The Maltese real estate market has increased its worth, earning it an enviable reputation for being highly profitable and stable.
The purchase of property in Malta is among the most secure real estate transactions in Europe. In recent times Malta has seen Maltese Islands have received an increase in their value and have been proclaimed in Europe’s most lucrative investment options for property.
There is a Maltese legal system allows for the immovable property of Malta that does not impose a tax on wealth or ownership. This has been the catalyst that has brought foreigners to settle at one or more of Malta’s Maltese islands.
A new policy on high-rises has led to more growth in the property market, leading to massive, multi-story buildings.
The following article we’ll offer some suggestions for people who are interested in purchasing real estate in Malta but aren’t quite sure of how to do it.
What should you consider when purchasing property in Malta?
If you are considering investing in properties in Malta it is important to keep two main considerations that are important: location and profit.
Even on an island that tiny as Malta it is important to choose the right location. In order to maximize profits it is essential to ensure that your investment is in a thriving area which can attract prospective tenants.
The island is very diverse, and a thorough study of the different areas can aid you in deciding.
Where can you buy property in Malta?
Based on the circumstances of your life depending on your situation, you’ll need to take into account your own personal requirements. For someone who is just starting out You may want to be near the bustle and excitement in Sliema or St. Julians, in close proximity to bars, restaurants and nightclubs. If you are a parent it is worth considering areas that have a high-quality school, public gardens , and supermarkets.
The most sought-after areas to purchase a house in Malta offer stunning views of the sea close to all the essential amenities , and also benefit from the local transportation routes. A house or an apartment in these areas is an excellent investment
Sliema
St. Julians
Valletta
Mellieha
San Pawl Tat-Targa
Madliena
It is also worth noting the island that is a sister to Gozo. A property purchase in Gozo can prove extremely profitable over the next few years, with prices for real estate being on an increase in the past few years.
What are the most common kinds of properties available in Malta?
The property you choose to purchase will be based on the lifestyle you would like to live.
Apartments
Living in an apartment in Malta is popular, especially for foreigners. The properties located on Malta’s Maltese Islands come in all sizes and shapes, however apartments are generally the most affordable choice. There are a variety of apartment complexes available and each one has its own distinct characteristic. A smaller one could be the ideal choice in the event that you’re looking for an intimate bolt hole. But, if you’re looking for an apartment with stunning ocean views, you’ll have to find a house in a block with a high-rise.
Click here for the latest properties for sale in Malta.
Villas
If you’re looking to purchase a home in Malta villas are an excellent choice. They usually have private gardens and pools, and typically located close to some of Malta’s most well-known tourist attractions villas located in Malta provide the ideal blend of peace and adventure.
Maisonettes
Maisonettes are homes located in Malta usually comprising 2 or 3 floors. They are an ideal option for those looking for more space and more privacy than apartments. Maisonettes generally have an entry and outdoor space and usually have the option of a terrace or garden.
Period Houses
A period home in Malta is an excellent opportunity to acquire Malta’s culture and history as well as enjoy the modern amenities on the island. They can also be found in prime real estate areas which makes them perfect for renting out or living in out. If you’re in search of an exclusive property that has plenty of character, a classic home located in Malta might be the ideal choice.
What are the advantages from Buying Property in Malta?
Malta is an extremely stable and lucrative property market. Making investments in properties in Malta has proved to be profitable with a stable market.
Below are a few of the advantages of purchasing an investment home in Malta:
Reliable Return on Investment
No Wealth Tax or Ownership Taxes;
Simple Final Withholding Tax ranging from 5% to 8% for Sale (No additional capital gains tax);
5percent Stamp Duty;
Flat 15 Tax of 5% on Rental Income Tax on Rental Income of 15%
Tax-free transfer of Immovable property.
Rental income earned in Malta could be taxed at the flat percentage of 15% of the rental income.
What are the requirements to Purchase an Immovable Property In Malta?
In order to increase the flexibility of the real estate market and to encourage investment, authorities in Maltese government has enacted a variety of policies that have brought the market to greater levels.
purchasing a property to purchase a property in Malta in the capacity of an EU Resident of the EU
Let’s say you’re an EU citizen and have lived all the time on the island for at minimum five years. In this situation, you don’t have in order to obtain an Acquisition of Immovable Property (AIP) Permit to purchase immovable property as your main home or for business purposes.
EU citizens who haven’t been residing for more than five years in Malta consistently for at minimum five years must obtain an AIP permit to buy an immovable property for a second residence.
Purchase a property on Malta as a non-EU Resident
If you are a non-EU resident Immovable property can be purchased in Malta with an AIP Permit to use as the primary residence is feasible.
