Located in the middle of the Mediterranean, Malta forms part of an archipelago of three islands with Malta being the main island and two smaller islands Gozo and Comino. This stunning Mediterranean destination enjoys picturesque beaches and bays ideal for the 300 days of warm sunshine it enjoys each year. When you are not sunbathing by the beach, you could be exploring one of the many historical sites around Malta including fortresses and megalithic temples. Malta’s unique culture & rich history make it a very attractive travel destination and many who visit decide to stay.
With some of the most popular citizenship and residency programmes in Europe along with favourable taxes Malta is an ideal country for a foreign national to buy property. With new housing development always on the rise, Malta has fast become a property investment powerhouse for purchasers from all over the world.
Buying Property in Malta as a Non-Resident
Whether you are thinking of re-locating long term or simply use your island property when you come on vacation, you will have to go through a number of steps that involve documentation and taxes.
Foreigners who opt to purchase properties located in Special Designated Areas (SDA’s) also known as Lifestyle Developments will be afforded all of the same property rights as that of a Maltese Citizen. Should an expat who is considered a Third Country National (TCN) opt to purchase property that falls outside of an SDA then they will first need to apply for an Acquisition of Immovable Property (AIP) permit.
Non-EU citizens buying outside of an SDA will need to obtain an AIP permit and the requirements are based on the total value of the property. AIP permits are usually issued within 35 days after going through a review and approval process, at a fee of €233,00.
TNC’s who purchase property with their EU spouse will enjoy the same rights as their spouse providing that the purchase is made jointly between the two of you.
Previously EU citizens were also required to apply for an AIP permit if they wished to purchase property outside of a Lifestyle Development however recently the laws have been changed and EU citizens who have been a resident of Malta for at least five years will not need an AIP permit to purchase property outside of SDA’s although, they are limited to purchasing no more than two properties outside of a Lifestyle Development and one must be their primary residence, while TNC’s may only purchase one residential property outside of a SDA and the property must be used as their primary residence.
There is also no need for an AIP permit if you are an EU citizen and you are purchasing immovable property for business purposes.
What are Lifestyle Developments or Special Designated Areas?
Throughout recent years, a variety of luxury developments have been on the rise in prime locations around Malta. More often than not, these special designated areas (SDA) offer complimentary services such as a reception area, underground parking, a communal pool, and many more amenities and features.
The benefits of buying in an SDA is that foreign nationals will enjoy the same rights as Maltese nationals, irrespective of whether they are EU citizens or not. Another advantage is that expats are not required to obtain an AIP permit from the government.
There are a number of SDAs in Malta with the most popular notably being:
· Portomaso, St. Julian’s
· Portomaso - The Laguna, St Julian’s
· Tigne Point, Sliema
· Fort Cambridge Zone, Sliema
· Pendergardens, St Julian’s, Malta
· Tas-Sellum Residence, Mellieha, Malta
· Smart City, Kalkara
· Fort Chambray, Gozo
· Kempinski Residences, San Lawrenz, Gozo
What Types of Property Can You Purchase in Malta?
International buyers looking to buy property in Malta can choose from a variety of options including Houses of Character, Townhouses, Luxury Apartments, Magnificent Palazzo’s, Traditional Terraced Houses, and incredible Mediterranean Villas or Bungalows among others.
What you purchase and where you purchase the property will all depend on the type of lifestyle you are interested in. From luxurious penthouses with breath-taking views, to picturesque homes of character full of tradition, to converted Palazzos fit for royalty, to modern high-rise apartments, Malta Sotheby’s International Realty has a wide and diverse portfolio of Malta’s best properties for you to choose from.
Eligibility Requirements for International Buyers
There are a couple of general conditions that expats need to adhere to when purchasing property in Malta as a foreigner, these include but are not limited to;
· Have a valid travel document.
· Be in possession of a recognised health & life insurance policy.
· Be a fit and proper candidate.
· Have proof of finances in order to afford the property.
Your Step-By-Step Process on How to Purchase a Property in Malta as a Foreigner
Buying property in Malta is a sound and smart investment as the private property market in Malta has remained stable and enjoys long-term growth. This is despite the 2019/2020 global Coronavirus Pandemic. With the price of property in Malta only seeing a 0.4% decline in 2020 and a 28% increase in Promise of Sale Reservations signed in January of 2021 over January 2020, the forecast for the Maltese property market remains stable and optimistic.
Purchasing a property in Malta is quite straightforward. Here is a step-by-step process.
1. Finding the right Real Estate Agency to assist you in your property search;
While property can be purchased directly from a vendor(owner) as a non-Maltese citizen it is advisable to work with a registered and accredited Real Estate Agency that can connect you with an experienced and qualified agent to assist you in finding a home that best suits your needs.
Malta Sotheby’s International Realty is one such registered and accredited agency with all of our real estate agents being licensed under the L.N. 291 of 2020, the "Real Estate Agents, Property Brokers and Property Consultants Act, 2020" ("Act")
2. Selecting an Architect;
Once you have decided on the property that you wish to purchase it is important to find an architect to inspect the structure of the property and ensure that everything is in good order.
3. Selecting a public notary;
A notary will prepare the documents for the Promise of Sale (more about this in the next section). The notary will also inspect all of the paperwork and check the title while preparing a final deed of sale. You can find all the Notaries in Malta here: http://www.notariesofmalta.org/findnotary.php
4. Sign a Promise of Sale;
Your agent will negotiate the price and conditions with the seller on your behalf. Once both parties agree, a promise of Sale, also know in Maltese as a "Konvenju", will be signed at the Notary's office.
