Buying, Selling and Renting Property in Malta We are fully aware of the fact that purchasing immovable property in a foreign country is usually a delicate process whereby, in ensuring a legal and valid transfer of the property, you would normally get yourself dealing with a number of persons required for the purchase to go through. At JACS International Ltd, we strive to make the process easier by offering you a full range of services in this regard. We aim at providing a one-stop-shop solution and in availing ourselves of the various collaboration arrangements we have secured with the various key players in the sector, we have pride in offering also a cost-effective solution for our Customers. So let JACS International Ltd make ends meet with the vendors’, estate agents’, banks’, architects’, notaries’ and lawyers’ requirements for the purchase to go through. • The Procedure for Acquisition of Immovable Property in Malta The sale and purchase of immovable property in Malta is usually preceded by a promise of sale agreement entered into between the vendor and the purchaser. Upon being so instructed, our firm can appear on your behalf and sign any such promise of sale agreement, after which all necessary title verification procedures will start taking place. The promise of sale agreement is usually valid for three (3) months although a longer period may be agreed upon. A deposit of 10% of the sale price is usually given by the purchaser to the vendor upon the signing of the promise of sale agreement. Furthermore, a provisional transfer duty of 1% of the purchase price is payable by the purchaser. The balance of the price and of the transfer duty is then paid upon the signing of the final contract. The signing of the final deed will only take place after the due verification of the validity of the vendor’s title and the building’s conformity with all planning laws respectively. In accordance with our mission to provide a one-stop-shop service to our clients, we will also apply on your behalf for the so-called AIP Permit ([A]cquisition of [I]mmovable [P]roperty Permit) when this is required. This is a Government permit which a non-resident who wishes to acquire property in Malta must obtain. It usually takes about three months to have the permit approved. • Requirements for Acquisition of Immovable Property Residents of Malta (Maltese and EU citizens) An individual resident in Malta may acquire immovable property in Malta without limitation and without the need for obtaining prior permission. This includes citizens of Malta and also citizens of another EU State who have been resident in Malta for a minimum continuous period of 5 years at any time preceding the date of acquisition of the immovable. EU citizens who are not resident in Malta EU citizens who are not resident in Malta may also acquire immovable property in Malta without the need of obtaining any permit provided the property is to serve as the primary residence of the buyer or the property is required for the carrying out of such person’s business activity or supply of services. When it comes to a second residence a permit (so-called AIP permit) from the Ministry of Finance would have to be obtained. The property purchased must at least have a value of Lm30,000 for an apartment or Lm50,000 for a house. It should be noted that there are special elite designated areas where more than one property can be purchased without restriction and without the need for prior permission. Non-EU citizens Individuals who are not citizens of an EU Member State may purchase one immovable property in Malta after being granted an AIP permit by the Minister. The Minister will not withhold his permit if satisfied that the immovable is required for an industrial or touristic project approved by the Government, or in the case of an individual if the building is intended for his residence or that of his/her family. The same conditions regarding the value of the property to be purchased apply as per the preceding paragraph. Corporate bodies A body of persons, other than a commercial partnership, established in and operating from an European Union member state may freely acquire immovable property that is required for the purpose for which it has been set up Corporate bodies duly established under Maltese law or the law of another EU State may freely purchase immovable property in Malta without any need of obtaining a permit as long as it is controlled by and at least 75% of its share capital is held by a person (or persons) who is an EU member state citizen and who has resided in Malta continuously for five years. Any other body of persons will require a permit which is only granted if the property is required for an industrial or touristic project or for any other project approved in view of its contribution to the development of the economy of Malta. • Requirements for Renting Property in Malta Foreigners wanting to rent out property in Malta may do so freely and without the need for prior permission. However the letting of property purchased by foreigners in Malta is allowed as long as a letting licence is obtained from the Malta Tourism Authority. Licences will be issued once the property meets first class standard requirements or consists of a villa with a pool. Naturally tax would be payable on that income which is generated from the rent received. • Tax Payable and Approximate Total Costs and Fees Buying property in Malta: In addition to the price agreed with the seller, you will have to pay: • 5% of the purchase price as transfer duty; the 5% transfer duty is payable in 2 stages: 1% with the signing of the preliminary agreement, and 4% with publication of the final deed; • 1% of the purchase price as a legal and Notarial Fee; this fee is also payable in two stages: one third of it is paid with the signing of the preliminary agreement and the remaining two-thirds is paid with publication of the final deed; • Approx Lm250 for the searches into title, liabilities etc.; • Lm100 for the AIP permit; • if you have found your property through the services of a Registered Estate Agency, then brokerage fees are only due by the seller; if the property has been found through the services of a private agent (broker), then you must pay 1% as a brokerage fee to this private agent. Selling property in Malta: From the price paid to you by the buyer, you will have to deduct: • 1% of the purchase price for legal fees and expenses ; • Real Estate agency fees being 5% of the value of the property if sold through an estate agency, or 1% of the value of the property if sold through a broker; • 12% Capital Gains tax on the transfer value (an exemption from payment of this tax may apply if the vendor is a permanent resident permit holder and has been using the property as his main residence during the preceding 3 years). • Tax Issues There is no land/estate duty in Malta and the only tax liability arises upon the purchase or sale of the property. A purchase of immovable property is subject to a transfer duty payable by the purchaser which is set at 5% of the value of the immovable property. The seller, on the other hand, pays a tax amounting to either 12% of the transfer value or approximately 35% on the capital gain made by the sale. However residents would be exempt from paying this tax upon a sale of immovable property if such property was their main residence for at least 3 years preceding the transfer. 
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