Isabella Zammit, Friday, 15 November 2013
This article is part of a series of 8 articles about buying property in Malta. The other articles in the series cover the following topics:
Malta is a popular place for foreigners to purchase property. If you want to buy a property, expect the process to take around three months to
complete. During this time, you can employ for a mortgage and have your purchase financed with, on average, a 20% deposit on a home.
We’re going to go through the steps you need to follow if you’re going to own your first home in Malta.
Find a Home
Your first step is to find a home you want to live in. This can be a flat, a home, or a mansion if you want it. The only things you can’t buy are
commercial or industrial properties. Foreigners need to buy these properties together with someone who is a resident of Malta.
The home you choose must be worth a certain amount of money. It’s slightly less for flats and maisonettes. This is to prevent poorer from foreigners
from purchasing all the cheap housing and stopping Maltese residents from living in them.
This value requirement goes down further if you buy a property in shell form or it requires renovation. The Ministry of Finance changes the figures
regularly to account for things like inflation and the current stock of housing in Malta.
You should employ an architect to make sure the house is built according to the correct permits. A notary will also confirm the seller actually owns
the house and isn’t just trying to sell someone else’s property fraudulently.
Negotiating a Price
Assuming you’ve hired a real estate agent, they’ll take over negotiations and get you the best price. They’ll work alone until they can get back to
you with a price they think you’ll be happy with.
Handing over these powers to an estate agent doesn’t bind you to buy anything. This is a common misconception which stops people from using estate
agents. If the price isn’t good, reject it. Your estate agent will try to get an improved offer, but if they can’t you can go back to the start and
search for a different place to live.
‘I’m Happy with the Price, Now What?’
If you’ve given the green light to the price offered, you can begin the purchasing process proper. You’ll be presented with a preliminary contract.
This is the 1st of two contracts and it binds both buyer and seller to the transaction. You’ll pay 1% in stamp duty and 10% of the asking price at
You can now use the preliminary agreement to apply for a mortgage and apply for your Acquisition for Immovable Property permit.
The preliminary agreement is always subject to the issue of any permits and any checks carried out on you. For example, if you are denied the right
move to Malta you won’t be able to proceed with the purchase. These are the only ways the preliminary agreement can be made void.
The Final Agreement
Your final agreement is the last step in your bid to own property in Malta. It’s where the ownership of the property officially changes hands and
you’re given the keys to your new home. You’ll pay 90% of the asking price, the remaining 4% in stamp duty, and 1% of the asking price for your
Any fees for your real estate agent will also be made. At the same time, the seller will pay all their appropriate fees. The notary is responsible
depositing any taxes from both parties with the Inland Revenue.
You’ll be able to claim back some money on the stamp duty. EU citizens taking up residency in the country only have to pay 3.5% on
116,500 Euros they spend. Anything over this price is taxed at the 5% rate.
You’ll need to be registered as the owner of the property within 15 days of the final agreement being signed. Your notary will take care of this on
your behalf as part of their standard services.
What if Something Goes Wrong?
On very rare occasions, something might go wrong after the signing of the preliminary agreement. This could be because the property doesn’t comply
with legal searches or there’s a problem with the deeds.
Whatever the problem, you have the legal right to pull out of the sale and receive all your money back. If, however, the problem is rectified you
still have to go through with the sale of the property.
Power of Attorney
Whilst we would recommend you always make an appearance at the signing of both contracts, you don’t have to if your current arrangements make this
impossible. You can give power of attorney to your estate agent. This means they can sign the contract on your behalf and it’s perfectly valid.
In many cases, the signing is actually two lawyers with power of attorney signing a contract without the presence of the buyer or seller.