|
The legal system in Malta and Gozo is
based on English common law and the property buying process
in Malta is relatively straightforward as a result.
Permission has to be sought by certain groups
of non-residents for the purchase of freehold real estate
on either island, but a well regulated and documented purchase
process makes the entire experience pretty painless for everyone.
Since Malta joined the European Union back
in 2004 its laws relating to the foreign freehold ownership
of property have been simplified and are now basically in
line with the agreed EU standards; although some further refinement
is required relating to the restrictions that remain in place
and prevent certain EU citizens from freely purchasing more
than one property on the island.
The basic rules relating to foreign freehold
ownership can be divided into three categories: -
1) Rules for EU citizens who have lived in
Malta for at least five years
2) Rules for EU citizens who have not lived in Malta for at
least five years
3) Rules for Non-EU citizens
The first group, i.e., people who originally
herald from another EU member state but who have lived continuously
in Malta for at least the last five years can purchase more
than one property in Malta and do not require permission to
do so.
The second group, i.e., those who are citizens
of another EU member state and who reside elsewhere other
than in Malta or who have lived in Malta for less than five
years can buy a single residential property for the purposes
of permanent or semi-permanent residence and can purchase
business premises and they do not require permission to do
so.
The final group, which includes everyone else
basically, can purchase one piece of real estate on either
Malta or Gozo after they have received permission to purchase
in the form of an AIP Permit or ‘Acquisition of Immovable
Property by Non-Residents Permit’ from the Ministry
of Finance.
There are certain areas on both the island
of Malta and Gozo where permission is not required for any
property investor to buy more than one piece of real estate;
basically these are some of the most expensive areas on the
islands for property and those who can afford to buy there
are welcome to do so.
So, once a property investor has established
whether or not they require permission to purchase in Malta
the search for real estate that fulfils the specific objectives
of the investor can begin.
As real estate agents in Malta are not regulated
per se, an overseas property investor would be wise to conduct
a bit of due diligence on anyone they choose to assist with
the entire property buying process in Malta as a result.
The reason for this is that it is not uncommon
for an estate agency to be formed by a public notary or a
lawyer and for the lawyer to also be the legal representative
of the company, or for an estate agency to also be a property
development company for example. These conflicts of interest
could potentially present a property investor with a slight
headache!
There are many well established and reputable
estate agencies on Malta and Gozo though and with their assistance
an investor will be able to quickly target suitable properties.
Once real estate has been found that matches
the property investor’s specific objectives an offer
can be made to the vendor either directly or more usually
via the estate agent. Once the price has been agreed upon
it’s usual for both the vendor and purchaser to sign
the preliminary agreement and for the purchaser to pay a deposit
of 10% of the asking price as well as 1% of the stamp duty.
The preliminary agreement actually commits
both parties to the sale subject to the conditions of the
agreement being met. The conditions will include the purchaser
being successful in their application for an AIP Permit (if
required) and also on the property investor’s appointed
solicitor finding no issues with the title of the real estate.
If an investor has not appointed a solicitor
or notary to act on their behalf before they find a property
to purchase they should most definitely find one before signing
the preliminary agreement and parting with the 10% deposit.
It’s usual for the agreement to have
a valid duration of three months which should be ample time
for permissions to be sought and title searches to be conducted.
Once everything is in place for the sale to proceed to closing
the final contract of sale will be drawn up by the purchaser’s
solicitor.
When the final contract is signed the outstanding
balance for the cost of the property is due and the purchaser
is also expected to pay the rest of their stamp duty obligation
and their legal fees.
In terms of all the additional fees
a property investor needs to be aware of when considering
the Maltese real estate market, stamp duty is 5%, notary fees
usually come to a total of 1%, searches and title registration
are a flat fee of around GBP 160 as are fees for the AIP Permit.
Estate agency fees are paid by the vendor
and if an additional lawyer or notary is involved in the sale
process by the purchaser they will charge fees in addition
to aforementioned notary fees. Upon completion of the purchase
process the land registry office will receive notification
of the sale, all relevant documentary evidence and the property
purchaser will be registered as the new owner.
Basic
Malta information | Malta's
Market Battle | Moving
to Malta ? | Malta
- Buying Property|
Facts
about Malta | Typical
Properties| Places
to Invest | Investment
Advice| Investments
in Malta |
Why
buy in Malta | Malta
Property Buying Process | Malta
Investment Property Potential |
Malta
Property Investor’s Guide
|
