Conditions for purchasing property

Property purchase procedures:

A preliminary or “promise of sale” agreement is signed, binding the vendor to sell and the purchaser to acquire the property on terms and conditions agreed upon, subject to good title, as well as issuing of all relative permits. On signing of the agreements, a 10% - 20% deposit is usually lodged with the Estate Agent as intermediary.

The preliminary agreement is usually valid for 3-6 months, or longer, if agreeable to both parties. During this period, the Notary (Solicitor) will undertake to submit all necessary applications and conduct researches on the property to prove good title, which is guaranteed with a general hypothec by vendors on all their present and future property. Preliminary agreements and Contracts may be written in Maltese or in English, The remaining balance is paid and vacant possession is given by the vendor on contract.

Funds required:
When buying a home, it is important to be aware of the funds required so that you are not caught unawares too late into negotiations. We work with you in order to ensure that the purchase of your home is affordable, whilst still enjoying life as you know it.

Funds required upon signing the preliminary agreement:

Legal fees and expenses – approx 2%, certain cases may require more in-depth work and knowledge, depending on the situation.

Finance and taxation:

• Mortgage facilities are available for the purchase of property from a number of banking institutions
• Capital gains tax may be incurred when selling your property. The taxable element is the difference between the cost price and the selling price, less any costs incurred such as legal fees, improvements, agency fees and an allowance for inflation and cost of maintenance made during ownership. Tax is collected by the Notary before whom the deeds are signed by way of a provisional tax at 7% which is calculated on the value of the property sold.
• In the event of death, the beneficiary is liable to 5% transfer tax on the value of immovable property

Conditions/Concessions for Non-EU citizens purchasing property in Malta:

There are certain conditions applicable to buying property on the Maltese islands.

• Non-EU citizens need to apply for an Application of Immovable Property (A.I.P). This is issued by the Ministry of Finance and is applied for by your Notary or Solicitor and is granted in approximately three calendar months
• The value of the property purchased must be above €99,042 in the case of an apartment and €165,024 in the case of a house
• Documentary evidence proving that the funds for the purchase of property have originated from outside Malta. A bankers’ receipt is sufficient evidence
• The property being purchased may only be used by the purchaser, his/her immediate family or friends
• Property with the facility of a communal/private swimming pool will be granted a permit to rent
• The property being purchased may be transferred to a resident of Malta, EU citizen or non-EU citizen after an attempt has been made to sell to a resident of Malta or EU Citizen without success
• Non EU citizens may own only one property in Malta or Gozo at any given time unless the properties are situated in a “Special designated area”  Presently these areas include, Portomaso, Tigne Point, Cottonera Waterfront and Chambray in Gozo