One of the biggest decisions one can make in a lifetime is purchasing immovable property. The team of Sultana Legal will assist you in all the aspects of purchasing immovable property in Malta. We will offer you a complete range of services to ensure that you can enjoy your new home. This way we take the stress out of buying property by thinking of everything for you.
Acquisition of immovable property by residents
After that an agreement has been reached between the Vendor and the Buyer relative to the buying and selling of an immovable property, one has to consider various issues before entering into a promise of sale agreement, namely:
• The Purchase Price
• If there is Ground rent imposed on the particular property
• Payment terms (whether Purchaser shall require a bank loan)
• Works to be undertaken by the owner in the property
• Term of Promise of Sale Agreement: when the final deed can be signed
• Deposit paid (See more details on the page Property related matters)
• The purchaser, vendor and property in question must be identified clearly in the promise of sale agreement.
The next step is to appoint a Public Notary to draw up the Preliminary Agreement. Further details are found on the page Property related matters.
The Notary then drafts the final deed, prepares it for signature and notifies the parties concerned. Once every condition of the promise of Sale Agreement is complete and all duties fulfilled, all parties get together to sign the final deed for the purpose of purchasing immovable property in Malta.
The normal procedure (however not limited) is as follows:
• If a bank loan is required for the purpose of buying property, the final deed is signed at the bank.
• The contract of purchase is read out by the Notary Public and if all is in order all the parties concerned sign it.
• The balance due, that is, the purchase price less any deposits paid on account is paid to the vendor.
• The parties concerned settle their relative expenses concerning the purchase.
• In the case where the property being purchased is to be the main residence and no other property results to be under the name of the Purchaser, then a special concession is made whereby the first €116,468.67 / Lm50,000 (fifty thousand malta liri) are subject to a discounted rate of 3.5%. The remaining balance will be subject to the normal rate of 5%. This concession is applicable only to EU citizens taking up residence in Malta. In all other cases this cost is established at a fixed rate of 5% of the total selling price of the immovable property.
As regards the Vendor, as a general rule, capital gains tax has to be paid by the Vendor and this is calculated either at the rate of 7% provisional tax, 7% final tax or 12% final tax, depending on the particular case. There are certain exceptions to the payment of capital gains tax, for example, a Vendor who has resided in the property being sold for a minimum of three years and is selling the property within a year of when it was vacated, is exempt from the payment of capital gains tax if:
• Keys to the property are passed onto the purchaser.
• The public notary registers the contract at the public registry and at the Land Registry, if applicable.
Acquisition of immovable property by non-residents
Citizens of European Member States, including Maltese Citizens, who have resided in Malta for a minimum continuous period of 5 years at any time preceding the date of purchasing immovable property in Malta may freely acquire immovable property without the necessity of obtaining a permit. Any period totaling less than 90 days in a calendar year during which the individual was not in Malta is ignored.
Citizens of European Member States who have not resided continuously in Malta for a minimum period of 5 years may only purchase their primary residence or any immovable property required for their business activities or supply of services without the necessity of obtaining a permit. Such citizens require a permit to purchase immovable property for secondary residence purposes.
The spouse, of whatever nationality and wherever resident, of a citizen of a Member State does not require a permit when buying property on the same deed.
Individuals who are not citizens of a European Member State may not acquire any immovable property unless they are granted a permit. However there are certain exceptions to this general rule:
• The property is purchased as part of the requirements for the permanent residency scheme.
• The acquisition of a grave or a site for a grave.
• The redemption of any ground-rent or other burden encumbering any immovable property lawfully acquired by such non-resident person.
• Immovable property devolving causa mortis on any person, wherever resident, provided that the person from whom the property devolves had acquired such immovable property, where applicable, in accordance with the provisions of Chapter 246.
• The acquisition of immovable property by any person, wherever resident, in a special designated area. There are absolutely no restrictions to the acquisition of immovable property in the below designated areas:
• Fort Chambray, Ghajnsielem, Gozo
• Portomaso Development
• Cottonera Development,
• Manoel Island / Tigne’ Point,
• Tas-Sellum Residence (Mellieha Project)
• Madliena Village Complex
• Fort Cambridge Zone’, Tigne’