• Procedures And Expenses
• What to consider
• Stamp Duty
• Notary
• Recognition Fee

• Capital Gains Tax

• Permanent Residence
• Conditions For Property Purchase
• Acquisition of Immovable property in Malta

Buying a property is usually the largest financial commitment anyone makes.  Therefore, we feel that it is important that you, as a purchaser, know you know your rights and limitations when making the decision to buy a property. At Maltese Island Properties we are here to help  guide you through the whole process.

• What type of property would you like to live in?
• How big would your ideal property be?
• Where would you like to live?
• What services ie transport, amenities etc would you require?
• Would you prefer a modern or a traditional/character property?
• What is your budget and how you will be financing your purchase?

• The price;
• Whether the property is Freehold (no Ground Rent) or if there is a Temporary or Perpetual Ground Rent;
• What exactly is included in the price, ie furniture, finishing works etc;
• Any work to be undertaken by the owner;
• Payment terms;
• The term of the promise of sale agreement, ie the length of time between the convenium and the final contract.
  

• The price
• Ground rent if any
• What is included in the price
• Conditions agreed by the parties eg;  subject to a bank loan, building permit, architect approval etc
• The amount of the deposit.  It is normal practice for the sum equivalent to ten percent (10%) of the purchase price to be paid as a deposit on account as a gesture of goodwill by the purchaser and to indicate their intention to appear to sign the final deed.
  

It is important to know that the deposit is forfeited in favour of the vendor if the purchaser does not appear on the final deed without a valid reason at law.

• When will the final deed be signed ? A promise of sale agreement without a term stated is valid for three  months.

The promise of sale agreement will have to be registered with the Commissioner of Inland Revenue and one percent provisional duty paid on the contract value.  The provisional duty will be off-set against the final duty payable on the final deed, or refunded should the deal fail to complete. During the period between the promise of sale (convenium) and the final deed (the contract) a number of steps must be carried out by all parties involved.

• The Notary (employed by the purchaser) will carry out researches about the property to verify legal title and assure himself that there are no outstanding debts, hypothecs, or liens on the property.
• The purchasers  must honour their conditions contained in the promise of sale agreement, such as a bank loan application and ascertaining that the property is covered by a building permit etc.
• The vendor must honour all their conditions contained in the promise of sale agreement, such as finishing the works within the specified time.

• If a bank loan is required for the purchase, the final deed (contract) is signed at the bank.
• The contract of purchase is read out and if all is in order all the parties concerned sign it.
• The balance of the purchase price due is paid ie the purchase price less any deposits paid on account to the vendor.
• Keys to the property are passed to the purchaser.
• All parties concerned settle their relative expenses concerning the purchase.
• The notary  will then register the contract at the public registry (and land registry if applicable).

• 5% on immovable property.
• No stamp duty is charged on the value of movable property eg furniture and fittings being transferred with the immovable property.

• If the immovable property was owned and occupied by the vendor as his main residence for a period of at least three years and has sold it within a year of vacating it.
• Similarly, if one party in an engaged couple sell their half of a property bought jointly to the other party, then again tax is not charged. Neither is it charged on court ordered sales.
• If it can be proved that no profit on the sale has been made. However, this exemption may be granted by the Inland Revenue Department upon application prior to the signing of the final deed of sale.

In the past few years a number of overseas buyers have shown a great deal of interest in acquiring a property in the Maltese Islands. It is important to point out that buying a property in Malta and being a resident in Malta are two completely separate procedures.

• Income tax rate at 15% with a minimum tax liability, after double taxation relief, of Lm1,800 (Euro 4,200) per annum.  Tax is only charged on income arising in, or remitted to, Malta.
• No tax on capital gains arising out of, and remitted to, Malta.
• Relief from double taxation by virtue of Malta’s treaty network or through unilateral provisions.
• No inheritance tax is payable but duty at 5% is payable on immovable property situated in Malta.
• Free repatriation of funds.
• No duty on importing household goods and furniture.
• Reduced registration tax on importing a motor-vehicle, subject to certain conditions.
  

A permanent residence permit holder must have an annual income of at least Lm10,000 (Euros 23,200) or a proven capital of Lm150,000 (Euros 350,000).  This capital does not have to be brought into the country except for the amount needed to purchase or lease immovable property. The minimum annual income to be remitted to Malta by a permanent residence permit holder is Lm6,000 (Euros 14,000) per person plus Lm1,000 (Euros 2,300) for each dependent, including the spouse.

• Citizens of all European Union member states, including therefore Maltese Citizens, who have resided in Malta continuously for a minimum period of five years at any time preceding the date of acquisition may freely acquire immovable property without the necessity of obtaining a permit under Chapter 246 of the Laws of Malta.
• Citizens of all European Union member states, including therefore Maltese Citizens, who have not resided continuously in Malta for a minimum period of five years may only purchase their primary residence or any immovable property required for their business activities or supply of services with out the necessity of obtaining a permit under Chapter 246 of the Laws of Malta.
• Citizens of all European Union members state, including therefore Maltese Citizens, who have not resided continuously in Malta for a minimum period of five years, required a permit under Chapter 246 of the Laws of Malta to acquire immovable property for secondary residence purposes. 
• Individuals who are not citizens of the European Member state may not acquire any immovable property unless they are granted a permit in terms of Chapter 246 of the Laws of Malta.
• There are defined zones in Malta, referred to as special designated areas, where there are absolutely no restrictions to acquisition. There is also several other special exemptions. Different rules apply to the acquisition by bodies of persons.
  

• Chambray in Gozo
• Portomaso in St Julians
• The Cottonera
• Tigne in Sliema