The choice of which property to buy is probably one of the most important decisions you are ever going to make and thus necessitates a pain and stress free process. If you are planning to buy a permanent or temporary residence in Malta or Gozo, at Dhalia we want the whole experience to run smoothly and professionally for you.
It is important that you seek professional assistance from specialists, as we can guide you throughout the entire procedure and make you aware of your rights and limitations.
Before you start looking for immovable property you should consider the following:
• What size of property do you require for the immediate future?
• Where are you used to living, or where would you prefer to live?
• What services do you require? (transport, amenities, schools)
• How are you going to finance your purchase?
• What are your tastes? (modern or character property)
• What type of property do you like?
• How much are you ready to invest?
You should pay careful consideration to all these points and relate all this information to knowledge, prices, values, necessities and affordability.
Our experienced consultants can facilitate the whole process for you. Dhalia is the leading expert in the field and has been helping clients find the right property for since 1983. Your assigned property consultant should help you during the whole process and can offer you the best selection of properties which meet your requirements. As well as conducting negotiations on your behalf, the consultant will help you conclude a deal that is satisfactory for all parties concerned.
How do I go about purchasing an immovable property?
Once you have selected your property and an agreement has been reached with the owner, you should confirm the following before entering into a promise of sale agreement (convenium):
• Ground rent
• Extras included within the price
• Payment terms
• Works to be undertaken by the owner
• Term of Promise of Sale agreement
Once the above points are clear and agreed upon to your satisfaction, a notary public has to be appointed and the sale agreement drawn up. The Term of Promise of Sale agreement will contain all the relevant points upon which were previously agreed, namely:
- Ground rent
- Furniture, kitchen and any other movables included in the price
- Conditions agreed by the parties to the agreement within a stipulated time frame i.e. financing terms, building permit, architect’s approval etc.
- Deposit on account. It is normal practice for a sum equivalent to 10% of the purchase price to be paid as a deposit on account as a sign of goodwill by the purchaser and his/her intention to appear on the final deed of purchase. Kindly note that earnest (not deposit on account) is less binding as neither party can oblige the other to appear on the final deed of purchase. The penalty is limited to the sum of the earnest. Certain property developers might also request staggered payments.
- Term i.e. when the final deed shall be signed. By default, a promise of sale agreement without a term stated is valid for a period of three months
- The purchaser, vendor and property in question must be clearly identified in the promise of sale agreement
Promise of sale agreements have to be registered with the Inland Revenue department together with a provisional duty equivalent to 1% of the purchase price of the property being transferred. This provisional payment will be off-set against the final duty due on the contract sale, or refunded should the deal fail to materialize.
It is important to be aware that the deposit is forfeited in favour of the vendor if the purchaser does not appear on the final deed without a valid reason at law.
During the term of the promise of sale agreement the notary and the parties involved must fulfil certain duties and obligations, namely:
- The notary will carry out the related property searches and verifies the legal title as well as assures him/herself that there are no outstanding debts, hypothecs or liens on the property.
- The purchaser must honour all the respective conditions contained in the promise of sale agreement such as bank loan or building permit applications within the specified time frames.
- The vendor must honour all the respective conditions contained in the promise of sale agreement including finishing or refurbishing works within specified time frames.
When is the final deed signed?
The appointed notary will draft the final deed, prepares it for signature and will notify the respective parties. Once every condition included in the promise of sale agreement has been satisfied and all duties fulfilled, all parties will meet to sign the final deed. The normal procedure is as follows:
- If a bank loan is required for the purchase, the final deed is signed at the bank’s offices.
- The contract of purchase is read out and if all is in order will be signed by all the respective parties.
- The balance due i.e. the purchase price less any deposits paid on account is paid to the vendor.
- The parties concerned settle their respective expenses in relation to the purchase.
- Keys to the property are passed onto the purchaser.
- The notary public registers the contract with the Public Registry.
This information constitutes an overview of the process. As you will appreciate, certain cases may require more effort and knowledge due to the particular requirements of the respective case. Most clients purchase a property once or twice a lifetime whilst notaries and estate agents go through the motions on a daily basis.
Dhalia’s offices are spread around Malta and Gozo for your convenience. We are at your disposal for any information or advice you may need whether you are buying or selling your immovable property.
Expenses incurred when buying a property
3.5%* on the first €150,000 of the immoveable property contract price. This concession is applicable only to the purchase of a place of residence and subject to the purchasers not having other properties in their name.
5%* on the amount over €150,000 of the immovable property contract price or on the full price, in case the above concession is not applicable.
All foreign nationals pay 5% on the value declared on the final deed with the exception of EU citizens taking up residence in Malta, having sold their overseas properties and having the Malta property as their sole residence. In this case 3.5% shall be paid on the first €150,000 as stamp duty.
* Promise of sale agreements have to be registered with the Inland Revenue Department and 1% provisional duty is payable at this stage on the contract value of the property being transferred. The provisional duty is off set against the final duty due on the final deed, or is refunded in case the deal fails to materialise.
A Maltese notary is a publicly appointed official, who is responsible for conducting the relevant Public Registry searches, ensuring that the there are no issues with the property’s title and that the transaction is carried out according to Maltese law.
Approximately, 1% of the immovable property price is due as notarial fees. The notary is usually chosen by the purchaser. This amount may vary according to the volume of title research required.
On immovable property subject to ground rent, a recognition fee equivalent to one year’s ground rent is due upon signing the contract of sale. This fee is payable just once and is due to the owner of the said ground rent. A copy of the deed of purchase is also sent to the owner of the ground rent.