WHO FIND A PROPERTY IN MALTA AND/OR HAVE LIVED IN MALTA FOR LONGER THAN 5 YEARS
Should an EU citizen find a property in Malta and wish to purchase this as their primary residence, then there is no need for an AIP permit. Similarly, should an EU citizen reside in Malta for a continuous period of at least five years, there is thereafter no need for an AIP permit when purchasing additional properties in Malta or Gozo.
SPECIAL DESIGNATED AREAS
There are a good number of luxury developments in Malta and Gozo that have been earmarked by the local authorities as Special Designated Areas (SDA). Within these developments, all restrictions that might normally apply to the purchase have been lifted. These developments are often located in the best seafront or central location in Malta and Gozo and offer top-end properties with added facilities that may include communal gardens, swimming pools, marinas, etc. as well as enhanced finishes and amenities. Also, they sometimes offer taller development heights. These Special Designated Areas include Portomaso and Pendergardens in St Julians, Tigne Point and Fort Cambridge in Sliema, Fort Chambray and Kempinsky residences in Gozo, Tas-Sellum Village in Mellieha, St Angelo Mansions at the Vittoriosa Marina, Ta’ Monita and Metropolis.
Any foreigner (EU and non-EU) who finds property in Malta or Gozo within a Special Designated Area may purchase any number of units without the need for an AIP permit. Properties acquired within these developments often also prove to be excellent rental investments.
ACQUISITION BY BODIES OF PERSONS
Should a body of persons find an item that they would like to acquire for the purpose that it has been set up (other than a commercial partnership), and should this body of persons be established in and operating from a European Union member state, then it may be freely acquired with the one condition that it must be directly controlled by citizens of a European Union member state who have resided in Malta continuously for five years.
Should a commercial partnership be established in and operating from a European Union member state (therefore including Malta), and should this commercial partnership find a listing that is required for the purpose for which it has been set up, then the it may be freely acquired 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 an European Union member state citizen and who has resided in Malta continuously for five years. In the case of any other body of persons, an AIP will be required a permit should they find real estate in Malta and wish to acquire it. The AIP permit will only be granted if it is required for an industrial or touristic project, and acts as a contributor to the development of the economy of Malta. Permission may be refused for the purchasing of a development which is considered to be of historical interest. In the case of any classification of the buyer (EU, Non-EU, etc), should one find a property in Malta and wish to obtain bank finance for the purchase, this is possible through any of the local banks and very favourable terms are normally offered.