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Buying Property for Foreign Nationals  
Buying Property for Foreign Nationals in Malta
   
Buying Procedures

We at 1 STOP Property Services will help you step by step of the way before, during and after the property sale in all aspects of the property purchase including the searching, negotiating, financing, finishing, furnishing and moving in your newly acquired property.

Once you have chosen the property, and the price and all the other conditions have been agreed on, a notary public is appointed and a promise of sale agreement can be drawn and signed between the parties concerned. This agreement binds both parties, buyers and sellers, to purchase / sell the property under the terms and conditions agreed upon.

The promise of sale agreement and contract are written in English.

On signing of the promise of sale agreement, a deposit is paid, on account of the purchase price, equivalent to 10% of the purchase price to the agent, vendor or notary. The deposit on account of the purchase price, is forfeited in favour of the vendor if the purchaser does not appear on the definite deed (contract) without a valid reason at law.

A promise of sale agreement is only valid for three months unless otherwise agreed upon. 

During the term of the promise of sale agreement (preliminary agreement) and the definite deed ( contract), ALL  the parties concerned must fulfill all their  duties and obligations as stated on the promise of sale agreement (preliminary agreement).

  • The Notary must register the said promise of sale agreement (preliminary agreement) within 3 weeks of its  signing with the Commissioner of Inland Revenue and deposit 1% of the property purchase price on account of Duty on Documents due by the purchaser on the definite deed of sale (contract). (In the event that the deal falls through, then the provisional 1% stamp duty paid by the purchaser on the promise of sale agreement (preliminary agreement) will be refunded in full.
  • The Notary carries out all the necessary searches on the property and verifies clear legal title, to check that there are no outstanding debts, hypothecs or liens on the property.
  • The Notary must also apply  for the AIP permit (Acquisition of Immovable Property), if applicable, from the Ministry of Finance on behalf of the purchaser (Cost Lm 100 (¤ 233 €)
  • The purchaser must honour all the conditions mentioned in the promise of sale agreement e.g. (bank loan applications) within the specified time frames as listed on the promise of sale agreement (preliminary agreement).
  • The vendor on his part must also honour all the conditions listed in the promise of sale agreement, applicable to him/ her/ them  e.g. (completion of works) as agreed upon within the specified time frames as listed on the promise of sale agreement (preliminary agreement).

Once all the above conditions of the promise of sale agreement (preliminary agreement) have been completed, the parties get together to sign the definate deed (contract). The normal procedure is as follows:

  • If a bank loan is required for the purchase, the definite deed (contract) is signed at the bank. Bank Loan facilities are available from all banks in Malta for the purchase of property. Please go to Bank Loans for further information.
  • The definite deed (contract) is read out to all parties concerned and if ALL is in order all the parties sign it. 
  • The balance due on the definite deed (contract) i.e. the purchase price less all the money already paid on account, is paid to the vendor.
  • The vendor settles any outstanding amounts concerning the property e.g. water, electricity, telephone etc. 
  • The Vendor hands over the keys of the property to the purchaser.
  • The notary public registers the contract at the public registry (and the land registry if applicable). 

Duty on Documents on the purchase price must be paid to the Commissioner of Inland Revenue less the 1% Duty on Documents which would have already been paid on the signing of the preliminary agreement. Additionally to this the Notarial fees and other expenses are payable. These would normally be in the range of 1% - 1.5% in total.

If the property being purchased is to be used as purchaser's primary residence, (Permanent Residence Scheme) then the Duty on Documents applicable is 3.5% on the first Lm 50,000 (¤ 116,468 €) and 5% on the remaining balance .

For ALL other types of property purchase, the Duty on Documents applicable is 5% on the total value of the property.

No Duty on Documents is applicable on the value of the movable property (furniture and fittings) being transferred with the immovable property.

