A Guide to Buying Property in Malta

Procedure

The Maltese islands are the ideal home in the Mediterranean since they have managed to blend their rich historical past with a modern way of living, from Neolithic Temples to Mdina, a medieval walled town that has survived the passage of time, to Sliema a modern commercial centre with apartment blocks towering the shore line. Apart from its natural beauty, peaceful way of life, rich cultural - historical heritage and warm hospitality, Malta has much more to offer to foreigners.

One of the safest investments in Malta is property and if the past is a reflection of the future then the property market is looking as bright as ever.

Loan Facilities for Non-Residents

The banking system in Malta is of a high international level, and the main Banks are HSBC, Bank of Valletta, APS Bank and Lombard Bank. Loan facilities from local banks are available for the purchase of property by foreigners . The loan generally does not exceed 90% of the purchase price and the completion costs of the property of the property when the security given for the loan is a hypothec on the property itself. The interest charged is dependant on the security given.

Expenses

  • Duty on document or Transfer tax 5% of the value of the property
  • Legal Fees approximately 1%

* Ministry of Finance fee Lm100 on application (applicable to non-residents).

Conditions Governing the Purchase of Property by Non-Residents

Foreigners are entitled to purchase only one residential property in Malta or Gozo (unless one purchases in a Special Designated Area such as e.g. Portomaso) on acquiring an Acquisition of Immovable Property Permit (A.I.P Permit) from the Ministry of Finance, which normally is issued within three months. Subject to the conditions listed below:

  • The purchase price must be at least Lm30,000 in the case of an apartment and Lm 50,000 in the case of a house
  • Proof that funds for the purchase of the property have originated from abroad
  • The property is for the sole residential use of the purchaser and his immediate family or guests when accompanied by the owner. The residence may only be rented out if the property enjoys the use of a swimming pool, provided that the property is licensed as holiday accommodation by the Hotels and Catering Establishments Board or if the property purchased is in a Special Designated Area.

Conditions for permanent Residency

Any non resident may submit an application for permanent residency permit, subject to the following:

  • If you have an annual income of Lm10,000 or Capital of Lm150,000
  • If you remit annually to Malta Lm6,000 in your respect and Lm1,000 for each dependant
  • You must either purchase property valued at not less than Lm50,000 (Lm30,000 in the case of an Apartment) or lease / rent property for not less than Lm 1,800 per annum.

Concessions for permenant residents

Income tax - A flat tax rate of 15% on all income (less tax rebates as applicable) received in or remitted to Malta, from either local or foreign sources, subject to a minimum payment of Lm 1,000 per annum.

Exemption from Customs Duty - Household and personal effects, furniture and other domestic articles (excluding firearms and other weapons of all kinds) may be imported free of duty if imported within six months of your arrival in Malta or from the date of residency permit which ever is the later.

One private motor vehicle may also be imported free of duty by a person (husband and wife counting as one), provided that it has been in your possession for a minimum continuous period of six months immediately before the date of permanent residency. Customs duty will become payable on the value of the vehicle as assessed by customs at the time it is transferred to a non entitled person.

Repatriation of Capital and Income for Temporary and Permanent Residents - Non-residents may repatriate all their funds held in Malta and this applies to:

  • Any unspent remainder of capital you brought to Malta
  • Any income that has accumulated during your stay
  • Any proceeds from the sale of your property and \or other investments in Malta.

The above rules and costs may vary from time to time. It is important to use the services of and independent lawyer. Please Request your lawyer to supply you with the up to date situation on purchasing property