Buying your first property in Malta might feel overwhelming at times. With so many options it can be hard to know where to start. As one of the biggest decisions you will ever make, it's crucial to get it right.
Most first time buyers start out with a general idea of what they want and refine their criteria the as they go along. The challenge comes when it’s time to make a decision and narrow down the options.
To avoid wasting your time with options that don’t suit you, go for clarity as early as possible. You should begin the search for your first home with an idea of location, price and type of property. Sit down with your partner and ask questions like:
• What size of property do you need, not just now but also 5 years down the line?
• Which areas of Malta are you familiar with, and where would your prefer to live?
• What kind of amenities do you need close by? (Schools, shops, transport)
• Do you prefer a modern or traditional house?
• How many bedrooms do you need? Could you use a home office?
If you are struggling to answer these questions, you are in the early stage of the buying process.
If you already have an idea, more or less, of what you want then you are a ready buyer.
Tip: keep a spread sheet with details of properties you’re interested in and have viewed, together with other information such as agent’s name and number, website links, reference numbers - to keep everything organised.
Financing your first home
When it comes to buying your first home in Malta, it is common to get a bank loan as financing. You will need 10% of the purchase price to put down as a deposit. The rest of the funding is usually arranged as a bank loan. A visit to your bank will give you a clear idea of your budget. Many banks have online loan calculators that allow you to see an estimate of what you can afford as whole, as well as what monthly repayments to expect.
Your budget will be determined by your income, but do keep in mind that you will have other expenses related to buying property, such as notary's fees, utility bills and regular living expenses (find a full list of these fees on page 51). You will also be required to purchase life insurance to cover the value of the property.
First Time Buyers' Scheme
The First Time Buyers' Scheme has been offered by the government of Malta for many years, and was recently renewed to run for another term until 31st December 2019.
Under the First Time Buyers’ Scheme, no tax is charged on the first €150,000 of the price of the property. This means that first-timers can save €5250. Buyers purchasing their first residential property will only pay 5% stamp duty on the balance above €150,000 of the price of the property.
No tax is charged on immovable property (furniture) within the purchase.