Buying Procedures Locals
Purchasing a property in Malta may be a tedious process for many people, especially if one does not have any experience, We are here to guide and advise you throughout the whole process.
The ‘Promise of Sale’ (also known as the ‘Konvenju’) is held at the Notary of your choice. The Promise of Sale agreement is then drafted based on the terms and conditions agreed upon and signed by both parties in the presence of the Notary.
A deposit usually equivalent to 10% of the sales price is paid upon signing of the ’Promise of Sale’ and is (in the majority of cases) held by the Notary (unless otherwise agreed).
The Notary then conducts the necessary property searches and obtains the necessary documentation to satisfy the legal requirements of both parties. During this time, we recommend that an architect visits the property to ensure that it is in good structural condition and that all planning permits are in order. This is the purchaser’s responsibility, as the Notary only makes sure of a clean title and is not responsible for the property state or building permits issued on the property.
If you require a bank loan to proceed with the purchase, you should visit the bank and take a copy of the ‘Promise of Sale’ together with any relevant documentation for the application to be processed. It is also advisable to hold discussions regarding possible bank finance or home loans with the banks prior to the signing of the ‘Promise of Sale’. Belair Property has very strong connections with all the leading banks and our team can introduce you to all major banks when necessary. (Note: When a bank loan is being applied for, a clause in the ‘Promise of Sale’ is usually included, where the agreement is ‘subject to bank finance being approved’, usually for a limited number of weeks.)
Once the notary’s searches, architects report and bank loan (if applicable) are all in place and approved, you as the purchaser can then appear on the final deed, where funds are exchanged, and the keys are handed over. Legal fees vary according to what is required in terms of searches, bank loans, etc. The usual rate is between 1% and 2% of the sale price but this can change depending on each case. The following link provides useful information on the expected fees due to the Notary on final deed. https://www.notariesofmalta.org/
Buyer’s Expenses:
- Stamp Duty to be paid by the buyer:
- 1% of the Purchase price paid on signing of the ‘Promise of Sale’ agreement;
- 4% of the Purchase price payable on final deed;
Stamp duty payments may also vary according to the terms set out below..
If the buyer is a ‘First-time’ Buyer the total value of Stamp duty to be paid is as follows:
- No stamp duty on the first €200,000 of the purchase price;
- 5% on the remaining balance of the purchase price
The term ‘First-time buyer applies to any individual that has never owned a property worldwide.
If the Buyer has owned property in the past but is still purchasing for the purpose of acquiring a main residence the total Stamp duty to be paid is as follows:
- 3.5% of the value on the first €200,000 and
- 5% for any value above €200,000.
- If a property is purchased as a second home or as an investment / commercial property, the stamp duty is paid at the rate of 5% of the sale price.
Urban Conservation Areas – Stamp Duty Deduction
Exemptions are currently in place to serve as an incentive, in the event that, the property in question is located in an “Urban Conservation Area”. If property is purchased in one of these localities no Stamp duty rate is paid on the first €750,000 and 5% on the balance of the purchase price.
