Purchasing a property in Malta or Gozo can be an exciting yet complex process, especially if one is new to living on the island. Maybe you enjoy the modern apartment with sea views or a charming townhouse with traditional Maltese and Gozitan architectural features, or you are after the sumptuous luxuries of up-market properties or villas. In any case, understanding the market and its legal and financial aspects is crucial. This short guide highlights the steps involved in property acquisition in Malta and Gozo. Here we point out essential regulations, costs, and procedures to help you make informed decisions.
We can assist in every stage of buying a property in Malta or Gozo. From putting you in touch with reliable real estate agents, through organising notaries and ensuring that all legal aspects are correct. There are many types of properties in Malta and Gozo, including houses and villas, townhouses, apartments, penthouses, maisonettes, farmhouses, etc.
For EU nationals, buying a Maltese property is straightforward and without many restrictions although initially they can only buy one property. This property must be used only as a residence for the owner or for his immediate family, though guests may be accommodated in the property when the owner or a member of his family is in residence. The property may not be rented out, except for villas with a swimming pool, which might be possible to have for renting, through proper permits. A second property may only be purchased after residing in the country for a minimum continuous period of five years.
Foreign nationals, who are not citizens of the EU, are required to obtain an Acquisition of Immovable Property (AIP) Permit from the Ministry of Finance – for which processing typically takes three months. To be granted such a permit, the purchase price of your prospective property, is currently at least €107,670 for an apartment or €179,400 for other types of property.
The prospective buyer must also be able to prove that the funds to be used have been remitted from abroad (i.e. bank receipt). An AIP permit only allows you to buy and own one residential property for you and your family’s personal use.
Steps to buying a property
First you need to investigate the property market and decide on budget, location and type of property. Once you’ve decided on a property and your offer has been accepted, you must sign a Preliminary Agreement with the buyer. This agreement is usually referred to as the ‘Convenium’ or promise of sale agreement and binds both parties to the transaction based on a set of mutually agreed terms and conditions.
This Agreement is usually valid for three months. After the signing of the Agreement (but before entering into a final deed of sale), a Notary would be engaged by the buyer to carry out the necessary searches into the property to confirm everything is in order before proceeding. Upon signing this agreement that 1% of the 5% total stamp duty fee is payable to the Inland Revenue and a 10% deposit is paid by the buyer. The remaining 4% of the stamp duty will be paid with the signing of the final deeds.
Please note that this 1% of stamp duty will be refunded if the final deeds do not go through and that the deposit agreed on during the signing of the Preliminary Agreement will be handed over to the seller if the buyer does not sign the final deed without a valid reason in law.
The following terms must be agreed before the Preliminary Agreement is signed:
- Ground Rent
- Features included in the price
- Payment terms
- Price
- Terms of promise of sale agreement
- Works to be undertaken by the owner
- Please note: The contracts and agreements are always written in English.
Final Contract of Sale
If all conditions of the preliminary sale agreement are complete and all duties fulfilled, all parties meet with a public notary to sign the final deed. It is the responsibility of this official to draft this final document and prepare it for signatures.
The normal procedure is as follows:
The final deed is signed at the bank if a mortgage is required by the buyer. The final contract is read out and if both parties agree to the terms and conditions the contract will be signed. Time to pay the balance (the purchase price less any deposits paid on account) to the seller. Both parties must now confirm that they have settled all expenses in relation to the purchase and property conditions.
The keys of the property are then exchanged. The contract is then registered at the Public Registry by the Notary.