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The ultimate guide to buying property in Malta 2020

For most people buying a property is a once in a lifetime decision and involves a big financial commitment. Therefore, it should be very carefully planned.  
With our property buying guide, we will take you step by step through the property buying process in Malta. These steps are

  1. Determine who is eligible to buy properties in Malta
  2. Making sure you know what you need
  3. Finding the right property
  4. Signing the promise of sale a.k.a. the konvenju
  5. Term of konvenju
  6. Signing the final deed

In case you are already familiar with the process of buying a property you can take a look at our recently listed properties for sale in Malta and Gozo. If you already know what kind of property you want you can start reading here.
Before we dive into the buying process it is important to understand specific terms which you will encounter while buying a home in Malta. Therefore, we have put together an FAQ for home buyers.

Property Buyers FAQ

What is the first-time-buyer scheme?
A first time buyer is someone who buys their first property as a primary residence in Malta. A first-time buyer is exempt from the stamp duty of 5 % on the first 175.000 € of the properties’ value and can thus save up to 6500 €. The remaining value of the property is taxed with the standard 5 % stamp duty rate.
What is the konvenju?
The konvenju also referred to as promise of sale or preliminary agreement is a document drafted by the notary public which binds seller and buyer to conclude the property purchase within a set time span subject to specific conditions.
What is the term of konvenju?
The term of konvenju is the time span between the signing of the konvenju and the signing of the final deed. During this time all parties carry out their defined responsibilities with in the konvenju for instance checking on legal title, finishing construction works or applying for permits.
What is the final deed?
The final deed of sale is the purchase contract of a property drafted and read aloud by a notary. Upon signing of the final deed the property ownership will be transferred from seller to buyer.
What is the stamp duty rate in Malta?
The stamp duty rate in Malta is 5 %.
How high are the notary fees in Malta?
The notary fee payable to the Notary Public in Malta is usually 1 % of the purchase price.
What is an EPC?
An energy performance certificate (EPC) includes information about the energy performance of a property. An EPC is required by law and needs to be obtained by the owner from an Energy Performance of Buildings (EPB) assessor. When renting or selling a property, an EPC needs to be presented to the tenant or buyer.
What means freehold?
Freehold means that you own the property including the land it is built on and do not have to pay ground rent. Although ground rent is an old concept, it still prevails in Malta.
What is an AIP permit?
An Acquisition of Immovable Property (AIP) permit is a permit granting the right to purchase property in Malta and is usually needed by EU citizens who have not been residing in Malta for at least 5 years and non-EU citizens. An AIP costs 233 € and is typically issued within 35 days by the Capital Transfer Duty (CTD) Department. The minimum value of the property needs to 121.792 € for flats and maisonettes and 202.929 € for any other property type.

Who can buy properties in Malta?

If you are a Maltese citizen or from another country of the European Union and have continuously resided for at least 5 years in Malta, you may purchase properties without the need for a permit or a special license.

If you are a Maltese citizen or from another country of the European Union and have not continuously resided for at least 5 years in Malta, you may purchase a property as your primary residence or any property which is necessary to run your business without the need of a permit or a special license.

​If you are a Maltese citizen or from another country of the European Union and have not continuously resided for at least 5 years in Malta, you need an AIP (Acquisition of Immovable Property) permit to buy a secondary residence. If you are from a non-European Union country you need to apply for an AIP permit. The application form can be downloaded for an individual here and for a company here.

Only one property can be acquired with an AIP permit. Properties acquired with an AIP permit may not be rented out.

These restrictions do not apply for properties that are located in special designated areas.

Preparation and planning is crucial: Make sure you know what you need and can afford

Since the decision to buy a property in Malta is for most people a once in a lifetime decision it should be carefully planned. To start with you should think about the following questions:

  • Why do you want to buy real estate in Malta?
  • Which property type do you prefer?
  • How big does the property need to be?
  • Where should the property be located?
  • How are you financing the property?

Your why: The reason you want to become a homeowner

The very first question you should answer is why do you want to buy a property in Malta. There are typically three types of property buyers in Malta:

  1. First-time buyers who want to buy a nice family home as their primary residence
  2. Buy to let: People who are looking for rental investments and want to rent out their apartment to profit from rental income and increased property value
  3. Developers who are looking for new construction opportunities

The basics: Property type, size and location

There are many different types of properties in Malta. From charming and traditional houses of character or townhouses to ultra-modern penthouses and luxury villas – there is a property for every personal taste. 

The most popular property types are

When choosing a property type you should also consider the following aspects:

  • How many bedrooms and bathrooms do you need? Also, consider your family planning.
  • Do you want an outside area (balcony or terrace)?
  • Should the property be furnished and ready to move in or would you consider buying a property on plan? On plan properties can be slightly less expensive and you can make small adjustments to how the property is being built.
  • Where should the property be located? Consider your daily commutes while picking a location.

Do the math: Financing a property in Malta

Buying a home is typically a big financial investment and often requires a bank loan. If that is the case please keep in mind that banks typically loan 90 % of the property value. The remaining 10 % need to be financed by you. However, there are more costs involved than just the selling price. Other costs really depend on your personal situation. These might include:

  • Stamp Duty: 5 % (For first-time buyers there is no stamp duty on the first 175.000 €)
  • Notary fees: 0,25 % – 1 %
  • Agency fee: 5% + VAT (might by slightly negotiable)
  • Registration fees for AIP permits, if any
  • Interest rate for paying back your bank loan
  • Income tax and tax on capital gains, if you intend to rent out your property

All of these costs need to be considered when setting a budget for your property investment. Please visit our home loan calculator to calculate the mortgage for your new home.

