The Process Of Buying Property In Malta
Finding The Right Property
When it comes to finding the right property to buy in Malta, the help of a great real estate agent is unmatched. Dhalia Real Estate is the best place to find properties for sale in Malta. The company has the latest listings of properties and can offer professional advice to help facilitate the process leading to the Promise of Sale. Not to mention, you can benefit from the help of professional consultants that have all the latest information on the real estate market.
The Promise of Sale
After you found the best property for your needs, a Promise of Sale is prepared. Also known as Promise of Sale or Konvenju in Maltese, this document is drawn up by a notary and sets down the terms of the sale, which include:
- Price
- Ground rent (if any)
- Deposit
- Payment terms
- 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
At this point, 10% of the purchase price is left with the notary or agent as a deposit. A 1% provisional duty (part of the total 5% stamp duty) is payable on the value of the property.
Once this document is signed, the notary will carry out searches on the history of the property to ensure that it can be transferred freely.
The Final Deed Of Sale
After the buyer has received the necessary permit and verified that they have clear title to the property, they may proceed to sign a contract of sale. This Final Deed of Sale should then be drawn up by a notary, once all terms set down in the Promise of Sale have been fulfilled. The balance of the purchase price is paid to the vendor, the balance on the stamp duty is due, and the notary’s fees are also paid. The keys to the property are handed to the new owner, and the notary registers the contract of sale at the Public Registry.
What You Need To Consider Before Buying Property In Malta
When it comes to purchasing property in Malta, there are key considerations you need to think about before you make any major decisions. From hiring professional help to the steps you need to take as a foreigner trying to invest, it’s better to be informed right from the get-go!
PROFESSIONAL HELP
When purchasing property in Malta, you will need the services of trusted professionals to get the process done correctly. Choosing the right experts will save you time and money, while also ensuring you won’t encounter any problems down the line. These are the main professionals that can help you buy property in Malta:
- Architect – will inspect the property and make sure there are no irregularities or structural issues, and that everything is up to standard. Your architect will also be able to provide you with a valuation of the property.
- Notary – 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.
- Real 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.
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.
ACQUISITION OF IMMOVABLE PROPERTY (AIP) PERMIT
If you’re thinking of buying property in Malta as a foreigner, the first thing you need to do is apply for an AIP (Acquisition of Immovable Property) permit. This permit is required for all non-residents who want to purchase property on the island. The good news is that the application process is relatively simple, and you can expect to receive your permit within around 35 days. Of course, there is some flexibility to this rule:
- 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.
However, if an EU citizen is purchasing property in Malta as a second home, then they will also require an AIP permit. The minimum property values are:
- Flat/Maisonette: €121,792
- Any other property: €202,929
These values are subject to change according to the Property Price Index. Also, a fee of €233 is charged per permit, and the permit is usually issued within 35 days.
THE SPECIAL DESIGNATED AREAS (SDAS)
Malta has long been a popular destination for foreign buyers looking to purchase property. In recent years, the island has seen a surge in demand from EU citizens, as well as investors from outside the bloc. One of the main attractions for foreign buyers is the fact that Malta offers a one-property limit, in which case an AIP Permit is not necessary, as long as the property resides in a Special Designated Area. These areas are typically luxury resorts or developments where foreign investment is encouraged. As a result, you can buy as many properties as you like without the need for an AIP.
While the one property limit may seem restrictive, it actually provides a unique opportunity for those looking to invest in Maltese real estate. By limiting the number of properties that can be owned, the Maltese government ensures that demand for luxury properties remains high, making it a wise investment for those looking to purchase a property in Malta.
The Special Designated Areas are:
- Madliena Village, Madliena
- Southridge, Mellieha
- Tas-Sellum Residences, Mellieha
- The Quad, Mriehel
- Trident Park, Mriehel
- Ta’ Monita Residence, Marsaskala
- Smart City, Kalkara
- Pendergardens, St Julians
- Portomaso, St Julians
- Tigné Point, Sliema
- Piazzetta, Sliema
- Fort Cambridge, Sliema
- St. Angelo Mansions, Vittoriosa
- Kempinski San Lawrenz, Gozo
- Fort Chambray – Gozo
- Vista Point – Gozo
TAX EXEMPTIONS FOR EXPATS
In addition to a simple buying process, Malta offers a number of attractive tax incentives for foreign property owners, making it an ideal destination for those looking to invest in real estate. Individuals who obtain Maltese citizenship can retain “non-domiciled” status and benefit from the advantageous tax system of the Maltese Islands. As a general principle, Maltese residents who are non-domiciled are only required to pay tax on income earned or received within the country.
People who are residents with non-domicile status, with an income of €35,000 or more annually arising outside of the country, which in turn 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.
Global residents can also benefit from Malta’s double taxation agreements with most EU countries, USA, Canada, and Australia.
EXPENSES INVOLVED IN PURCHASING PROPERTY IN MALTA
Some extra expenses to take into account when buying a property in Malta are as follows:
- Stamp duty 5%*
- A notarial fee of around 1%
- Searches around €300 (the cost of searches varies on a case-by-case basis)
- AIP (where applicable) €233 plus professional fees for an 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 the responsibility of the vendor.
MALTESE RESIDENCY
As a foreigner, if you’re looking to buy property in Malta, you’ll need to make sure you have the right visa or work permit. For most foreign buyers, this means getting a residency status. However, if you have enough cash in the bank, there is a scheme through which you can buy property in Malta and get residency status fast.
This scheme is known as the Malta Citizenship by Investment Program and is designed to attract foreign investment to help boost the economy. If you’re looking to invest between €600,000 and €750,000 in the scheme and stay in Malta for a required residence period of 12 to 36 months (with a lower investment allowing for a longer stay), you may be eligible for citizenship and a Maltese second passport after 1-3 years.
