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Buying in Malta |
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Procedures to purchase immovable property
Purchasing your residence is one of the most important decisions one will ever do. Such a decision should be well thought out, and professional help should always be sought so that you are aware of your rights and of any limitations.
Steps to follow before you start looking for a property:
- Area you are used to live, or where would you prefer?
- Size and type of property presently and in the future?
- Type of finances needed?
- Tastes?
- Environment and neighborhood area?
Such information is very important so that your property consultant can be in a position to offer a wide exposure of properties that really suite your requirements and tastes. Such information will eventually help out the negotiations on your behalf, and a satisfactory deal will be reached to all parties involved.
Once the immovable property is selected and an agreement is reached the following should be confirmed before actually going for the promise of sale agreement:
- Price
- Ground rent
- Terms of agreement
- Payment terms
- And additional woks to be completed by owner
- If any furniture is going to stay, like fitted kitchen, sofas etc
- If any appliances are going to stay
- Deposit on account. ( normal practice 10% as a sign of goodwill)
Promise of sale agreements have to be registered with the Inland Revenue within 21 days from the date it was signed and a 1 % provisional duty is payable on the contract value of the property being sold. Such amount paid will be set off against the final duty payable.
It is important to notice that the deposit is forfeited in favour of the vendors should the purchasers does not appear at the final deed without a valid reason at law.
During the term of the promise of sale the notary will carry out researches on the property, verifies legal title and ownership, any hypothecs or any outstanding bills on it.
Any conditions listed in the promise of sale agreement should be honoured from the purchaser and any time frames such as a bank loan application or a building permit application should be made in their respective time stipulated.
Following every condition of the promise of sale agreement is completed then the notary will notifies the parties to proceed for the final deed. If eventually a bank loan in required for the purchase, the final deed will be processed at the purchaser’s bank and than keys of the property are handed over to the purchaser.
Such procedures for the clients are not common and one can go through such procedures once or twice in a lifetime. While notaries and estate agents go through such procedures on a daily basis and thus will avoid mistakes or any erroneous decisions.
Certain conditions for Property Purchase.
Non-Maltese persons may purchase an immovable property in Malta under certain terms and conditions:
- in case of an apartment or a maisonette, a preliminary agreement should be made of not less than Lm 39,800 ( € 79,600 ) , and not less than Lm 66,200 (€ 154,000) for any other type of immovable property. If property being bought is less that the above stipulated benchmark prices but is in a shell form situation or needs some renovation, than such costs to complete or to refurbish property together with it’s selling price should exceed the above benchmarks.
- An A.I.P. ( acquisition of Immovable Property ) Permit from the Minister of Finance is required and is normally granted within a period of 3 months.
- A non-resident may sell his/her property to another non-resident once again approval is required from the Minister of Finace.
- The property being purchased must be used solely for personal use.
- 5 % stamp duty of the immovable property contract price, approximately 1% notary fees and Lm 100.00 due to the Minister of Finance, should be added together with the purchase price.
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.
Foreign Residents
All the above concessions and conditions apply to foreign residents with the following exceptions:
• EU citizens may apply for a Residence Permit at the Immigration Department, Police Headquarters, Floriana if they intend to stay in Malta for more than three months.
• For non-EU citizens, extended visas to remain in the country may be obtainable from the Immigration Department, Police Headquarters, Floriana, at 3 month, 6 month or annual intervals.
• Proof of income and health cover is required by the authorities to ensure the resident will not be a burden on the country.
• Local income tax payable is limited to income received into Malta and/or income arising in Malta. (If resident in Malta for less than an aggregate total of 6 months per calendar year no tax whatsoever is due).
Should you require any information or advice about selling or buying an immovable property we would be more than glad to hear from your end either through email info@4homes.com.mt or contact us on (356) 2142 4416 or (356) 7942 4415. |
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