Property Purchase Process in Malta: A Step-by-Step Guide for Foreign Investors
Investing in Maltese property can be a lucrative opportunity, but understanding the legal and procedural aspects is crucial to ensuring a smooth transaction.
This guide provides a step-by-step overview to help foreign investors navigate the property purchase process in Malta.
Understanding Property Eligibility for Foreign Buyers
Foreign investors must determine their eligibility to purchase property in Malta. Non-EU citizens typically require an Acquisition of Immovable Property (AIP) permit, while EU citizens who have resided in Malta for at least five years can purchase without restrictions.
Tip: Properties in Special Designated Areas (SDAs) can be purchased by non-residents without an AIP permit.
Choosing the Right Property
Selecting the right property involves researching locations, understanding market trends, and considering factors such as proximity to amenities, resale value, and legal restrictions.
Tip: Engage a reputable real estate agent with experience in working with foreign buyers.
Signing a Preliminary Agreement (Konvenju)
Once a property is selected, both parties sign a preliminary agreement (Konvenju) that outlines the terms of the sale, including the price, deposit (usually 10%), and timeframe for completion (typically three months).
Legal Consideration: This agreement is legally binding, and withdrawal can result in financial penalties unless valid legal grounds exist.
Conducting Due Diligence and Legal Checks
Before finalizing the purchase, due diligence must be performed, including verifying property ownership, confirming there are no outstanding debts, and ensuring compliance with planning permits.
Tip: Hire a notary public to conduct thorough legal checks and ensure a transparent transaction.
Obtaining Financing and AIP Permit (if required)
If financing is needed, investors must secure a mortgage from a Maltese bank. Non-EU buyers requiring an AIP permit should submit an application, which typically takes a few weeks for approval.
Legal Reference: The AIP permit is issued by the Ministry for Justice and Governance.
Signing the Final Deed and Making Payment
Once due diligence is complete and financing is secured, the final deed is signed in the presence of a notary. The buyer pays the remaining balance, stamp duty (5% of the property value), and notarial fees.
Tip: Ensure funds are available and all documentation is in order before the final signing to avoid delays.
Registering the Property and Settling Taxes
After the final deed is signed, the notary registers the transaction with the Public Registry, and the buyer must settle any outstanding taxes and fees.
Tip: Consider hiring a tax advisor to optimize property-related tax obligations and benefits.
Final Thoughts
Purchasing property in Malta can be a seamless process if approached with the right knowledge and legal guidance. By following these steps and consulting professionals, foreign investors can confidently invest in the Maltese real estate market while ensuring compliance with local laws.
