Buying property in Malta procedure
Once the immovable property has been chosen and we have aided you in negotiating the price as well as any specific conditions that have been formally discussed and agreed upon, an appointment is made to sign the Preliminary Agreement, or ‘Konvenju’. This is simply a contract that binds both the buyer and the seller to complete the deal by a certain date and under certain conditions.
You will be required to pay 1% provisional stamp duty when signing the ‘Konvenju’ as part payment of the full 5%, with the remainder payable on signing the final deed and an agreed deposit, which is usually 10% in such situations. For people acquiring their first immovable property (first-time buyers), the stamp duty on the first €150,000 has been waived as a concession, with the remaining balance of the property being taxed at 5%. Read more in detail about the purchasing procedure for buying property for sale in Malta.
Buying Maltese property for primary residence
EU citizens are permitted to purchase more than one immoveable property for sale in Malta without a permit. On condition that prior the property investment, they have resided in Malta for at least 5 years.
EU citizens that have not resided in Malta for 5 years, but are buying Maltese property with the intention of using it as a primary residence will not require a permit.
Similarly, a permit will not be required to purchase a property in Malta to be used for their business activities or services.
For further information on the Residence Scheme in Malta, visit Malta HNWI Tax Residence Scheme. Read more about first-time buyer schemes for primary residence when buying property in Malta
Buying Maltese Property as a 2nd Home / Non-EU Residents
In order for non-EU Citizens to purchase a property in Malta as a foreign investment, limits have been set on the prices to be paid by them to obtain an AIP (Acquisition of Immovable Property).
These limits are set at €169,205 to purchase a house or villa, and €101,551 to purchase a flat or maisonette.
The same restrictions also apply for Citizens of the European Union who will not be using the purchased Malta real estate as their primary residence.
For further information on the Global Residence Scheme in Malta, visit Malta HNWI Tax Residence Scheme. Learn more in our guides about second-time buyer schemes for EU residents when buying property in Malta.
Acquisition of Companies
A group of people (excluding a commercial partnership) which was set up and operates from an EU member state is free to purchase an immovable property that is needed for the reason for which it has been established, on condition that it is directly controlled by citizen of the European Union member state who has lived in Malta continuously for at least five years.
Commercial partnerships founded and controlled from a European member state (including Malta) are permitted to buy immovable property that is required for the purposes for which they were formed. As long as a person/s who is a European member state citizen and has resided in Malta continuously for at least five years controls the partnership and holds a minimum of 75% of the share capital.
All others would require a permit, which will only be given if the property is needed for an industrial or touristic project, or will positively contribute to the Maltese economy. Permission may not be granted should the property in question he considered to be of historical interest. Read more about the Malta Individual Investor Programme (MIIP).
Income tax / tax on capital gains
An advantage to buying Malta and Gozo real estate is that the Maltese legal system does not impose wealth or property taxes. As of May 2012, the structure for renting property was as follows:
In the case where the property is rented out such that revenue is generated, the revenue is subject to a flat tax rate of 15% for foreign nationals.
Benefits of Buying Property in Malta
The following are some of the advantages of buying property in Malta as a foreign investor:
- It is permissible to resell the Malta property
- Non-residents or non-Maltese citizens are permitted to obtain mortgages with the permission of the Central Bank of Malta. After that, you may borrow as much as you like from local banks, as long as you stay within their pre-determined criteria/brackets.
Here is how JK Properties can help
Here is how JK Properties can help you when buying property in Malta:
- We will schedule viewings, liaising with both the seller and yourself,
- We will continue to assist the client until the ideal property has been sourced, always following up and constantly taking feedback into consideration,
- Once the property has been found, we will negotiate with the seller to get the best price possible for both parties; and
- We have excellent ties with all of the major banks and can gladly put you in touch with them if you require financing (bank loans) for the purchase.
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