If you are still in doubt don’t forget there are professional companies who are more than willing to help you and answer any particular questions that you may have.

Our aim has been to give you hope in that you can find a property in malta, provide you with sound advice and help you get to grips with some of the main terminology.

You are now well armed and should have the the confidence to know ;

What to do :

• have clear & realistic objectives
• understand the traditional three stages of buying property
• decided on your budget
• decided on your preferred location

When to do it:

• going to an estate agent
• viewing properties
• going to a bank if a mortgage is necessary
• contacting a notary to take care of the convenue/konvenju (contract of sale)
• understanding the process and fees of an estate agent & notary

What to expect:

• know the three main conditions of buying a property (shell, semi-finished & finished)
• having an understanding of which property condition best suits your situation
• have an insight into what First Time Buyer’s are buying
• have a good overview of what are the most common types of properties that are bought
• know what the main types of properties are
• having an understanding of the benefits of each different property type
• realising which property type best suits you
• an overview into general questions that are often asked by First Time Buyers.

All the information provided has been general and remember nothing is set in stone.

Everybody is individual and all properties are individual. Your needs and wants could even change during this process and also whilst you are viewing property. Don’t worry be flexible and just adapt to this change as it’s quite a normal reaction to have.

Be confident that you will find the property you want and ask for advice if you need it.

We wish you luck and congratulate you on soon becoming a home owner

The stages are as follows:

1. Signing of the sale of contract (convenue/konvenju).

The Convenu/Konvenju is typically for three months, it will state everything that’s included with the sale plus the financial payments, terms and conditions. Make sure that you have been to your bank and enquired about mortgages and mortgage payments should you need one.

a. buyer pays 10% deposit of full price of property which is to be held with the notary

2. The notary will carry out the relevant searches during the term of the convenue/konvenju.

The Searches involve identifying the legal owner of property , official ground rent status, go through all legal ground work to ensure the smooth completion of the convenue/konvenju. During this time if anything comes up that could prevent the sale from happening then both parties are informed and are able to clarify the situation.

a. Buyer pays approximately 0.10% – 0.50% of the property price to the Notary for the searches carried out

b. Buyer pays 1 % Stamp Duty for Commissioner of Inland Revenue – the Notary deposits this money on account with the Commissioner of Inland Revenue and on behalf of the buyer

c. Seller pays 7% Stamp Duty for Commissioner of Inland Revenue – Notary deposits this aswell

3.  The notary will draw up the final contract or amend the existing one.

The searches have been carried out, financing is in place and everything’s in order. All parties will meet together and the signing of the contract will take place. During this meeting the final payments will also be made:

a. Buyer pays remaining part of the stamp duty for the Commissioner of Inland Revenue. This is 4% (5% – 1% already paid on account)

If this property is the buyers main residential property then they would be charged 3.5% Stamp Duty on the first €116,468  (Lm50,000) and then 5% on the remaining amount.

b. Buyer pays remaining price of property which is the total value minus the 10% deposit paid

c. Buyer pays Notary Fees which are approximately 1% total value of the property

d. Seller pays Real Estate Agent their fee depending on whether it’s a Sole or an Open Agency.

Capital Gains Tax

Capital Gains Tax is a Tax for the seller and only if the property is sold less than 5 years of owning it. This is due to the property being perceived as an investment/business transaction rather than a residential home.  Capital Gains Tax can be charged in one of the two following ways:

1. Flat Rate of 12% of total market value of property, or

2.  At a progressive rate of 35% .

These are general guidelines so please use the information for rough estimate purposes only. They may somewhat vary depending on the company and their individual services they offer.

We hope that you have found this article to be useful and that it shed some light on the financial and legal side selling and buying a property.

In the  next article we will discuss  ”Three most common conditions you can buy a property in Malta‘.