Property Buying Guide for Malta

The islands of Malta are a perfect holiday destination because of their natural beauty, peaceful way of life, English speaking, rich cultural heritage, a warm climate and beautiful sea. The place has been a favored travel destination the entire year around. Because of this, many foreign nationals want to invest in real estate in that country. The real estate investment process in Malta is relatively easy but there are some restrictions that apply to foreign nationals.

The Maltese property market is not open for everyone. There are some restrictions for foreign nationals owning a property in Malta. A foreigner can only buy a residential place in Malta that can be used as person’s primary residence and holiday residence during part of the year.

For foreign nationals who are from European Union Nations, the law is not that strict. Obviously there are some relaxations for them as the country itself is a part of the European Union. But citizens of other non- European nations would have to join together with Maltese citizens to develop a legal entity and buy a residential property there. The reason for doing so is that there is a limited amount of property on sale in the country.  

An individual foreign national can not buy property in Malta for commercial or industrial purposes. For buying such property, he or she has to join with the citizens of Malta to form a legal joint venture. The non-residential or foreign residential can form a limited liability company with localities. For this type of arrangement, approval from different government agencies is not required.

Above all restrictions, if you’ve made up your mind to buy a home in Malta, here is a quick step by step guide that can help you in understanding the rules and regulations of the country:

• Remember that any real estate purchased by a foreign national can be used as the purchaser’s primary residence or a holiday home.
• The value of the real estate being purchased should not be less than 50,000 MLT.
• The funds used to purchase the real estate must be derived from outside the country.
• The real estate purchased can not be rented out to anyone else.
• Such a residence can not be leased out to someone else when it is not in use by the purchaser or owner.
• On resale, the funds generated can be repatriated to the foreign national’s country of origin.
• On agreeing to these terms and conditions, buying a home is Malta is very simple.  Take the following steps to find a suitable property for yourself in Malta:
• Go through the details carefully. Read the terms and conditions.
• Contact the seller and clarify all your doubts and questions.
• The initial phase involves the execution of a contract for sale.  During this stage, the buyer has to pay 10 per cent of the overall purchase price. This agreement is valid for three months only.
• In the meantime, buyer has to arrange for finances and the seller has to make sure that there is no defect in the property. The buyer can arrange for the mortgage from HSBC, Lombard and the Bank of Valletta. Mortgages of 90 per cent are available to non- residents to assist with the property purchase.
• The final step of the process involves the payment of the remaining amount that is 90 per cent of the overall price of the property by the buyer. Both the parties enter into a contract that the buyer will take the physical possession of the real estate.
• A transfer tax of five percent is payable on the declared value of the property purchased.
• The Legal fee charged is from one percent to one and a half percent.