Conditions to Purchase Property by Foreign Nationals

  • EU member states citizens, including Maltese citizens, who have not resided in Malta for a minimum continuous period of five years at any time preceding the date of acquisition require an AIP (Acquisition of Immovable Property) permit to purchase a property in Malta (except in special designated areas where one may purchase more than one property)
  • Non EU member states citizens also require an AIP (Acquisition of Immovable Property) permit to purchase a property in Malta (except in special designated areas where one may purchase more than one property)     
  • The AIP permit is normally issued within 35 working days, under the following terms and conditions:

a) The value of the property purchased must not be less than Lm 66,200 (¤ 154,200 €) in the case of a house and not less than Lm 39,700 (¤ 92,480 €) in the case of an apartment / maisonettes. These values are index linked and are revised every year at the start of May.
b) The property has to be used solely as a residence by the applicant and other family members, unless the applicant obtains the relative permit to rent the property.
c) The property purchased may not be converted into more than one dwelling.
These applicants will only be allowed to purchase a second property in their name after they sell the other one.

  • EU member states citizens, including Maltese citizens, who have resided in Malta for a minimum continuous period of five years at any time preceding the date of acquisition, may acquire more than one property, without the necessity of obtaining an AIP permit.
  • EU member states citizens, who have not resided in Malta for a minimum continuous period of five years at any time, but have the intention taking up residency in Malta, do not require a permit to buy the first property. For more information go on Why Malta? Residency Information

Bank Loan facilities are available from all banks in Malta for the purchase of immovable property.

Conditions to Purchase Property by other Entities

  • A body of persons, established in and operating from an EU member state may also acquire immovable property in Malta that is required, for the purpose for which it has been set up, as long as it is directly controlled by an EU member state citizen, who have resided in Malta continuously for five years.
  • A commercial partnership established in and operating from an EU member state (including Malta) may freely acquire immovable property in Malta that is required, for the purpose for which it has been set up, as long as such partnership is controlled by a person/s who is/are an EU member state citizen/s, who have resided in Malta continuously for five years.
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Importation of Personal Effects
Importation of Personal Effects
  • EU member states citizens do pay VAT or other Import Duties when they import their household effects (excluding cars)
  • Non EU member states citizens may be required to put a deposit or a bank guarantee for the VAT / duty in question. Upon the expiry of 183 cumulative days stay in Malta such deposits or bank guarantees are refunded
For further information please contact info@gov.com.mt Importation of Cars
  • Used cars, i.e. more than 6 months old or with more than 6,000 kilometres, originating from EU member states, are subject to Registration Tax and VAT but are not subject to VAT on cost (CIF) on the transfer of residence to Malta.
  • New cars originating from EU member states are subject to Registration Tax, VAT and VAT on CIF value.
  • New cars originating from non-EU member states are also subject to customs duty. 

For further information please contact info@maltatransport.com


Importation of Pets

Any pets entering Malta must have all the necessary documentation available namely:

  • THE Pet Travel Scheme Certificate indicating that the pet animal has been microchipped, vaccinated and blood tested.
  • Certificate signed by a recognized veterinarian confirming the treatment against ticks and tapeworms 1/2 days before coming to Malta.
  • The Decleration that pet has not been outside the Pet Travel Scheme qualifying countries for the last 6 months.
Any pets entering Malta which have been outside the Pet Travel Scheme qualifying countries during the last 6 months are quarantined for a 6 month period.For further information please contact info@veterinary.gov.mt
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Frequently asked Questions  

Can any Foreign National buy immovable property in Malta?
Yes.

Does an EU member states citizen need a permit to buy immovable property?
EU member states citizens, including Maltese citizens, who have resided in Malta for a minimum continuous period of five years at any time preceding the date of acquisition, may acquire more than one property, without the necessity of obtaining an AIP permit.

EU member states citizens, who have not resided in Malta for a minimum continuous period of five years at any time, but have the intention taking up residency in Malta, do not require a permit either. For more information go on Why Malta? Residency Information

EU member states citizens, who have NO INTENTION of taking up residency in Malta would however require an AIP (Acquisition of Immovable Property) permit to purchase a property in Malta (except in special designated areas where one may purchase more than one property)


Does a Non EU member states citizen need a permit to buy immovable property?
Yes - Non EU member states citizens require an AIP (Acquisition of Immovable Property) permit to purchase a property in Malta (except in special designated areas where one may purchase more than one property)


What are special designated areas ?
Special Designated Areas are special developments whereby ALL FOREIGN NATIONALS may purchase an UNLIMITED number of properties in their individual name/s, a Company or Trust and are also able to rent them out.

