Malta Real Estate Purchasing Laws and Procedures
Malta, strategically positioned in the Mediterranean, features a flourishing real estate sector that serves both local and international buyers. The island presents a range of investment opportunities, including rental properties, vacation homes, and speculative ventures. Its advantageous geographic location, strong legal framework, and rich cultural heritage make it a sought-after destination for those looking to invest in real estate or relocate.
This guide provides a comprehensive examination of the Maltese real estate market, detailing the legal frameworks, procedures, and unique aspects that make Malta an exceptional place for living and investing. It clarifies the specifics regarding Special Designated Areas (SDAs) and the process for obtaining an Acquisition of Immovable Property (AIP) permit, which are vital for individuals interested in Malta’s distinctive real estate landscape.
Increasing Expat Population
Malta’s expat community is expanding, driven by both EU and non-EU citizens choosing the island as their primary or secondary residence. The country offers various relocation options, including the Malta Nomad Residence Permit (MNRP), the Malta Permanent Residence Program (MPRP), and the Malta Citizenship by Investment Program, all of which necessitate the leasing or purchase of property in Malta. Whether you are an experienced investor seeking your next project, a first-time buyer considering a Mediterranean getaway, or someone looking to relocate, this guide equips you with the knowledge and confidence needed to navigate the Maltese real estate market successfully.
Special Designated Areas (SDAs)
Properties designated as Special Designated Areas (SDAs) are located in specific zones where both EU and non-EU nationals can buy real estate without needing a permit and can rent out their properties for income and long-term capital appreciation. SDA properties are highly sought after for their desirable features and prime locations, offering a range of residential options from studio apartments to penthouses.
Many SDA developments provide access to shared amenities such as gyms, swimming pools, spas, concierge services, and landscaped gardens. Some projects even feature exclusive parking for residents. SDAs are often conveniently situated near commercial hubs and shopping centers, such as those at Tigne in Sliema and the Shoreline in Kalkara. Residents typically enjoy breathtaking views and the opportunity to customize their units to meet personal preferences.
One significant advantage of owning an SDA property in Malta is that non-Maltese and non-EU investors face no limits on the number of SDA properties they can own, nor are they restricted from renting them out.
In contrast, non-EU nationals or EU nationals (including Maltese citizens) who have not continuously resided in Malta for the past five years may only acquire one non-SDA property as their primary residence, contingent upon obtaining an AIP permit. Any additional purchases of non-SDA properties will be subject to specific conditions evaluated on a case-by-case basis. Furthermore, properties acquired under an AIP cannot be rented out.
For EU citizens who have lived in Malta for five years or more, investing in an SDA property can provide the freedom, privacy, and luxurious lifestyle desired, along with potential rental income and long-term capital appreciation.
Applying for an AIP
When purchasing a conventional property in Malta, several steps and considerations are involved. First, identify the property and enter a promissory sale agreement with the seller, which includes a deposit and is subject to conditions such as property searches and confirming ownership rights. Following this, you must apply for an AIP permit by downloading the appropriate application form for individuals or entities and attaching a copy of the promissory sale agreement.
Once the application is complete, the AIP section aims to process it and issue the permit within 35 days. If any issues arise, they should be addressed immediately with the AIP section. Required documents include two passport-sized photos, a copy of the promise of sale, and a photocopy of your passport’s biometric page. A fee of €233 for the AIP permit is required, independent of the property’s value. Non-residents must also meet minimum property values to qualify for an AIP, which are updated annually; currently, the minimum is €143,410 for residential properties and €247,701 for other immovable properties.
After obtaining the AIP permit, certain conditions must be met, including using the property for residential purposes and submitting a copy of the notarial final deed to the AIP section after publication. Properties acquired through an AIP permit cannot be divided or sold in parts, and generally, non-residents can only purchase one immovable property in Malta unless it is located in an SDA. All non-residents wishing to acquire property must apply for an AIP permit.
Get in touch with us for individualized advice and support during the purchasing process of a property.
Expenses Related to Property Purchase
When purchasing property, consider the following expenses:
- Stamp Duty Charges: Pay 1% upon signing the Promise of Sale and 4% upon signing the Final Deed.
- Notary Charges: Typically range from 1% to 3% of the total transaction price, payable upon completion of the sale.
- Research and Registration Fees: Approximately €600 for property searches and registration.
- Architect’s Surveys: If required, budget around €500 for an architect’s inspection, especially if seeking a bank loan.
These costs are estimates and may vary based on the specific property and circumstances.
Purchasing Timeline:
- Step 1: Pay 1% Stamp Duty upon signing the Promise of Sale, along with a 10% down payment.
- Step 2: Any additional payment plan agreed upon.
- Step 3: Pay the remaining 90% or outstanding balance at the signing of the Final Deed, along with the remaining 4% stamp duty.
- Step 4: Consider additional fees, such as annual ground rent if the property is not freehold.
Freehold & Non-Freehold
Understanding the distinction between freehold and non-freehold properties in Malta is essential. Freehold ownership means complete and unrestricted ownership of the land and property, allowing the owner to use, sell, rent, or modify the property without limitations. Conversely, non-freehold properties are subject to ground rent, meaning the land is owned by a third party who charges an annual fee.
Non-freehold properties can be converted to freehold through negotiations with the ground rent owner. The cost of this conversion varies based on the property’s market value and ground rent. Freehold ownership eliminates the need to pay ground rent and provides greater control over the property, often resulting in higher resale values and increased long-term capital growth.
Summary
In summary, Malta’s real estate market presents a wealth of investment opportunities for local and international buyers. The island’s strategic location, robust legal system, and attractive properties make it a prime destination for real estate investment.
Special Designated Areas (SDAs) are highly sought-after for their luxurious living standards and exclusive amenities. Non-Maltese investors in SDAs can purchase multiple properties and use them for various purposes, including rentals. You can find several SDA properties with availability and pricing on our Malta SDA Properties page.
Purchasing a non-SDA property in Malta allows non-EU buyers to engage with the island’s cultural heritage, explore a range of architectural styles, and personalize their homes. It offers a unique chance to be part of the local community and own a piece of Malta’s rich history. If you need assistance with finding conventional Malta real estate feel free to visit our Malta real estate website.
Finally, to receive a copy of our “Malta Real Estate Services”, “Malta SDA Real Estate”, or “Relocating to Malta” brochures simply email us or use our contact form – we appreciate the opportunity to be of service!
Contact us today to receive a preliminary quotation or to schedule a call with our immigration advisors. Our immigration attorneys are government-licensed Authorized Registered Mandatories, a designation required by the Malta Government to file Malta citizenship or residency by investment applications. License: AKM-BALD.
