With a thriving real estate market over recent years, Malta has attracted a lot of interest from foreign nationals – so much so that the market has changed drastically. There has been an increase of luxury property developments catering for business owners moving to the islands, and investors looking for lucrative luxury real estate investments. Luckily, this expat guide will help you with all you need to know about buying property in Malta – a country where foreigners are increasingly tempted by the prices and low tax rates, as well as a relatively smooth purchasing experience.
What’s more, whether you’re looking in Malta, Gozo or Comino, a dynamic, peaceful and friendly environment is easily attainable.
Divided into three main islands, it is Malta’s two largest which are most attractive to foreigners. Malta, as well as being the main island is also the country's economic and cultural centre. Some popular areas on the island include capital city Valletta, Sliema, Saint Julian’s, Marsaskala, Marsaxlokk, Birkikara, Saint Paul’s Bay and Mellieha.
This contrasts greatly with the second-biggest island, Gozo. It is much less developed and its atmosphere is more rural, making it especially popular with retirees. Its capital, Victoria, also known as Rabat, has a large senior community.
Elsewhere on Gozo, Masalforn and Xlendi are ideal regions for investing in real estate.
However, as with most real estate transactions across the globe, it is best to travel to the location in person to ensure that your preferences are met.
Searching for your ideal property in Malta
Running an online search can be a great starting point in your property hunt but you should be aware that many listings online will be out of date.
Being in the country certainly makes it much easier as you can chase up leads in person or seek the help of a real estate agency. If you do this, you should ensure that you have your criteria set out for the type of property, as well as the features you would like it to have (swimming pool, garden, proximity to schools, etc.) beforehand. Most importantly, you should have a budget in mind.
Be sure to visit several real estate agencies to explore the breadth of options.
What is an acquisition permit and will you need one?
When buying property in Malta, the question of an acquisition permit, known as the Acquisition of Immovable Property Permit (AIP), is likely to arise.
Though buying a property is, generally speaking, rather easy, you should be aware of the requirements. European nationals who have lived in Malta continuously for the past five years, for example, do not require an acquisition permit.
However, European nationals who do not meet this requirement have to request one and this will allow them to buy a property which will be considered as their secondary residence in special designated areas (SDA).
Non-European nationals, regardless of how long they have been in Malta, have to apply for a permit for both a primary and a secondary residence.
For more information on this, you are advised to seek all relevant information from the authorities or a reputable real estate agency. A good place to start is Inland Revenue. They can be contacted at either email@example.com or by phone (35622962296 / 35621220481 / 35622998000).
Steps to follow when buying a property
Once you’ve made your decision to buy, it is advisable to make an offer or discuss the sale price with the owner in the presence of a real estate agent.
When a deal is reached, you will need to sign a promise of sale agreement, or Convenium (Konvenju) - a legal document containing details of the sale. This includes the amount deposited (typically 10% of the total sale price); the stamp duty amount (property purchase tax), which is 3.5% for the first €150,000 of the property's price and 5% of the remaining value; and conditions regarding the whole payment. A notary will then need to be consulted to check the details of the whole transaction, as well as the title deed.
After a final sale date is established, either at the bank or before the notary, you can then transfer the full payment to the seller, as well as pay the stamp tax to the Commissioner of Inland Revenue, in addition to any other fees to the notary or agent. Agency fees are shared by both buyer and seller and amount to about 5% of the property's value. Notary fees start at 1% of the total value.
Once these relatively straightforward steps are complete, you will be ready to enjoy your new property in Malta and all the benefits that entails.