Procedures for buying property in Malta

The procedure for completing a property purchase in Malta is simple. On finding the right property and agreeing on a price, the buyer and seller sign a preliminary agreement binding the vendor to sell and the purchaser to acquire the property in Malta on the terms and conditions agreed upon and subject to good title and the issue of all relative permits. 

10% deposit is usually deposited with a Notary, Legal Advisor or Real Estate Agent on signing of this agreement. Such agreements are usually written out in English. This preliminary agreement is usually valid for three months during which time a Notary undertakes researches to prove good title and submits applications to the relative Government departments. The final contract is then entered into by the parties or their legal representatives when the full price is normally paid and vacant possession is given by the vendor on contract.

 

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CONDITIONS FOR NON-MALTESE CITIZENS


Individuals who are NOT citizens of a European Member State may acquire an immovable property after they obtain the relative permit (AIP permit) in terms of Chapter 246 of the Laws of Malta from the Ministry of Finance, unless they acquire property located in Special Designated Areas (SDA).

Special Designated Area (SDA)

Foreigners (EU and non-EU) may purchase any number of units within developments located in Special Designated Areas, without the need for an AIP permit, hence such purchases are not governed by any of the above mentioned conditions.

Double Taxation Agreements entered into with Malta : click here for list

High Net Worth Scheme or High Net Worth Individuals (HNWI)

  • EU Nationals
  • Non EU/EEA/Swiss Nationals nationals

     Those in any of the above categories, are bound by the following conditions:

From September 2011 under the new rules, property bought by foreigners had to be worth a minimum of 400,000.

People buying property under the Scheme had to spend a minimum of 90 days per year living in Malta.

There are two sets of rules, one for EU nationals and one for third country nationals.

EU nationals had to spend a minimum of 400,000 on the property or 20,000 a year in rent.

They had to have health insurance recognised across Europe and pay an application fee of 6,000 to cover fees the government will be incurring through a sub-contracted international firm to do the 'fit and proper' test to check whether the applicant is 'desirable'.

The application forms can only be submitted by Maltese warrant holders registered with the inland revenue department as authorised people.

They had to reside in Malta for a minimum of 90 days per year and pay 15 per cent tax on foreign income (with the possibility to claim double taxation relief) and normal tax on any local income. The minimum tax payable was 20,000 a year and 2,500 tax per dependent.

Non-EU residents also had to keep renewing their visa every three months or enter into a contract with the government with a financial bond of 500,000 and 150,000 per dependent, to effectively purchase permanent residency after five years, when the money will become the government's.

[Note to the above Non EU Nationals: The "qualifying contract" is the agreement between the Government of Malta and the applicant where the applicant pays the sum of 500,000 and 150,000 for every dependent (by means of a bond) which the Government of Malta holds as a voluntary deposit.

This Bond will be given back to the applicant if the applicant declares and proves to the Government of Malta that he or she has renounced to the special tax status granted under (HNWI) rules, before to the expiration of four years from the date of the qualifying contract.

If the applicant either intends to become a long-term resident before the expiration of four years from the date on which he has applied for special tax status in terms of high Net Worth Individuals Rules, or becomes a long-term resident prior to the expiration of four years from the date on which he has applied for special tax status in terms of the High Net Worth Individuals Rules he/she will forfeit all the rights over the Bond.

A non-EU Resident may become a permanent resident under the new scheme after four years, once he or she forfeits the 500,000 Bond.

Under the new regulations, residents will now be able to work or operate a business in Malta, whereby income derived from such activity is charged at 35%].

Their minimum tax payment will be 25,000 a year.

Existing permanent residents, will not lose their status unless they sold their property.

Applications received or copies of promises of sale signed before 15th September 2011 and which were not processed because the scheme was suspended will have the 6,000 application fee waived.


EU Nationals Non EU / EEA / Swiss Nationals
Property purchase price  400,000 400,000
Rental price 20,000 20,000
Tax rate 15% 15%
Tax Min. 20,000+ 2500 per dependant 25,000 + 5,000 per dependant
Residency 90 days (less 183 days away) 90 days (less 183 days away)
Health Insurance  Yes Yes
Application fee 6,000 6,000
Long term Residency N/A Renew visa or enter into a qualifying contract.

 

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Guidelines and information may be viewed on www.ird.gov.mt (see below link) and questions on the scheme may be sent to itu.mlei@gov.mt.

Other conditions for purchasing property apply to: http://www.ird.gov.mt/regulations/hnwi.aspx 

If this link does not worth e-mail us on info@baronproperty.com for the relevant pdf documents.