The process of buying and selling your property in Malta is fairly straight forward, as a large part of all property transactions in Malta are negotiated through either brokers or Estate Agents. A big part of the sales team’s job at Malta Luxury Homes apart from securing the right buyer for the property, is to advise and guide both vendors and purchasers throughout the entire process of the property sale/purchase transaction.
Unlike in the rest of the world, in Malta, the property Title is acquired on the final deed which is a public contract registered in the Public Registry of Malta. This is a two part process comprising the signing of two separate contracts which are exactly identical to each other.
In the first contract known as a “Convenum” or (promise of sale) the parties (both Vendors and Purchasers) are “Promising” to sell and buy to and from each other. This contract usually has a validity of three to four months, during which the notary orders the necessary researches on the parties and the property from the Public Registry and carries out the necessary due diligence and Kyc of all the parties involved.
Once the notary is finished reading his researches and is happy that the Title has been duly vetted, an appointment is set to sign the second contract which is the final deed published and registered in the Public Registry of Malta.
As a general rule in Malta, all brokerage of property is done adopting a multi Agency listing system; meaning that at any given time, multiple Real Estate brokers and Real Estate Agency firms could be representing the same property, unless a vendor specifically hires a particular Broker or Agency firm exclusively as the sole selling agents to represent his property. Sole agencies usually have a minimum term period of 6 months to 1 year unless agreed differently between the parties.
(i) Certified Copy of I.d Cards or Passports of all parties.
(ii) Vendor to produce EPC certificate and plans of property. In the case of a new build, a full set of plans with relevant permits and compliance certificate have to be submitted.
(iii) All Kyc documents of all parties.
(iv) Last Ground rent receipt if applicable.
(iv) A receipt of last Condominium fees paid.
(v) A Fiscal receipt issued by the Real Estate Agency for agency fees duly paid.
Fees
Vendor pays Agency fees on the sale of the property at the rate of 5% plus 18% VAT unless agreed differently by the parties concerned.
Buyer pays Notarial fees of 1.5% to the notary and stamp duty.
As a general rule vendors do not pay taxes on their property if it is their primary residence and they have owned it for more than 3 years, otherwise sale tax is payable at the normal rate of 5% on a private residence or 8% if it is a property forming part of a development being sold by the contractor.
As per the budget of 2020 as a measure to stimulate the economy due to the Covid 19 pandemic, the Maltese government had introduced some reductions in the taxes mainly:
(i) Sales Tax reduction from 8% to 5% on those selling property.
(ii) On Donated property by parents to their children. A tax exemption on the first €250,000 of the value and 3.5% tax to be paid on the remaining value. Terms and conditions apply.
(iii) All profits derived from assignment of rights on Promise of sale contracts will be taxed at a flat rate of 15%.
This will remain in place for promises of sale registered until 31 March 2021 and contracts entered into by 31st December 2021.
(i) Reduction of stamp duty from 5% to 1.5% on the first €400k of the purchase price.
(ii) No stamp duty tax payable on the first €175k of the purchase price for first time buyers.
(iii) 2.5% stamp duty payable on properties purchased in urban Areas in Malta.
(iv) 2% stamp duty on properties purchased in urban Areas in Gozo.
(v) Promise of sale agreements to be registered prior to 31st December 2021 and final contracts to be signed not later than 31st December 2021.
Kindly contact us by email to learn more about how we can help you sell or rent your property and sign up for a free valuation of your property.
info@maltaluxuryhomes.com
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