Buying Property

The buying process is relatively straightforward in Malta, although there are some additional hoops you are required to jump through as a non-EU national…

You’ll need to obtain an Acquisition of Immovable Property (AIP) permit from the Ministry of Finance. Once you’ve got a promise of sale agreed, your notary can file this application for you; it will take about 10 weeks to receive the permit once you’ve submitted the application.

To qualify for the permit, the purchase price of the property you want to buy must be at least 136,972 euros for an apartment (or “maisonette”) or 236,582 euros for any other immovable property. (Keep in mind, these minimum amounts are subject to revision.)

Your first step when buying a property is to acquire the services of a notary—they are able to keep you up to date on what these minimum prices are at the time you make your move. If you’re working with a real estate agent, they will appoint a notary for you.

You should also keep in mind that, usually, the permit allows a non-EU citizen to buy only one residential property for you and your family’s personal use. However, there are exceptions. You can buy additional properties if they are located in special designated areas (SDAs). There are over two dozen specified SDAs at the moment, spanning both islands, but these change regularly so you should check them at the time you’re looking into purchasing.

If you are resident in Malta for five continuous years, you’ll have earned the right to purchase a second property.

Another stipulation you need to deal with as a foreigner from outside the EU is that you are required to demonstrate that the funds you are using to buy the property have been remitted from abroad. This one is straightforward—you simply need to have a bank receipt for the transaction detailing where the payment originated.

Again, your first step in purchasing a property in Malta is to hire a notary. They lodge the application for immovable property on your behalf as well as prove other assistance during the buying process.

Areas To Focus On

The range of properties available on the islands runs from standard apartments to townhouses and character homes and from seafront developments to villas and bungalows with large gardens and pools…

In Malta

The Inner Harbour region of Malta, including St. Julian’s, Sliema, and Msida, are the most popular locations for foreigners (both tourists and expats). They are busy, culture-rich, heavily populated, and close to the water.

However, many people prefer to stay away from the hectic city life, and, when they do, they usually head inland to the west or south of the main island or to Gozo. These areas give a more relaxed lifestyle and a more authentic feel.

In Gozo

Gozo has earned a reputation as a key retirement destination in the region. Quiet, laid back, and with reduced prices on things like property, Gozo has a rural feel despite being well connected to the main island by regular short ferries.

When shopping for real estate in Gozo, “location, location, location” isn’t the mantra you should adopt… Most of the island’s inventory is made up of historical homes that are full of character. Each is unique, so finding one that appeals to you should be your main concern, not its location.

Buying a historical home and updating or renovating it to your tastes is a popular option for foreigners here. You’re unlimited in terms of your choice of finishings (you can get anything in Gozo that you can anywhere else in Europe)… The same can’t be said about Gozo’s labor supply, however, so the timing of your renovations is important.

If you’re set on a new-build, you’ll find some modern tourist developments in Xlendi and other popular spots… But these apartment-block-style buildings lack charm. Also, any new developments that fall within the Urban Conservation Area have to conform to specific regulations. From an investor’s point of view, the properties that are the most worthwhile are those with a view or those with any extra land (especially if there’s space for a pool)… These are hard to come by in Gozo and, therefore, will always be in demand.

For a family home without a view, you can expect to pay anywhere from 300,000 to 500,000 euros; for a similarly sized home with a view or land, the price goes up to 450,000 to 700,000 euros… As a foreigner in Malta, you can get a mortgage for the purchase of a home (typically up to 70%).

The Buying Process

Once you have chosen a property, you can contact the seller or estate agent to make an offer, and, if the offer is accepted, the notary steps in to draw up a purchase agreement, more commonly called a promise of sale or preliminary agreement—also known as a konvenju or convenium. You’ll need to attach this document to your AIP request (the notary will handle this for you).

The buyer is required to pay 10% of the selling price as deposit when signing the contract as well as one-fifth of the 5% stamp duty.

The convenium is typically valid for three months (the term can be extended if needed, but minimum is three months), during which the notary gets to work performing due diligence on the property. Once he has wrapped up, he prepares the final deed.

The balance due on the selling price and stamp duty is due within 15 days of the final signing of the deed, and the home is yours.

Transaction And Holding Costs

While the transaction fees themselves aren’t especially high in Malta, many of the services you pay for will have a steep VAT tacked on, hiking up the cost of acquisition here.

*The registration fee varies depending on the property value, but it’s very low, usually around 60 euros on average.

**If the buyer was found via Registered Real Estate Agency under a sole agency agreement, the fee is 3.5%, paid by the seller; if not, the fee is only 5%, paid by the seller—in this case it would be included in the advertised price. If buyer was found through a broker, the buyer pays 1%; if buyer goes through a Registered Real Estate Agency, they pay nothing.

There are no property taxes in Malta.

Capital gains tax was repealed several years ago. There is currently a final withholding tax regime in place. Owners selling their residential property after living in it do not pay sales tax; owners selling their secondary/holiday home pay 5% inside the first five years, there onwards 8%.