A group of people (excluding the commercial partnership) which is established and operating in the EU can freely acquire real property in the land that is needed to fulfill the reason the group was established, so long as the people who benefit from it are EU citizens.
For commercial partnerships which are operating within one of the EU membre state, an immovable asset could be acquired in exchange to establish the commercial partnership. EU citizens are required to own at least 75% of the share capital.
In any other circumstance permits is granted only for a tourist or industrial project or to contribute to the growth of Maltese economy.
Special Designated Zones in Malta
Specially designated areas are those that do not have any limitations on the purchase of property. The most expensive areas are:
Portomaso Development, St. Julian’s, Malta
Portomaso Extension I, St. Julian’s, Malta
Cottonera Development, Cottonera, Malta
Manoel Island / Tigne Point, Tigne/ Gzira, Malta
Tas-Sellum Residence, Mellieha, Malta
Southridge, Mellieha, Malta.
Madliena Village Complex, Malta
Smart City, Malta
Fort Cambridge Zone, Tigne, Malta
Ta’ Monita Residence, Marsascala, Malta
Pender Place and Mercury House Site, Paceville, Malta
Metropolis Plaza, Gzira, Malta
Quad Business Towers, Mriehel, Malta
Pender Place and Mercury House Site Extensions I II III, IV, and V Paceville, Malta
Fort Chambray, Ghajnsielem, Gozo
Kempinski Residences, San Lawrenz, Gozo
Vista Point, Marsalforn, Gozo
Mistra Heights
Malta Property Transfer Tax System
One of the major reasons that attract foreigners to move in Malta is the favorable tax rates. The tax rates are applicable into the sale of the property by the purchaser at the time of transfer.
The tax rules that determine the final amount apply to the transfer of Immovable property in Malta in accordance with section 5A under the Income Tax Act. In default, a rate of 8% withholding tax is set for the transfer from Immovable Property in Malta.
The final rate of tax is 12%. It is imposed for the gap between transfer value and the cost of the transfer of immovable property or 7% tax on the amount of consideration when the property was inherited prior to date of the 25th Nov. 1992.
In the case of the transfer of immovable property that was acquired by donations, 12% tax on the profit earned is applicable if the transfer is completed more than five years from the date of the donation.
What transactions are exempt of Property Transfer Tax?
Some transactions can be exempted from paying the transfer tax. This includes:
Individuals make donations to family members of a particular member or to philanthropic institutions.
The transfer of property been owned and resided in by the transferee the property was the residence of the individual during three years after the date of the transfer.
Transfer of property between spouses as a result of an agreement to separate or judicial or divorce.
Transfer of property was an element of the acquisitions between spouses or owned jointly.
Transfer properties from one firm to another when the businesses have the necessary requirements for the transfer, like being an entity that is part of the same.
Transfer of property from an entity to its shareholder during the process of liquidation of or distribution of assets subject to certain conditions being met.
What is the rate of Duty on Stamps in Malta?
The stamp duty rate, that is due to the purchaser upon the purchase of a property that is immovable in Malta is determined at 5 percent of the value of the property.
If the person is buying his first property, the lower rate of 3.5 percent on the initial EUR150,000 will be used. The requirement to qualify for the reduced rate is that the buyer has to plan to use the property as the principal residence.
The lower stamp duty at 3.5 percent, is only available to those who are not required to get the AIP permit.
Following changes in the Maltese tax law, which stipulates that the purchaser does not possess any other immovable property in the globe, the initial worth of the property, which is EUR150,000, can be exempted from the stamp duty.
One of the major highlights of the Malta Budget 2022 is that the stamp duty exemption exemption for first-time buyers exempt from paying stamp duty for the first EUR200,000 in the amount of the property’s value is being extended.
The purchase of homes located in Gozo or Urban Conservation Areas is also subject to a cut in stamp duty, ranging from 5 to 2 percent.
In relation to the payment for tax on stamps in Malta 1 percent is payable on signing the agreement to sell agreement, while the balance of the amount is due upon the deed or purchase.
Non-EU citizens are required to pay 5% tax on stamps and the amount stated in the deed’s final declaration.
What are the steps to Buy Immovable Property within Malta?
If the person decides to purchase the type of property they wish to purchase the seller and buyer are required to sign an agreement written in writing, often known as convenium (preliminary agreement). A copy of the agreement is required to be filed alongside the AIP Application Form.
PropertyMarket.com.mt
CEBI, Level 3, Dar Ġuzeppi Zahra, University of Malta, L-Imsida MSD 2080, Malta
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