Purchase Conditions and Expenses for Foreigners When property is to be purchased and the price and conditions have been decided and agreed a preliminary agreement of sale is signed between the vendor and the purchaser on terms and conditions agreed upon and subject to good title and issue of any relative permits to purchase. On signing of the preliminary agreement a deposit of 10% of the price is lodged with Vendor or Legal Advisor or Notary or Estate Agent. This agreement is usually valid for 3 to 6 months and should the purchaser fail to conclude or complete the final agreement for valid reason at law the deposit will forfeit in favour of the vendor. During the agreed time by both parties the Notary will undertake and carry out all the necessary research of the property to confirm good title as well as submit the necessary applications to purchase to the relative Government Departments. Once all the necessary permits have been issued and researches have proved clear title to the property, the final contract of sale may be settled. The total balance (full price) of the purchase price plus legal expenses and stamp duty are paid on the signing of the contract and vacant possession is given by the vendor on contract. The agreements and contracts are normally written in English. The agreement is normally subject to the AIP (in the case of non-residents).
a. 5% Stamp duty.
b. Approximately 1% / 2% Notary fees.
c. Lawyer’s fee (Only if required- approximately 1% / 5%).
d. Finance Ministry fee € 233 (A.I.P.).
e. Searches, registrations etc (approximately € 600).
All expenses connected with the purchase of a property are the liability of the buyer; brokerage fees due to estate agents are borne by the seller.
Conditions to Purchase
Non-residents may freely purchase property in Malta, subject to obtaining an AIP permit, if such permit is necessary. An AIP permit will not be required to purchase properties in Special Designated Areas and, in the case of EU citizens who:
- Have been resident in Malta for at least five continuous years;
- Intend to purchase a property which is to serve as their primary residence; or
- Who intend to purchase a property for investment purposes.
If one of the spouses is an EU citizen and the other spouse is a non-EU citizen, both can likewise benefit from the exemption outlined above and acquire property without the necessity of obtaining an AIP permit, provided the acquisition is being made to establish therein their primary residence.
Also exempted is the acquisition of immovable property by an EU national for the conduct of one’s business activity or for the supply of services by such person. In such a case, a declaration reflecting the purchaser’s intention for the acquisition should be inserted in the relative contract of purchase.
Where the purchase requires an AIP permit, the property must satisfy a certain minimum value which changes periodically and which currently stands as follows: € 104,000 for apartments, maisonettes and €174,000 for villas, townhouses and other property.
EU and Non EU Nationals
Eu or Non Eu Citizens whose stay will exceed 3 months need to apply for a Residence Permit at the Immigration Authorities.
Both Eu and non Eu Nationals are only given permission to acquire only one residential property unless the second property is located in a special designated area such as (Portomaso, Tigne’ Point, Verdala Mansions, Cottonera Waterfront, Tas-Sellum etc). In such designated areas one may purchase any number of properties and do require a permit from the government to purchase even if you are acquiring as a second home. However an AIP permit (acquisition of immovable property) will be required and is normally issued from the Ministry of Finance within 2/3 months, subject to certain conditions.
An individual may also take up residence in Malta other than in terms of the Residents Scheme. Upon arrival, immigration authorities normally allow foreigners to stay in Malta for an initial period of three months. After that period one would have to apply to the Immigration Authorities to reside in Malta.
An individual may also become a resident of Malta as a consequence of taking up employment in Malta. A foreigner taking up such employment would require employment permission, which would be applied for by his employer. Self-employed persons may take up residence in Malta.
Citizens of all European Union member states, who have resided in Malta continuously for a minimum period of five years at any time preceding the date of acquisition, may freely acquire more than one immovable property without the necessity of obtaining a permit.
EU citizens, who have NOT resided in Malta for at least five years, but have the intention of purchasing their primary residence i.e. take up residence in Malta, do not require a permit. Nor do they require such a permit to purchase immovable property required for their business activities or supply of services.
Individuals who are NOT citizens of a European Member State may acquire immovable property after they obtain the relative permit (AIP permit) in terms of Chapter 246 of the Laws of Malta from the Ministry of Finance, unless they acquire property located in a Special Designated Area.