Malta Real Estate Laws and Procedures Explained
Malta, a Mediterranean gem, boasts a thriving real estate market that attracts both local and international buyers. The island offers diverse investment opportunities, such as rental properties, vacation homes, and speculative projects. Its strategic location, robust legal system, and rich cultural heritage make it an attractive destination for real estate investment and relocation.
This guide outlines key aspects of Malta’s real estate market, including the legal processes, Special Designated Areas (SDAs), and requirements for obtaining an Acquisition of Immovable Property (AIP) permit.
A Growing Expat Community
Malta’s expat population continues to rise, driven by both EU and non-EU citizens choosing the island as their home. Several relocation options are available, including the Malta Nomad Residence Permit (MNRP), Malta Permanent Residence Program (MPRP), and Citizenship by Investment Program. Each of these programs involves property transactions. Whether you’re a seasoned investor or a first-time buyer, this guide helps you navigate the Maltese real estate market with confidence.
Understanding Special Designated Areas (SDAs)
SDAs are specially zoned areas where both EU and non-EU nationals can purchase real estate without needing a permit. These areas offer luxurious living spaces with shared amenities like gyms, swimming pools, and parking. Located near key commercial centers, SDA properties are highly desirable for their prime locations and high-end features.
Non-Maltese and non-EU buyers can own multiple SDA properties, which they can also rent out. On the other hand, non-EU nationals or EU nationals who have not resided in Malta for at least five years are typically limited to buying one non-SDA property as their primary residence. Such purchases require an AIP permit, and the properties cannot be rented out.
Acquiring an AIP Permit
For non-SDA properties, buyers must first sign a promissory sale agreement and then apply for an AIP permit. This process involves submitting essential documents like the sale agreement, passport copy, and photos. The application process typically takes around 35 days and incurs a fee of €233. Non-residents must also meet specific minimum property value thresholds to qualify for the permit.
Once the AIP permit is granted, the property must be used strictly for residential purposes. Additionally, it cannot be sold in parts, and buyers are limited to purchasing one property unless it’s located in an SDA.
Costs and Timeline for Purchasing Property
Purchasing property in Malta involves several costs that buyers should consider:
• Stamp Duty: 1% paid at the signing of the Promise of Sale, with the remaining 4% due at the signing of the Final Deed.
• Notary Fees: These typically range between 1% and 3% of the sale price.
• Research Fees: Around €600 for property searches.
• Architect’s Survey: Approximately €500, if required for inspections.
Freehold vs. Non-Freehold Properties
Malta offers both freehold and non-freehold properties. Freehold ownership provides complete control over the property and land, while non-freehold properties involve paying annual ground rent to a third-party owner. In some cases, non-freehold properties can be converted to freehold, which may increase the property’s resale value.
Conclusion
Malta’s real estate market presents a variety of opportunities, whether you’re interested in luxury properties within SDAs or historical homes outside of them. SDA properties are perfect for those seeking a flexible investment option with luxury amenities, while non-SDA properties allow you to connect with Malta’s rich cultural heritage.
