Buying property in Malta
Ok. Let me break this down for you. No matter what you do, you'll never be completely prepared for what's coming. Your expectations (if you have any) will not turn into reality. Your money will never be enough. Your dream home will turn into your worst nightmare… Enough negative thoughts… Let’s start.
First thing first.
Do not set a budget!
If you do, it better be a good one. If you are not a cash buyer and you want to know what's the most you can afford, a visit to the bank will definitely help you. In most cases, a home loan will cover 90% of the property purchase price and completion cost. Foreigners would have to prepare 20%-30% of the property value in advance though.
For every good reason there is to lie, there is a better reason to tell the truth.
Search for the right Property In Malta
Once you've made up your mind of how much you can spend on a property, you can actually start searching for one.
For most people, the location is the most important thing while others would like to own a certain type of property with a certain layout. You need to set up your priorities and be ready to compromise. A good real estate agent will be able to advise you on what you can expect to buy within your budget, as well as give you an idea of the count of properties that are available on the market.
Having that in mind, don’t forget that you can always open your favourite browser (hope it isn’t IE) and start swimming until you learn how to deep dive if you know what I mean. There are many real estate agencies and free online platforms, flooded with property listings. I’m sure you’ll find the right property, although it will be much more expensive than you thought it will be.
Other problems might occur during the whole procedure. Nothing out of this world. Always ask your notary for advice before you make a step forward!
Buying the dream property in Malta
Once you’ve chosen the right property, you are a step away from owning your dream home.
Depending on whether or not you are buying the property through an estate agent, you may wish to negotiate the price. A real estate agent would do this for you, else you will have to negotiate with the seller directly. Once you have agreed on a price and this has been accepted by the seller, you will go on to the next step: signing a Preliminary Agreement, known locally as a Konvenju. This agreement binds both you (as the purchaser) and the seller to the transaction and specifies a date by which everything must be completed. At this point, you will be required to pay1% provisional stamp duty as part payment of the full 5% (the balance of which is due on signing of the final deed), and an agreed deposit, usually 10% of the agreed price for the property as I mentioned before. For the first time buyers, the offer of saving the 5% duty stamp tax could still be valid.
In the weeks that follow, your notary will carry out the necessary research on the property to verify the legal title and ensure that there are no outstanding debts, hypothecs or liens on the property. Meanwhile, you will need to complete your side of the bargain, by ensuring your bank loan is in hand, as well as any required permits and forms stipulated by the Konvenju, while the vendor will complete all the aspects of his/her side of the deal.
Once all this has been completed, a date will be set to sign the Final Deed. This will usually be done at your bank's legal offices, or at the offices of your notary. At this point, the balance of the selling price is given to the vendor, as well as the balance due to the Commissioner of Inland Revenue for stamp duty where applicable and the notary fees to the Notary Public.
You will now take ownership of your property. The keys will be handed over and you are ready to move into your new home!
More information on this topic can also be found here.