Below you will find answers to the questions we get asked the most.
What is the 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 €175,000 of the price of the property.
This means that first-timers can save €6125. Buyers purchasing their first residential property will only pay 5% stamp duty on the balance above €175,000 of the price of the property.
No tax is charged on immovable property (furniture) within the purchase.
How does home financing work?
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. You will also be required to purchase life insurance to cover the value of the property.
What is the process of buying property in Malta?
After you have found the right property, viewed it, and your offer has been accepted by the seller, the process of purchasing the property begins.
Promise of Sale (also known as Preliminary Agreement or Konvenju in Maltese)
Final Contract of Sale
What is the Promise of Sale?
The Promise of Sale is a document drawn up by a notary which sets down the terms of the sale, including:
Ground rent (if any)
Any works to be undertaken by the owner
Any extras included in the price, such as furniture
Date of the final contract (usually 3 months after the Promise of Sale)
Any additional terms
What professional services are required when purchasing property in Malta?
When purchasing property, you will need the services of trusted professionals to get the process done correctly. Choosing the right professionals will save you time and money, while also ensuring you don’t find problems further down the line.
The architect will inspect the property and make sure there are no irregularities, structural issues, and that everything is up to standard. Your architect will also be able to provide you with a valuation of the property.
Your notary will draw up the contract and make sure that the seller is legally allowed to transfer the property, and that there is no obligation upon it. The notary will also register the sale with the Public Registry.
An estate agent will help you to find the right property and negotiate the price with the seller. Your agent will also advise you on how to go about the legal obligations involved and can suggest other professionals.
What is the Energy Performance Certificate?
When buying property in Malta, the law requires that the seller presents an energy performance certificate to the buyer. This document informs the buyer about the energy performance of a building. Certificates are prepared by a qualified assessor who is registered with the Building Regulation Office. The certificate is valid for 10 years, unless there are significant changes made to the building.
What kind of Tax is there for Expats?
People who are residents with non-domicile status, with income of €35,000 or more annually arising outside of Malta which is received in Malta, must pay a minimum of €5000 in tax. Regular tax rates apply to those with an income of less than €35,000 per year.
What is the Acquisition of Immovable Property (AIP) Permit?
Any non-Maltese national purchasing property in Malta which will not be their primary residence will require an AIP permit.
EU citizens purchasing property in Malta as their primary residence do not need an AIP permit.
If an EU citizen has resided in Malta for more than 5 years, then they will not require an AIP permit, whether this will be their primary residence or not.
If an EU citizen is purchasing property in Malta as a second home (and therefore not as a primary residence), then they will require an AIP permit.
The minimum property values are:
Any other property €202,929
These values are subject to change according to the Property Price Index.
A fee of €233 is charged per permit, and the permit is usually issued within 35 days.
What are Special Designated Areas (SDAs)?
When buying property in an SDA, the AIP permit is not necessary. Anyone may buy property in Malta within special designated areas, without restrictions or permits.
The current special designated areas are:
City Centre, St Julian’s, Malta
Southridge, Mellieha, Malta
Portomaso Development, St. Julians, Malta
Tigné Point, Tigné, Malta
Tas-Sellum Residence, Mellieha, Malta
Madliena Village Complex, Malta
Shoreline & SmartCity, Malta
Fort Cambridge Zone, Tignè, Malta
Ta’ Monita Residence, Marsascala, Malta
Pendergardens, St. Julians, Malta
St Angelo Mansions, Vittoriosa
Vista Point, Marsalforn, Gozo
Fort Chambray, Ghajnsielem, Gozo
Kempinski Residences, San Lawrenz, Gozo
What expenses are involved in purchasing a property?
Stamp duty 5%*
Notarial fee around 1%
Searches around €300 (the cost of searches varies on a case-by-case basis)
AIP (where applicable) €233 plus professional fees for accountant, auditor, lawyer etc.
Recognition fee equivalent to one year’s ground rent (only applicable to properties subject to ground rent)
*Stamp duty is exempt on the first €175,000 of the price, and 5% on the remainder, when purchasing a place of residence as a first time buyer.
Real estate agency fees are usually the responsibility of the vendor, however ask your agent to confirm.
How does renting a property in Malta work?
Speak to a reputable rental agent and make sure you determine your budget, ideal locations, and what features you require in your rental home
Your rental agent will take you to view properties, hopefully you will find one which is right for you
Once the landlord and tenant agree, terms are set down in the letting agreement and a deposit must be paid to the landlord (usually equivalent to one month’s rent)
Both the landlord and the tenant must pay the letting agent the equivalent of half a month’s rent plus VAT