Non-Maltese residents need to comply with some small, yet important requirements when buying property in Malta. Under certain conditions an AIP Permit, short for Immovable Property Permit, is required. This applies specifically to Non-EU/Malta residents who wish to purchase immovable property on the Island.
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The government of Malta has put in place various initiatives to attract foreigners to the country, and therefore non-residents are encouraged to purchase property. To make this process easier, it is required to apply for the AIP Permit in order to regulate the property market better.
The Procedure To Buy Immovable Property In Malta
After deciding which property you wish to purchase, a written agreement must be signed between the buyer and the seller, referred to as the “Konvenju” (promise of sale). A copy of this agreement is required for the AIP Permit, and must be attached to the AIP form from the Capital Transfer Duty Department.
AIP Permit Processing Time
The AIP Permit should not take longer than 35 days, as long as the application form and documents needed are submitted correctly.
Documents Required For The AIP Application
Together with the application form, there are very few basic documents needed in order for the application to be considered. These are;
- copy of the promise of sale (Konvenju);
- two passport sized photos; and
- photocopy of passport.
AIP Application Fee
The fee of €233 is payable upon the issue of the immovable property permit.
AIP Permit Minimum Price Requirements
For non-residents there are some minimum price requirements when purchasing a property in Malta. For a flat/apartment or maisonette, the minimum purchase price is €101,938.
Any other type of property, such as a house of character or villa, the minimum purchase price must be €169,850.
Conditions Of The AIP Permit
The immovable property permit imposes three main conditions to be fulfilled. These are;
- The immovable property must be used for residential purposes;
- A copy of the notarial deed (final deed of sale) is to be submitted to the AIP section after its publication; and
- the property cannot be sold in part, or otherwise turned into more than one dwelling.
Renting Out Your Immovable Property
Properties acquired by the AIP permit are not allowed to be rented out to third parties.
Purchasing More Than One Property In Malta
Non-residents are only allowed to purchase one immovable property through the AIP permit. However, properties situated in Special Designated Areas impose no restrictions on acquisition. So additional real estate can be purchased in those areas freely.
An Overview Of All The Requirements
Minimum value of property
- House or villa: €169,850
- Apartment or maisonette: €101,938
In case the property purchased is still in shel form/unconverted, the minimum value must include the total cost of the finishing.
Restrictions on Real Estate of Historical Value
Real estate situated in historical areas or are of historical interest cannot be purchased. An architect must be engaged in order to evaluate if the property is of any historical interest or lies within a historical area.
The Purpose Of The Property Purchased
Properties purchased under the AIP Permit must be designated for residential purposes and to be used by the applicant only.
There are some exceptions to this:
- For purposes other than the Government of Malta;
- For an approved industrial or touristic project; or
- For any other project which is considered to be of significant contribution to the Maltese economy.
Evidence Of Source Of Income
The foreign origin of the funds used to purchase the immovable property application must be documented and transferred to a Maltese bank account.
Amount Of Properties Allowed To Purchase Under The Permit
Real estate purchased under the AIP Permit can only acquire one property. The exceptions are properties in Special Designated Areas. These are:
- Portomaso (St Julians)
- Chambray (Gozo)
- Tas-Sellum (Mellieha)
- Madliena Village Complex
- Fort Cambridge
- Ta’ Monita Residence (Marsascala)
- Pender Place and Mercury House,
- Manoel Island
- Cottonera Development
- Kempinski Residences (San Lawrenza, Gozo)
- Metropolis Plaza Gzira
- Vista Point (Marsalforn, Gozo)
Resale Of The Property
Properties purchased under the AIP Permit can only be resold to Maltese residents.
Real Estate Acquisition By Legal Entities
Legal bodies of persons established and operating within the EU and controlled directly by citizens by an EU member state, can freely acquire immovable property for the purpose of business operations.
Commercial partnerships established and operating from an EU member state can freely purchase immovable property provided that 75% or more of it’s shares are held by one or more EU citizens.
Any other cases of acquisition of immovable property by legal entities are not allowed. The only exception is if the property is required for projects of significant contribution to the Maltese economy. In that case the Ministry may issue specific permits.