5. Sign The Final Deed of Sale;
A final deed of sale will be signed at the Notary's office, upon which you will be required to pay all outstanding funds for the purchase as well as the real estate agency fees, Notary and Stamp Duty Fees associated with the purchase of a property. If there is a bank loan involved, then the final deed will be signed at the Bank's office.
It is important to note that if the property is located outside of a Special Designated Area (SDA) also known as a Lifestyle Development and you are a non-EU citizen or are an EU citizen who has been living in Malta for less than five years then before you can sign the promise of sale, you will need to apply and acquire an AIP permit which will give you the right to buy your property.
What are the Costs and Fees when Purchasing a Property in Malta?
You need an architect to inspect your property and make sure it's in good order. You also need the architect to get you a site plan and fill out bank documents if you take a home loan. Architect fees are usually between €200 and €500.
Once you have signed the final deed and taken ownership of your property the only fees left to pay are your Stamp Duty, Notary Fees and Estate Agency Fees.
Stamp duty could be considered a form of property tax in Malta. Malta stamp duty is calculated at 5% of the value of the immovable property. 1% is payable upon signing the promise of sale and the remaining 4% is payable upon the final signing of the final deed of sale.
Notary fees are paid to the notary for preparing all the necessary documentation for the promise of sale and the final deed of sale. The Notary carries out all due diligence checks necessary to ensure the successful sale and transfer of the property. Notary fees are usually 2 – 2.5% of the total value of the property.
Estate Agency Fees
The majority of Real Estate Agencies in Malta charge a 5% + 18% vat fee of the property purchase price.
What are the Advantages of Buying a Property in Malta?
Property in Malta remains the preferred method of investment, which is why, property values and prices have been on the rise for the past few years. Homeownership rate in Malta is at 80% and in recent years, the purchase of apartments has increased quite substantially as buyers opt to purchase not only for residential reasons but also as a rental investment, this was due to the dramatic influx of expats choosing to live and work in Malta which contributes to Malta’s successful economic growth each year.
Besides Malta’s favourable weather conditions, Malta’s strategic location allows easy access to the rest of Europe, making it an attractive investment destination for wealthy individuals and international companies. Those who wish to do business in Malta will find that because English is one of the countries two official languages and that Malta’s favourable tax laws are very appealing in terms of international business and trade. Residents of Malta can also enjoy the 15% taxation cap on foreign income for permanent residents in Malta.
Because of its popularity as an investment location, Malta enjoys a strong GDP with year-on-year growth attracting many foreign workers which pushes the demand for property up and thereby assuring a stable property market.
In addition, those living in Malta enjoy an affordable cost of living and a high quality of life. With Malta being one of the safest countries in the whole of Europe with a health system that is ranked top 5.
Malta’s rich history and a strong sense of tradition and culture is a massive draw for tourism each year where thousands of people come to visit the Capital City of Valletta a UNESCO World Heritage Site.
Living in Malta
If you are a foreign national thinking of making Malta your permanent residence, you are definitely on the right track and the best time is now. The Maltese government welcomes and supports expats through a number of residence programmes. The benefits include indefinite residence in Malta and free access to EU countries.
Obtaining a Maltese citizenship comes with its own advantages including privacy, stability, mobility, comfort and access to the EU and Schengen area visa-free. Foreign nationals with a residential status are not taxed on foreign sources capital gains and foreign income that is not remitted to Malta.
Where to Live in Malta
The small island of Malta spans only 14.5 kilometres wide and 27 kilometres long yet provides a number of versatile properties in unique locations. For those who seek the hustle and bustle of city life, popular localities such as St. Julian’s and Sliema offer a cosmopolitan lifestyle with a number of amenities to enjoy right on the seafront that spans their eastern borders. Many modern professionals or those with young families enjoy the localities that surround these two major cities such as Swieqi, San Gwann and Gzira which often offer more spacious living accommodations and peaceful surrounds while still being a stone’s throw away from the excitement of the popular cities of Sliema and St. Julian’s.
Those who wish to be in a less urban environment while still enjoying modern day amenities opt for luxurious villas and converted historical properties in the prominent areas of Naxxar, Mellieha, Mosta, and San-Pawl tat-Targa.
Those seeking tradition, history and rich culture may prefer historical towns such as Rabat and Birkirkara. They both offer incredible homes suitable for every taste. These villages enjoy a rich history and a number of local attractions. The ancient city and former capital Mdina also known as the silent city, sits on the border of Rabat and attracts thousands of visitors each year who marvel at the historic homes and grand palazzo’s.
Gozo – Malta’s sister island – also offers a number of remarkable properties and many people who crave quiet and serenity select Gozo as their location to retire or purchase a secondary home for when they need a weekend getaway or summer holiday home.
How Can We Help You?
As your property expert we at Malta Sotheby’s International Realty realise that we are at the centre of your white glove experience with the Sotheby's brand. We understand that our role is more than just that of an agent, but also as your partner in finding a home or business premises that suit your vision for the future. We focus on servicing the luxury high-end residential and commercial property market in Malta in both sales and rentals, providing our local and foreign clients with a full turn-key real estate service.
Whether you are moving on or moving forward nothing compares to Malta Sotheby’s International Realty.