A refundable deposit, usually equivalent to one month’s rent is usually paid on signing of the lease. Deposits are general practice in Malta and would be used in the eventuality that any bills are left outstanding or the property would have suffered any damage.
This deposit is refunded to the lessee at the end of the lease, provided that all outstanding bills have been paid and that the property after having been inspected by the lessor or his agent is found to be in the same condition as it was when occupation was effected (wear and tear excluded).
The rent is usually paid in advance – monthly, quarterly or in some cases even yearly, depending on the agreement between the lessor and the lessee. In most cases the rent excludes water, electricity and any other utility bills. However, it is becoming more common for the lessor to ask the lessee for an extra amount (aside from the rent) to cover the utility bills. When a property is leased for a long lease, the utilities (upon agreement between the lessor and the lessee) may be changed onto the name of the lessee.
The standard agency commission is the equivalent to half a month’s rent from both Lessor and the Lessee.
VAT implications on Leased Property
No VAT is generally chargeable on the lease of property in Malta and no VAT expenses should be reclaimed by the lessor on expenses incurred while keeping the property maintained. However, there are some exceptions.
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