Buying a Home
The first step to buying a home is thinking about what you want and what limits you. The following are a few things to consider:
What area would you like to live in?
Modern property or a traditional one?
Do you require an outdoor area like a terrace or garden?
Will you be needing a garage?
This process will not answer all your questions, but it’s a necessary first step before speaking to one of our Sales Consultants. Our Sales Consultants will listen to your requirements. They will guide you through any further questions and queries by providing informed suggestions. Once you’ve filled in the necessary paperwork which authorizes us to work on your behalf, we’re good to go.
The Search for Buying a Home
This is by far the most difficult, tiring part of buying a home if you did it alone. Luckily, with a CENTURY 21 Sales Consultant by your side, this process is made a lot easier. Our experienced Sales Consultants will provide a customized home search plan to find your perfect property, at the right price. When you decide on a list of properties to view that you believe fit your requirements, your Sales Consultant will start the laborious process of organizing viewing appointments. All you need to do is just turn up for your viewing appointments, and you’re ready to go!
As you view the various properties, your Sales Consultant will outline the advantages and disadvantages of the choices available to you to help you make more informed decisions. Once you’re ready to make these decisions, your Sales Consultant will start negotiating to obtain the best deal possible for you.
The Paperwork Involved when Buying a Home
You’ve finally found your dream home and a mutually beneficial deal has been struck. Now you’re ready to take the next step. Take out your pen; it’s time to sign the Promise of Sale Agreement or as it is known locally, Konvenju.
This agreement binds both the buyer and seller into finalizing the sale transaction on a set date; this usually takes around 3 months. It contains details like the price and payment of the property, and other terms and conditions agreed upon by the parties.
When this document is signed, the sum equal to 10% of the final price is paid by the buyer as a deposit. This is kept by the Notary or by the seller himself (depending on what was decided in the agreement) until the Final Deed is signed. There will also be a need to pay a 1% temporary government stamp duty.
The Legalities Involved when Buying a Home
To back out of this agreement, the buyer needs to have a valid, legal reason. This usually includes instances when the bank of the customer’s choice does not authorize a loan, the building permits are not in order, or any conditions stated in the agreement are not met. Of course, our professional Sales Consultants will guide you through the whole process, ensuring that you are informed.
During the term of the Promise of Sale, the Buyer needs to appoint a notary. They will undergo the needed searches to confirm the seller’s legal title to the property and make sure there are no outstanding debts or other irregularities.
The Last Few Steps of Buying a Home
The buyer and seller both finalize all the conditions listed in the Promise of Sale; the customers in particular need to make sure to prepare for a bank loan if they’re making use of it, as well as examine permits for the building. Don’t worry; our Sales Consultants will be by your side throughout the whole process to ensure that this journey is as smooth and hassle free as possible.
If first time buyers are EU residents, purchase a principal residence and do not own another property worldwide, they pay the following duty:
0% on the first €150,000
5% on the balance
(Please note that this is a Government of Malta scheme currently valid until the end of 2017)
Non-first time EU buyers pay duty as follows:
3.5% on first € 150,000
5% on balance
Purchasers pay a full 5% on second residence, commercial properties, etc.
Tax is paid on net price
[Note: Buyer pays 1% provisional stamp duty on Promise of Sale and balance on final deed]
EU Citizens who have lived in Malta for more than 5 years can buy property without any restrictions.
EU Citizens who have lived in Malta for less than 5 years can purchase their primary residence (permanent residence) without requiring any permits. However, to buy their secondary property, they need an AIP (Acquisition of Immovable Property) permit.
Non-EU Citizens must apply for an AIP (Acquisition of Immovable Property) permit which can take up to around 4 months to be issued. With this permit in hand they are allowed to purchase:
An apartment for the price of € 105,000 minimum
Any other type of property from € 136,000 minimum
However, the AIP allows the applicant to buy only one property. The only exception is Special Designated Areas which include areas such as Portomaso, Cottonera Development, and Smart City. Special Designated Areas provide an exception to the rules on residency permits in Malta, in that non-Maltese purchasers may buy property with the same rights as Maltese citizens, thus not requiring a license from the Maltese government. They can also buy more than one property in these Special Designated Areas.