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

• Capital Gains Tax
• Estate Agency Fees

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).

• When the property being purchased is to be used as purchasers ordinary place of residence, stamp duty is charged at 3.5% on the first Lm 30,000 and 5% on any amount over Lm 30,000.
• The 3.5% concession on the first property does not apply to non-EU citizens.
• 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.

Five percent plus VAT of the selling price in the case of a multiple-agency agreement, or three point five percent plus VAT of the selling price in the case of a property benefiting from a sole agency agreement. Please note that the above costs are a general guide to the expenses which may be incurred when a sale takes place.  Naturally, every case must be taken under its own merits.