Which are the developments in special designated areas?
Portomaso
Tigne’ Point
St. Angelo Mansions
Tas-Sellum
Madliena Village
Fort Chambray (Gozo)


Are there any exceptions when an AIP permit is not required?
Yes.
If an EU member states citizen intends to use it as his / her primary residence.
If an EU member states citizen has been a resident of Malta for more than 5 years.
If any foreigner National  (even non EU) purchases property in a special designated area

How long does it take for the AIP permit to be issued?
The AIP permit is normally issued within 5/6 weeks and is issued by the Ministry of Finance


What is the cost for the AIP permit?
Lm 100 (¤ 233 €)


What is the paperwork required for an AIP application?

  • Two passport sized photos.
  • Copy of Preliminary Agreement
  • Photocopy of passport

What are the conditions of the AIP permit?

  • a) The value of the property purchased must not be less than Lm 66,200 (¤ 154,200 €) in the case of a house and not less than Lm 39,700 (¤ 92,480 €) in the case of an apartment / maisonettes.
  •  b) The property has to be used solely as a residence by the applicant and his family unless the applicant obtains the relative permit to rent the property
  • c) The property purchased may not be converted into more than one dwelling.

Are these Values Fixed?
No. These values are index linked and are revised every year at the start of May


Can a Foreign National buy below theses values?
Yes, as long as the property would require additional costs for it to become habitable bringing the amounts to the required values


Is a Foreign National allowed to buy a second property?
Will only be allowed to purchase a second property in their name after they sell the other one (except in special designated areas where one may purchase more than one property)


Can a Foreigner rent his property?
Yes

  • If it is in a special designated area.
  • If the property is a villa or a house with a private pool.
  • If it is has a license issued from the Ministry of Tourism Authority under “Superior” and “Comfort” category

Can a Foreign National buy 1 property in a special designated area and one outside a special designated area.
Yes.

Can a foreigner buy more than one property?
EU member states citizens may only buy one property unless:

  • the property is in a special designated area
  • have been residents in Malta for a minimum period of 5 years
  • the second property is required for the person’s business activity or supplying of services.

Can non-EU citizens buy more than one immovable property?
Yes, in a special designated area

Can an immovable property be purchased in the name of a Company?
Yes, if the property purchased is in a special designated area.
Yes, as long as it is directly controlled by an EU member state citizen/s, who have resided in Malta continuously for five years.

How does one apply for a permit to rent his property?

An application from the Ministry of Tourism.

Does a Maltese National with dual citizenship e.g. Australian and Maltese citizenship, who has not resided in Malta for 5 years need a permit?

Yes.

Does an EU member states citizen whose business is to develop immovable property be given permission to do so?
Yes. He will be given permission to do so.

Are Bank loans available to Foreign Nationals for the purchase of immovable Property?
Yes. Bank Loan facilities are available from all banks in Malta for the purchase of immovable property. For more information go on click here


How much can Foreign Nationals borrow for the purchase of immovable Property ?
Local mortgage facilities are available for up to 90% of the purchase price


What does the Bank require as security?
A charge over the property being purchased


Can any Foreign National take up residency in Malta?
Yes.


Is an EU member states citizen who takes up residency in Malta subject to tax?
Yes at a flat rate of income tax of 15% on income remitted to Malta with a minimum tax liability of Lm 1,800 (¤ 4,200 €) per annum.


What are the conditions for Permanent Residency?
The applicant within 12 months from taking up residence:

  • Must purchase a house valued not less than Lm 66,200 (¤ 154,200 €) and an apartment / maisonette valued not less than Lm 39,700 (¤ 92,480 €)
  • Alternatively he / she may lease or rent property for not less than Lm 1,800 (¤ 4,193 €) per annum. within one year
  • He/she has an annual income of at least Lm 10,000 (¤ 23,300 €) or capital of at least Lm 150,000 (¤ 350,000 €)
  • He/she remits annually to Malta an income equivalent to Lm 6,000 (¤ 13,980 €) in his / her respect and Lm 1,000 (¤ 2,330 €) in respect of each dependant.

