Buying Property in Malta as a Non-Resident
Whether you are considering relocating long-term or planning to enjoy your island property during vacations, purchasing real estate in Malta involves several important steps related to documentation and taxes.
Property Rights for Foreign Buyers
Foreigners purchasing properties in Special Designated Areas (SDAs), also known as Lifestyle Developments, enjoy the same property rights as Maltese citizens. However, if a Third Country National (TCN) wishes to buy property outside of an SDA, they must first apply for an Acquisition of Immovable Property (AIP) permit.
AIP Permits: Conditions for Purchasing Property in Malta
Non-Maltese nationals face specific restrictions on property purchases. Generally, foreigners can acquire one residential property with an AIP permit, which must be used for personal occupancy, except when buying in an SDA.
Non-EU Citizens
Non-EU citizens must obtain an AIP permit for properties outside of SDAs. The application process typically takes about 35 days and incurs a fee of €233. TCNs purchasing with an EU spouse can enjoy the same rights as their partner, provided the purchase is made jointly.
EU Citizens
Recent legislative changes have lifted the AIP permit requirement for EU citizens who have resided in Malta for at least five years. They can now buy up to two properties outside of SDAs, one of which must be their primary residence. Non-EU citizens can only buy one residential property outside an SDA, which must also be their primary home. No AIP permit is needed for EU citizens purchasing property for business purposes.
Recent Changes in Legislation
The Acquisition of Immovable Property (AIP) section within the Capital Transfer Duty (CTD) Department manages applications from non-residents seeking to acquire property in Malta. Recently, TCNs who have legally resided in Malta for five continuous years can apply for long-term residency status, eliminating the need for an AIP permit. Successful applicants can also access various incentives and reductions in stamp duties and property taxes.
Understanding Lifestyle Developments and SDAs
Luxury developments are increasingly prominent in Malta, particularly in prime locations. These SDAs often feature amenities such as reception areas, underground parking, and communal pools. The key benefits of purchasing in an SDA include equal rights for foreign nationals as Maltese citizens and no need for an AIP permit. Additionally, there are no restrictions on leasing properties or limits on ownership within SDAs, making them attractive investments.
Property and Tax Residency in Malta
Malta has implemented several residency programmes to attract high-net-worth individuals as tax residents. Here’s a brief overview of property requirements under various programmes:
| Programme | Buying | Renting |
|---|---|---|
| Residence and Visa Programme | Invest in property worth €320,000 (€270,000 in the South/Gozo) | €12,000/year (€10,000 in the South/Gozo) |
| Global Residence Programme (GRP) | Invest in property worth €275,000 (€220,000 in the South/Gozo) | €9,600/year (€8,750 in the South/Gozo) |
| Residence Programme (TRP) | Invest in property worth €275,000 (€220,000 in the South/Gozo) | €16,000/year |
| Individual Investor Programme (IIP) | Invest in property worth €350,000 | No minimum property threshold |
| Ordinary Residence | No minimum property threshold | No minimum property threshold |
Types of Property Available in Malta
International buyers can choose from diverse property types, including Houses of Character, Townhouses, Luxury Apartments, Magnificent Palazzos, Traditional Terraced Houses, and Mediterranean Villas. Your choice will depend on your lifestyle preferences, whether you seek luxurious penthouses with stunning views or charming historical homes.
Eligibility Requirements for International Buyers
When purchasing property in Malta, foreign buyers must meet several general conditions, including:
- A valid travel document.
- A recognized health and life insurance policy.
- Proof of financial stability.
- A clean legal background.
Step-by-Step Process for Purchasing Property in Malta
Buying property in Malta is a sound investment, as the market remains stable and continues to grow. Here’s a step-by-step guide:
- Choose a Reputable Real Estate Agency: While direct purchases from sellers are possible, working with an accredited agency like Belair Property ensures access to experienced agents who can assist in finding the ideal home.
- Select an Architect: Once you’ve identified a property, engage an architect to inspect it and ensure all structural aspects are in order.
- Choose a Public Notary: A notary will prepare the necessary documents for the Promise of Sale and verify the title while preparing the final deed.
- Sign a Promise of Sale: Your agent will negotiate terms with the seller. Once agreed, a Promise of Sale (known as “Konvenju” in Maltese) will be signed at the notary’s office.
- Sign the Final Deed of Sale: This takes place at the notary’s office, where you will pay the remaining purchase price, agency fees, notary fees, and stamp duty. If financing through a bank, this may occur at the bank’s office.
Note: If the property is outside an SDA and you are a non-EU citizen or an EU citizen residing in Malta for less than five years, you must obtain an AIP permit before signing the Promise of Sale.
Costs and Fees When Purchasing Property in Malta (refer to Malta Property Tax explained)
- Architect Fees: Usually range from €200 to €500 for inspections and necessary documentation.
- Stamp Duty: Calculated at 5% of the property value, with 1% payable upon signing the Promise of Sale and the remaining 4% due at the final deed signing.
- Notary Fees: Typically 2–2.5% of the property value for preparing necessary documentation and conducting due diligence.
- Energy Performance Certificate (EPC): Required, the responsibility of the seller.
- Estate Agency Fees: Generally, agencies charge 5% + 18% VAT of the purchase price.
Obtaining a Home Loan in Malta
Acquiring a home loan in Malta is feasible through local banks. You’ll need to demonstrate stable income, and a reputable agency like Belair Property can assist you in navigating the process.
Advantages of Buying Property in Malta
Malta remains a preferred investment destination, with property values steadily increasing. Homeownership rates are high, driven by expats and local demand. The strategic location offers easy access to Europe, and the English-speaking population, along with favorable tax laws, attracts international businesses. Residents enjoy a low tax rate on foreign income and a high quality of life in a safe environment.
Living in Malta
If you are a foreign national considering Malta as your permanent home, now is an excellent time to make the move. The Maltese government actively supports expats through various residency programmes, allowing indefinite residency and easy access to EU countries.
Where to Live in Malta
Despite its small size, Malta offers diverse living options. For a vibrant city life, consider St. Julian’s and Sliema. For more spacious, peaceful surroundings, nearby areas like Swieqi and San Gwann are ideal. Those seeking luxury may prefer villas in Naxxar or Mellieha, while history enthusiasts might opt for towns like Rabat and Birkirkara. Gozo, Malta’s sister island, is perfect for those seeking tranquility.
How We Can Help You
At Belair Property, we understand that our role extends beyond that of a real estate agent. We are your partners in finding the right home or business premises that align with your vision for the future. We focus on servicing the luxury residential and commercial property market in Malta, providing clients with a comprehensive turn-key real estate service.
Whether you are moving on or moving forward, trust Belair Property for an exceptional real estate experience.
