Once the property price has been agreed by both the buyer/s and seller/s there are several next steps in the Malta property purchase procedure, as highlighted below:
- Determining whether the property is subject to any Temporary or Perpetual Ground Rent. (if not the property as classed as Freehold)
- Does the property purchase require the acquisition of a loan? SA Consult can assist in obtaining of loans as we work closely with the main banks in Malta.
- Are there any works required for the owner to complete?
- What are the Promise of Sale Terms? Is the property purchase subject to any permits, acceptance of bank loans etc?
- The Deposit (usually 10% of the property price) is paid by the purchaser.
- The date for the Final Deed is agreed upon. If no date is agreed, the Promise of Sale Agreement is valid for three months, but can be extended if required.
The deposit is forfeited in favour of the vendor if the purchaser does not appear on the Final Deed without a valid lawful reason. It is therefore very important for you to take legal advice due to the above terms. At SA Consult we can provide no obligations services and can assist you at every stage of your property purchase in Malta.
During the period between the signing of the Preliminary Agreement and the Final Deed several items must be completed.
- The Notary employed by the purchser will within three weeks of signing the Promise of Sale register the said agreement with the Commissioner of Inland Revenue and pay 1% of the sale price on account of Duty due by the purchaser on the Final Deed of sale.
- The Notary is required to carry out searches on the property including clear legal title, whilst assuring that there are no debts, liens or hypothecs outsanding on the property.
- The purchaser must honour all the conditions as outlined in the Promise of Sale, such as applying for a bank loan and obtaining of building permits, if needed.
- The seller must in turn honor his side of the agreement, such as completing the works as agreed upon.
Once all of the above have been completed, the Final Deed can go ahead. If a bank loan is required, the Final Deed must be signed at the bank.
- The contract is read out and all parties are required to sign it.
- The balance due on the property (the purchase price less the deposit) is paid to the seller.
- All other oustanding payments must be settled, such as a loan settlement, Capital Gains tax and any estate agent fees. The purchaser will pay the required Stamp Duty and Notorial fees.
- The Notary then registers the contract at the Public Registry.
Stamp Duty and Charges
The Stamp Duty of 1% of the property purchase price must be paid upon signing of the Preliminary Agreement. The remaining balance is paid upon the signing of the Final Deed.
Stamp Duty is charged at 3.5% on the first €150,000 and 5% on the remaining property value, in the case that the property is being purchased for use an their ordinary place of residence.
Exemptions
As from the 1st July 2015 to the 31st December 2016 first time buyers shall benefit from up to €5,000 in stamp duty on the purchase of immovable property.
- Applicable on transfers of immovable property made between the 5th November 2013 and the 31st December 2016 (both dates included).
- The property must be the first immovable property acquired inter vivos by the purchasers (declaration to be included in the notarial deed).
- The first €150,000 of the transfer value of the immovable property shall be exempt from duty on documents (stamp duty).
- The benefit does not apply to promises of sale entered into before the 1st July 2013.
