The purchase of a property in Malta
The purchase of a property may be considered as one of the hardest decisions, regardless of whether the property is being purchased to serve as home, or simply an investment.
Property in Malta can be divided into six residential categories: Apartments, Maisonettes, Terraced houses, Villas, Houses of character and Farmhouses. It would be recommended to consider the following areas before the purchase of a property:
- Where would you prefer to live?
- What type of property would you like?
- What size would suit your requirements?
- Would you prefer to live in a modern home or in traditional one instead?
- Which services and amenities would you require?
- What is your budget?
- How is the purchase going to be financed?
EU citizens are permitted to purchase primary residence, as well as an immoveable property, without permit. In case of acquiring the property as a secondary residence, EU citizens who have not resided in Malta for a minimum period of five years, require a permit. Non-EU Citizens wanting to buy Maltese property must acquire an acquisition of immovable property permit.
Moreover, in order to be able to acquire Maltese property, the prospective buyer must be able to prove that the funds to be used have been remitted from abroad. A certificate from the applicant’s bankers confirming this criteria and the ability to remit the minimum stipulated amount to Malta, is required. Other documents include police or judicial conduct of certificate issued from the authorities of the residents’ country, copy of birth certificate of applicant, copy of marriage certificate if applicable, three passport sized photographs of the applicant and copy of deed of purchase or rental agreement if the property is already acquired.
Once all the requirements are settled, next step is to contact the seller or estate agent. On finding the right property and reaching an agreement on the purchase price with the owner, a preliminary agreement is signed between the vendor and the purchaser. This Preliminary Agreement binds both parties to purchase/sell immovable property under the terms and conditions agreed. Upon signature of the contract, the buyer pays 10% of the selling price as deposit. One percent stamp duty must also be surrendered to the notary public for registration of the purchase agreement and payment to the Commissioner of Inland Revenue.
The purchase agreement is usually valid for three months and during this term, the notary will perform due diligence to prove authenticity of ownership. When this has been accomplished, the Final Deed is prepared for signing of both parties. The balance due on the selling price and stamp duty must be paid upon signing. This signals the conclusion of the sale.
Buying a property in Malta holds an array of advantages, such as:
•Resale of property is allowed.
•Repatriation of full resale price, including profits is allowed without any complaints.
•Mortgages are available for property purchased by Non-residents or Non-Maltese citizens residing on the island.
•Renting out of property purchased is allowed if it is worth in excess of €232,937 and if registered as holiday accommodation with hotel and Catering establishment
•Short lets only and tax payable on all rental income (15%)
.