Buying and selling property in Malta is straightforward and safe. You will find lots of opportunities to make great investments, and find a straightforward system that effectively gets things done in a timely manner.
It is, however, imperative that you appoint a notary at the very beginning of the sale process who will guide you through each step and ensure that everything is done correctly.
Once a buyer has been found for a property, both the buyer and seller will sign a Promise of Sale agreement. This outlines the following things:
- the agreed sale price
- terms and conditions including repair work that must be completed and furniture and fittings which are included
- the timeframe in which the deal must be completed
- the amount of deposit which the buyer owes the seller.
This agreement, which the Notary will draw up for you, binds both parties until the signing of the final deed of sale. On signing this preliminary agreement, the deposit is lodged with the Notary or estate agent. If the buyer fails to sign the final deed (valid legal reasons notwithstanding) then this deposit will be forfeited in your favour. The buyer will also need to pay the first fifth of the Stamp Duty owed, equal to 1% of the purchase price.
Both parties agree the time between signing the Promise of Sale and the final deed. However, three months is standard and, during this time, the Notary will register the Promise of Sale, carry out any conveyance and apply for any necessary permits.
Owners can sell their property at any price without restriction and, in the case of foreign nationals, the entire sale price may be repatriated abroad, a process by which the Notary would need to apply for clearance from local tax authorities before signing the final deed of sale.
Capital gains tax may be charged on the sale of immovable property. If your property was acquired after 1st January 2004, the tax rate is 8%. Property acquired before January 2004 is taxed at 10%. If you do not trade in immovable property but are transferring such property within five years of acquisition, you will be taxed at 5%.
Capital gains tax is not charged when the property being transferred has been the owner’s own residence for at least three consecutive years immediately preceding the date of transfer and has been disposed of within 12 months of vacating the property. There are other exceptions and your notary will be able to advise you of your eligibility for these, which include transfer following separation and sale by court order.
If you are selling a property that you have inherited (Causa Mortis), the rate is charged at 12% on the difference between the transfer value and the acquisition value. If inherited before 25 November 1992, different conditions apply and the rate of tax is equivalent to 7% of the transfer value.
If you look likely to pay Capital Gains, it is always worth speaking to your Notary and to any other tax specialists, as reductions in tax due are possible when the seller puts forward their tax return and a detailed account of any expenses incurred during the selling process.
As the owner of a property, you must ensure that you have an Energy Performance Certificate that you can show prospective buyers and then hand over to the new buyer at the point of Promise of Sale. These are required by EU law due to the Energy Performance of Buildings Directive (EPBD) and also by Maltese Law, specifically the Energy Performance of Buildings Regulations (EPBR) of 2012 (LN376/2012).
Energy Performance Certificates are there to help potential buyers understand a property’s energy efficiency, as well as to provide suggestions as to how that might be improved. It is similar to the energy label on appliances.
An EPC is carried out by an Energy Performance of Buildings (EPB) assessor who is registered with the Building Regulation Office (BRO). The BRO charges a €75 registration fee for each certificate registration. There is no set fee for the EPC itself, as it is up to the assessor to set a price. A registered list of assessors can be found on www.epc.gov.mt. An EPC is valid for 10 years from the date it is issued and the same certificate can be used if the property is sold within that 10 years, provided that no major changes have taken place to the property.
An owner who fails to produce the EPC to the BRO when requested to do so may incur a fine ranging from €500 to €5,000.
Totally unique in Malta, RE/MAX’s Exclusive Listing Programme offers an unparalleled service with outstanding results. As a homeowner, if you are looking to simplify and speed up the process of selling your home, it is well worth considering this very exclusive programme.
The results speak for themselves: over the last two years, it has taken a mere 36 days, on average, to sell one of these properties.
Properties advertised with this programme are undoubtedly the most saleable homes in Malta and Gozo at any given time. They are hand picked, and placed with care and special guidance. Our sales associates are specially trained to go into every detail in order to ascertain that the property in question is in good standing with MEPA regulations, that it is in a decent state of repair, and that the homeowners are motivated to conclude a Promise of Sale described above, if and when the price and conditions are met.
With this close inspection guaranteed, RE/MAX Malta offers buyers prudently-priced and high-quality properties, and they are thus in very high demand. This benefits both sides of the buying relationship, as homeowners can feel confident that they will be able to move onto their dream new home as soon as possible.