Purchasing property in Malta is a fun and an exciting process. Property Title is acquired on the final deed which is a mirror image of the signed pre-contract (promise of sale) which isdrafted based mainly on English law.
Like in all countries around the world, the majority of property in Malta is sold through brokers and agents but unlike the rest of the world Malta real estate brokerage has adopted the multi agent listing system. Therefor the agent or broker would be representing both Buyer and Vendor, and at any given time the same property could be listed with numerous agents so it is important to find the right agent or broker who is going to work for you and assist you with perhaps is going to be the largest emotional financial commitment of your live.
Buying Process – 6 simple steps
1.Once you have selected your agent or broker, scouting the island begins, visiting many locations to get the feel and vibe of the different locations. As a general rule, Malta is the main Island, the largest and the cultural, commercial and administrative centre.
Gozo is the second largest island but more rural, characterised by fishing, tourism, crafts and agriculture, so the pace of life is much slower than Malta, in fact it is very popular with both nationals and foreigners seeking to retire to tranquility and less stress full life. Comino, the smallest of the trio, has one hotel and is largely uninhabited.
2. Once you have found the preferred location and have decided on what type of property size and budget, our expert agents can start by creating a shortlist of properties in desired location and set up viewings.
3. Once the property has been selected along with a second choice, arrangements are made to revisit the preferred property of choice to have a second look in more detail.
4. Once the clients are happy with their choice, the negotiations start were by the clients submit an offer through their broker to make the deal, followed by a property inspection.
5. The parties meet up at the notary where the pre -contract (promise of sale) is signed to secure the property. The normal validity time frame of this contract is usually 3 to 4 months in which time the notary carries out due diligence, proof of source of funds and a thorough search of the title. As a general rule the purchaser leaves deposit equal to 10% of the agreed purchase price with the notary in escrow, this is usually paid by bank transfer directly to the notary or by local cheque/bank draft. The notary registers this pre contract with 21 days with registry to be legal.
6. Once the Notary has compiled the relevant searches and is happy to verify proper title of the property a contract of transfer of title is drafted and signed, remaining balance of purchase funds is paid to the vendor. The original contact is then registered in the public registry. Keys to the property are handed over and the utility services are transferred onto the new home owner.
Fees
Vendor pays Agency fees on the sale of the property at the rate of 5% plus vat unless agreed differently by the parties concerned.
Notarial fees are charged at 1.5% of the purchase price. These as well as the Architect fees are paid by the buyer.
Taxes – Budget Nov 2020
1. A Reduction of stamp duty from 5% to 1.5% on the first €400k has been extended. 5% stamp duty payable on amount exceeding €400k.
2.No stamp duty is payable on the first €175k by first time buyer ( who don’t have any property in their name). Likewise any non Maltese citizen seeking to purchase in Malta that does not require an AIP (Application for immoveable property) to purchase can benefit from this incentive.
3. On properties purchased in UCA Areas in Malta, stamp duty is payable at 2.5% and 2% on properties purchased in UCA Areas in Gozo.
This is all conditional that all pre-contracts (Promise of sale) are registered prior to 31/3/21 and final contracts signed not later than 31/12/21.
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