You’ll also need to prove that you have adequate health insurance and sufficient funds to support yourself. Once your application is approved, you’ll be granted residency status and be able to stay in Malta for as long as you like.
Types Of Properties To Buy In Malta
Malta’s booming industry and economy have made known the fact that most people can benefit from a sheer number of properties. From apartments and penthouses to maisonettes and villas, the Maltese real estate market has something for everyone.
Apartments
Apartments have long been a popular choice for first-time homebuyers in Malta. They are often more affordable than houses, and they require less maintenance, but with so many apartments on the market, it can be hard to know where to start your search. Identify your budget and your needs and once you’ve decided on the size and layout of the apartment you’re looking for, you can start narrowing down your options.
If you’re looking for an apartment that’s move-in ready, you’ll want to focus your search on properties that are finished or close to completion. But if you’re willing to wait a little longer for your new home, there are many advantages to choosing an apartment that’s still under construction such as being able to negotiate a lower price for an on-plan property.
Penthouses
Although the term penthouse originally referred to a simple structure built on the roof of a warehouse or other commercial building, it has come to signify luxury and extravagance. Today, penthouses are usually found atop high-rise apartment buildings, providing their occupants with an opportunity to enjoy Malta’s sweeping views and spectacular weather. In addition to their prime location, penthouses are often distinguished from other apartments by their luxurious finish and extensive amenities, such as fireplaces, private terraces, and top-of-the-line appliances.
Maisonettes
Maisonettes offer many benefits over traditional homes. For one, they are often more affordable, since you are only buying a portion of the larger property. They often come with their own outdoor space, which can be great for families with small children or pets. And, if you purchase a maisonette on-plan, you will have the opportunity to customize the home to your exact specifications. Whether you are looking for an affordable starter home or a spacious family home, a maisonette may be the perfect choice for you.
Townhouses
Townhouses have been a popular property type for centuries, and today they offer a charming alternative to traditional urban apartments. Townhouses are typically converted to modern standards, with spacious hallways and traditional features like the Maltese ‘antiporta’ at the entrance. Sleeping quarters are often found on the second floor, and the building is usually equipped with its own roof and airspace. This makes townhouses an excellent option for those looking for a structurally sound property that is shielded from the hectic lifestyle of the city. Whether you’re looking for a place to call your own or an investment property, townhouses offer a unique and appealing option.
Villas And Bungalows
When it comes to vacation homes, villas and bungalows offer a level of privacy and luxury that is hard to match. Villas are typically laid-out over two floors, while bungalows have one floor, and may be fully detached or semi-detached. Both properties come with front or back gardens and they are usually surrounded by a patio. In most cases, you’ll also find swimming pools and a beautiful outdoor landscape design with ample barbeque space or decking areas. Whether you’re looking for a quiet retreat or a lively base for exploring the surrounding area, a villa or bungalow can offer the perfect solution.
The Best Locations To Buy Property In Malta
Despite its size, Malta is home to a diverse range of towns and cities, each with its own unique atmosphere. If you’re a fan of shopping and nightlife, then head out to Sliema or St. Julian’s. These locations are known for their social scene, vibrant atmosphere, and amazing coastal scenery.
If you are looking for a more laid-back lifestyle, the North of Malta is the place for you. With its stunning sandy beaches and crystal-clear waters, this area is a paradise for sun and beach lovers. Places like Mellieha are highly sought after, because they offer a more relaxed pace of life and a wide range of properties to choose from, making it the perfect place to find your dream home.
If you have a little more to spend on your new home, then Valletta is renowned for its stunning architecture, rich history, and vibrant cultural scene. Or if you’re looking for a truly unique place to live, Mdina – Malta’s former capital – is definitely worth considering. This picturesque city is filled with historical wonders, and its car-free city centre makes it one of the most peaceful and tranquil places on the island.
| Region | Price per sq.m – apartment | Price per sq.m – villa | Price per sq.m – townhouse |
| Northern Region – incl. St Paul’s Bay | €2319 | €3927 | €3039 |
| Northern Harbour- incl. Sliema | €3126 | €3543 | €3385 |
| South Eastern Region – incl. Marsaskala | €1986 | €2831 | €2366 |
| Southern Harbour – inc. Valletta | €2322 | €2849 | €3023 |
| Gozo – incl. Rabat | €1449 | €2334 | €1736 |
Frequently Asked Questions
Is the process for buying immovable property the same as for a Maltese citizen?
Besides obtaining the AIP permit, the process is the same.
What do you need to submit for an AIP application?
The documents needed for an AIP application are the following:
- Two passport-sized photos.
- Copy of the convenium (Preliminary Agreement of Sale).
- Photocopy of passport showing details.
Does an individual with dual citizenship ( e.g. American and Maltese ) who has not resided in Malta for 5 years need a permit?
Yes.
Can a foreigner rent his property?
Foreigners are allowed to rent their property as long as it’s in one of the SDAs ( Special Designated Areas ) and if it’s issued with a licence from the Ministry Of Tourism Authority “Superior” and “Comfort” categories.
Find The Right Property With The Right Help
As property experts with 40 years of experience in the market, Dhalia has built its reputation on helping those seeking to buy property in Malta. Our consultants are trained and specialized to serve clients according to their individual needs.
Whether you’re a first-time buyer in Malta, or you’re an investor with multiple properties in your portfolio and interested in buying more, we’ve got you covered. Just browse through our wide selection of Maltese properties for sale and contact us if you find something up your alley.
Those looking to buy commercial property are also in great hands, as Dhalia engages specific consultants who specialize in offices and retail outlets. We keep track of commercial opportunities in new developments and other ideal locations.