How do I find a flat or an apartment for sale in Malta?

After you have decided what kind of property you would like to buy and can afford, it’s time to start looking for suitable properties. There are several options to find your new property:

  1. Facebook Groups
  2. Real Estate Agents
  3. Comparison websites

Facebook Groups

There are many large and active groups on Facebook where mainly real estate agents, but also owners, post available properties for sale.

  • Daily updated with newly available properties
  • Partially offers directly from owners, meaning there is no agent fee involved
  • Popular properties can be gone very fast
  • Offers directly from an owner can be easily overlooked due to too many listings
  • Often postings are missing information e.g. decent images
  • A lot of groups have the same properties listed

Some of the most popular Facebook groups can be found here:
www.facebook.com/groups/malta.homes.sales/
www.facebook.com/groups/1666921876855477/
www.facebook.com/groups/100kto150kMALTAPropertyforSale/

Real estate agents

The undoubtedly easiest way to find the right property is by hiring a real estate agent. A reliable agent will sit down with you and search for properties that match your criteria. Once you have selected a few properties he will arrange viewings with the owner and accompany you to the viewings.

  • Omnipresent: Easy to find an agent because of a high density of real estate branches across whole Malta
  • Immediate suggestions of available properties based on your requirements. No need to click through hundreds of possibly outdated listings of real estate websites
  • Can help to find a notary for the drafting of the preliminary agreement
  • Most real estate agencies have good connections to local banks to support securing a loan
  • Because of his market knowledge he knows which properties are overpriced and can possibly prevent you from spending thousands of euros too much
  • Hard to find a reliable agent and to know who can be trusted: If you just walk into a real estate branch you cannot influence with which agent you have to deal with
  • Agency fee (might be negotiable)

A list of our trusted and reliable agents can be found here. In case you have a bad experience with one of our agents, please reach out to us through our contact form.

Comparison platforms: Combines updated listings with reliable agents

A comparison website like Malta Homes aggregates properties from different real estate agents and offers a modern as well as easy to use web interface including advanced search functionalities.

  • Only reliable and responsible agents can list on this site
  • Daily updates with newly available properties
  • Only available properties are being listed
  • Detailed information about the properties including 3D video material
  • Agency fee (might be negotiable)

Please click here for available properties for sale. In case you do not find a property matching your criteria, please contact us and an agent will be in touch shortly to help you find a new home.

Signing the konvenju: The first step to becoming a homeowner

Once you have selected the property, negotiated the purchase price as well as agreed on any special conditions the promise of sale also known as the konvenju will be signed. The konvenju is drafted by a notary chosen by you. A real estate agent can assist in finding a notary as most real estate agencies cooperate with notaries.

In the konvenju, seller and buyer agree to complete the property purchase within a time span of typically three months (term of konvenju) providing that certain conditions are met. These conditions include but are not limited to:

  • the purchase price
  • remaining construction works to be completed by the seller, if any
  • included items (e.g. furniture, kitchen), if any
  • other special requests by either party (e.g. necessary bank loans or permits)
  • term of konvenju (usually three months)

On signing of the konvenju the buyer pays one-third of the legal fees to the notary. Further, he pays 1 % provisional stamp duty and an agreed deposit which is typically 10 % of the purchase price. The remaining 4 % stamp duty is due on signing of the final deed. If you are buying your first property in Malta as your primary residence you are benefitting from the first time buyers’ scheme. This means that there is no stamp duty on the first 175.000 € of the purchase price. The 5% stamp duty is calculated on the remaining value of the property. Further, the property seller is obliged to hand over an energy performance certificate to the buyer.

Term of konvenju: The final phase

The term of konvenju is the time period between the signing of the konvenju (preliminary agreement) and the signing of the final deed. The term of konvenju is typically three months unless otherwise agreed.

During this period the notary ensures that all legal requirements are met and that there are no mortgages or any outstanding debts on the property.

The buyer takes care of the financing and makes sure that the bank loan is granted on signing the final deed. Further, he checks on necessary permits if any are required.

The seller finishes any remaining construction works or other special conditions as stipulated in the konvenju.

Signing of the final deed and taking ownership

Once the necessary works are completed by all parties a date is set by the notary for the signing of the final deed. This date can be any day during the term of konvenju, but the latest the last day of the stipulated period.

The signing of the final deed takes place either at the bank (in case a loan is granted to the buyer), the notary office or the office of the involved real estate agent. The notary reads out the purchase contract and if all is in order the contract is signed by all parties. Following the contract signing,

  • the remaining purchase price is paid to the seller (selling price minus the deposit)
  • the remaining stamp duty is paid to the Office of the Commissioner for Revenue
  • the remaining two-thirds of the notary fee of typically 1 % is paid to the notary public and typically split between buyer and seller
  • the agency fee of typically 5 % plus VAT (18 %) is paid to the office of the real estate agent by the buyer and/or seller

Conclusion

By now you should have a very good overview of how the property buying process in Malta works. When you are ready to buy a property you can start by browsing through our list of available properties. If you have more questions or special requirements feel free to reach out to one of our agents or drop a comment under this article.

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