Asunnon Osto

The following is detailed information regarding the standard procedures, facilities and expenses related to the simple practice of purchasing a property on Malta.

Procedure

Once you find your dream home on our marvellous and charming island and the right price has been negotiated, a promise of sale is signed, binding the vendor to sell and the purchaser to buy the property within a stipulated time and under other terms and conditions agreed upon by the concerned parties to the agreement. The agreements and contracts are written in English.

Some of the most common terms and/or clauses written in such a promise of sale are:

• Subject to the acquisition of the A.I.P. permit (in the case of non-residents).
• Subject to a bank finance (if applicable).
• Subject that the property is being build according to all building regulations.

It is the practice that 10% of the purchase price is paid on the signing of the preliminary agreement either by way of deposit or earnest as agreed between the parties. 20% of the stamp duty is also to be paid during the signing of the promise of sale, and the Notary Public conducting the sale will also be appointed to register the agreement and to pay the stamp duty with the Department of the Inland Revenue.

The preliminary agreement is normally but not necessarily for a period of three months during which period the Notary Public nominated by the purchaser carries out searches to ascertain the validity of the title.

On the expiration of the agreed period if all the conditions of the preliminary agreement are satisfied, a final deed of sale will be entered into between the parties to the agreement and full ownership is attained.

Expenses

The expenses connected to a property acquisition in Malta are the following:

• Stamp duty on documents or transfer tax
• In case of an EU citizen who resides permanently in Malta, the stamp duty is charged as follows: 3.5% on the first €116,468 of the purchase price of the immovable for the main residence only. The balance is paid at the rate of 5%.
• 5% of the total value of the property in the case of non permanent residents and non EU citizens.
• Notarial fees 1% of the property purchase (approximately)
• Broker’s fees are to be paid by the vendor.
• In the case that the Acquisition of Immovable Property Permit (AIP Permit) is required, the administration fee due to the Ministry of Finance is € 232.94.

Loan Facilities

The banking system in Malta is of a high international level. Bank of Valletta, HSBC, APS Bank, Volksbank and Lombard Bank are the main bankers on the island.

Loan facilities from local banks are available for the purchase of property by foreigners. The loan generally does not exceed 90% of the purchase price and the completion/finish costs of the property.

A hypothec on the property itself acts as a security for the loan and a health insurance shall be issued having a minimum value of the loan amount. The interest charged is dependent on the security given.