For many years, legislation has controlled the purchase of immovable property by non-residents. The reason is Malta’s small size. Malta’s membership to the European Union has brought some relaxation to these restrictions with regard to citizens of E.U. member states, though Malta obtained a permanent derogation to continue to control such purchases.
For many years, legislation has controlled the purchase of immovable property by non-residents. The reason is Malta’s small size. Malta’s membership to the European Union has brought some relaxation to these restrictions with regard to citizens of E.U. member states, though Malta obtained a permanent derogation to continue to control such purchases.
Purchases by Individuals:
Citizens of all European Union member states, who have resided in Malta continuously for a minimum period of five years at any time preceding the date of acquisition may freely acquire any immovable property without the necessity of obtaining a permit.
Citizens of all European Union member states who have not resided continuously in
Malta for a minimum period of five years may only purchase their primary residence or any immovable property required for their business activities or supply of services without the necessity of obtaining a permit.
Citizens of all European Union member states who have not resided continuously in
Malta for a minimum period of five years, require a permit to acquire immovable property for secondary residence purposes (“second home” in Malta).
Individuals who are not citizens of a European Member state may not acquire any immovable property (other than in a special designated area) unless they are granted a permit.
There are defined zones in Mata, referred to as special designated areas, where there are absolutely no restrictions to acquisition. There is also no restriction on acquisition through inheritance and there are also several other special exemptions.
Where property is purchased as a primary or secondary residence, with or without a permit, as the case may be, that property must be used as such. Furthermore, there are restrictions on allowing such properties to be rented out to other persons.
In the cases that a permit is required, the property must have a value of at least Lm50,000 (or Lm30,000 in the case of an apartment). In the case of the purchase of a primary or secondary residence, whether a permit is required or not, the purchaser must not have acquired any other immovable property in Malta (other than in a special designated area).
Different rules apply to the acquisition by bodies of persons, such as companies.
Some legal aspects of purchase:
There are two legal stages. Signing the promise of sale agreement is the first stage. The promise of sale agreement is really the most important one, since once signed it is a binding promise on both parties to sell/purchase, it will contain all the terms and conditions for the transaction, and cannot be withdrawn unless by agreement, or unless there is good legal reason. Nor can any terms be added or changed without mutual agreement. The law requires this agreement (and any extension thereof) to be in writing. Once the promise of sale agreement is signed, your notary will carry out the necessary searches to ensure that the vendor has good title and that there are no undisclosed burdens on the property. Among other things, the promise of sale agreement will state whether the property is freehold, or whether it is subject to an annual ground rent (emphyteutical grant), and in such case, whether it is temporary or perpetual. It is advisable to engage the services of a legal adviser at an early stage.
It is advisable to engage an architect to inspect the premises, which should ideally be done before signing the promise of sale agreement.
It is also a wise precaution for the purchaser to require a clause inserted in the promise of sale agreement whereby the vendor guarantees that the house is built according to planning permits, and to ask an architect to verify this before the final deed. Verification of planning permits will not normally be done by the notary.
The promise of sale agreement will state a validity period, i.e. a time limit by which the final deed should be published (if none is stated, then the law deems the period to be three months). Typically, this validity period is three- four months.
The purchase is completed by the signing of the deed of purchase, which is a public document.
This information is kindly provided by our Real Estate Partner
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