How long does it take or the the certificate to be issued?
Normally around 3 months. The applicant must take up residency within one year from the issue of the permit.


What Is the rate of tax for Permanent Residents?
A flat rate of income tax of 15% on income remitted to Malta with a minimum tax liability of Lm 1,800 (¤ 4,193 €) per annum


Are there double Taxation agreements with other countries?
Yes - There are a large number of countries who have double taxation agreements with Malta and therefore residents only pay in one country

What is the current rate of Duty on Documents?
If the property being purchased is to be used as purchaser's primary residence, (Permanent Residence Scheme) then the Duty on Documents applicable is 3.5% on the first Lm 30,000 (¤ 69,881 €) and 5% on the remaining balance

For ALL other types of property purchase, the Duty on Documents applicable is 5% on the total value of the property.

1% of which is due on signing of Promise of Sale Agreement, remainder due on signing for definite deed (contract).

No Duty on Documents is applicable on the value of the movable property (furniture and fittings) being transferred with the immovable property.


Can the property on which I have signed a Promise of Sale Agreementand placed a deposit on, be sold to another buyer prior to signing ofdefinite deed (contract)?
No


Can the price of the property increase between signing of Promise of Sale Agreementand definite deed (contract)?
No


Is a Permanent Resident selling his property liable to capital gains tax?
No,if the property has been owned and occupied for at least three consecutive years and the property is transferred within one year of being vacated


Can all the funds be repatriated abroad?
The sale proceeds including all profits can be repatriated in whatever currency and to whichever country the seller chooses. We will be able to immediately repatriate the sale proceeds to your account overseas. Furthermore, through special arrangements that we have with leading foreign exchange brokers and financial institutions, we are able to secure favourable rates of exchange prevailing at the time.

For further information please go on other services

Do EU member states citizens pay VAT or other Import Duties when they import their household effects (excluding cars)?
No, EU member states citizens do not pay VAT or other Import Duties when they import their household effects.

Do non EU member states citizens pay VAT and Import Duties when they import their household effects (excluding cars)?
Non EU member states citizens may be required to put a deposit or a bank guarantee for the VAT / duty in question. Upon the expiry of 183 cumulative days stay in Malta such deposits or bank guarantees are refunded

Can residents import their car/s?
Yes, on the transfer of residence to Malta

  • Used cars, i.e. more than 6 months old or with more than 6,000 kilometres, originating from EU member states, are subject to Registration Tax and VAT but are not subject to VAT on cost (CIF).
  • New cars originating from EU member states are subject to Registration Tax, VAT and VAT on CIF value.
  • New cars originating from non-EU member states are also subject to customs duty. 

For further information please contact info@maltatransport.com

Can residents bring in their pets?
Yes, anypets entering Malta must have all the necessary documentation available namely:

  • THE Pet Travel Scheme Certificate indicating that the pet animal has been microchipped, vaccinated and blood tested.
  • Certificate signed by a recognized veterinarian confirming the treatment against ticks and tapeworms 1-2 days before coming to Malta.
  • The Declaration that pet has not been outside the Pet Travel Scheme qualifying countries for the last 6 months.

Any pets entering Malta which have been outside the Pet Travel Scheme qualifying countries during the last 6 months are quarantined for a 6 month period.

For further information please contact info@veterinary.gov.mt


Do Foreign Nationals have to pay any deposits for Water, Electricity and telephone?
There are no deposits for EU member states citizens. However Non EU member states citizens may be asked to pay a deposit of Lm 500 (¤ 1,165 €) for the telephone and Lm 200 (¤ 465 €) to the Water Services Corporation


Can Foreigner National make use of our Medical facilities?

EU member states citizens resident in Malta having a European Health Insurance Card are entitled to FREE Public Health care.
For further information please contact info@gov.mt

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