The procedures for buying property in Malta are as follows:
- Once a suitable property has been found and an offer accepted, a preliminary agreement is signed, which commits both the buyer and vendor to complete the purchase under the agreed terms and conditions, provided good title is proved and a purchase permit obtained, if necessary.
- The buyer appoints a Notary Public to act on their behalf, and lodges a deposit of 10% of the purchase price with the Notary Public or estate agent. The deposit will be forfeited and paid to the vendor if the buyer fails to complete the purchase for no valid reason.
- During the validity period of the preliminary agreement (usually three months) the Notary Public carries out the title searches and submits to the Ministry of Finance the application for a purchase permit, if this is required.
- When the searches are complete and the permit obtained, the deed of sale is drawn up by the Notary. On signing the contract the balance of the purchase price, plus stamp duty and legal expenses are paid, and vacant possession is handed over.
Expenses related to the acquisition of property include:
- 5% stamp duty,
- 1% to 3% notarial fee (apx.),
- €600 searches and registration fees (aprx.)
- €233 AIP permit fee (where applicable).
These costs are the liability of the purchaser, whilst agency fees are borne by the vendor.
Bank Loans In Malta
Loans to purchase or finish a property may be obtained from all local Banks. HSBC Bank Malta plc., Bank of Valletta plc., APS Bank Ltd and Banif Bank offer attractive Home Loan facilities to suit individual borrowers’ needs.
Home Loan facilities are being offered under the following terms:
- Up to 90% of purchase price or completion costs
- Preferential interest rates especially for the first years and for high value loans
- Monthly repayments up to 30% of the gross income
- Flexible loan repayment terms of up to 40 years
The Banks normally require the following basic documentation to enable them to process the loan smoothly and efficiently:
- Recent pay slip and FS3
- Architect’s/Manager’s estimate of the property value
- Character reference unless customer is already an account holder
- Photocopy of ID card
- Copy of the preliminary agreement
All Banks also offer Bridging Loan facilities and loans to purchase summer residences.