Picking your new home is an exciting venture, especially in a new country. It can of course be a bit daunting and you may find yourself confused with where to begin looking, what to look for, what to avoid, how much to spend and whether you are going to rent or buy.
Information is key. Here’s some helpful information that will guide you to find the perfect home for you and your loved ones.
Renting a property in Malta
Renting property in Malta is very easy and the rates are extremely reasonable. Whether you are in Malta for a work appointment, to retire here or to take up residency, you can easily rent a property with no restrictions.
What property can I rent?
You can rent a property of any value in Malta. There is only one exception: if an EU citizen takes up residency under the ‘permanent residency (PR) scheme, then they are subject to the minimum of about €4,200 a year.
How does payment work?
You will usually be asked to pay a month’s rent equivalent, with the lessor as a deposit against any damages or outstanding bills. Your deposit will be refunded after your lease is up.
What additional costs are there?
If you rent through an estate agent, both the landlord and the tenant usually pay 50 per cent of one month’s rent, plus VAT, as a fee.
How much does it cost to rent?
Prices vary depending on location, the type of property you are looking at, the quality of furnishings, whether the property is furnished or not and the length of stay. More often than not, furnished properties also include fittings and appliances, however you will also be able to find a good selection of unfurnished properties.
Over and above monthly rents, you will need to pay for water, electricity, internet and TV as these are not normally included in the rental rate if it is a long term. Long term is usually defined as four months and over.
What kind of property is available for rent?
There’s a wide variety of properties you can go for and these include standard apartments, town houses and houses of character as well as seafront developments, villas and bungalows with big gardens and pools.
Buying a property in Malta
So you’ve decided to invest in owning a property in Malta? Here’s what you need to know about buying a home here.
EU or non-EU
First things first. The conditions for buying property in Malta vary depending on whether you are an EU or non-EU citizen. Other criteria include whether this is your first or secondary residence, the location and the value of the property, as well as the title by which you intend to acquire the property.
The best thing to do is to seek professional advice to see whether you are in a position to buy a property.
Prices and paper work
When buying property in Malta you may wish to negotiate a little on price. If you are going through a real estate agency, then the agent will do all the dealings for you. If, however, you are in direct contact with the seller yourself, then the negotiations will take place directly between you and the seller.
The next step after having settled your price is the paper work. You first sign a Promise of Sale Agreement, known in Malta as a ‘Konvenju’.
This Konvenju is a binding promise between the seller and the buyer in which they agree to appear on a final deed of sale and purchase. The agreement also includes a time-frame, price and conditions agreed between the buyer and seller (such as what furniture is included with the sale, for example).
Once you’ve signed this document, you cannot change your mind and decide not to appear on the final deed of sale, unless, of course, you have agreed to specific conditions in the contract. Examples of these conditions include the granting of a home loan or the sale of your current property. If one of you goes against the agreement then legal action can be taken.
Following this, your notary will complete the necessary research on the property and you will need to fulfill certain criteria too, such as making sure you have your bank loan in place.
Once all this is done, you can final sign the Final Deed and the property is now yours. You’ll be given the house keys and you can move in to your new home!
Within the 15 days from the date of the deed of transfer of property, and where the property is in a registration area, your notary will apply for the registration of the property at the Land Registry.
Can I rent out my property?
You can rent out your property as long as it abides by at least one of these three conditions:
1. It is in a special designated area*
2. It is a villa or house with a private pool
3. It is issued with a licence from the Ministry of Tourism under the ‘superior’ and ‘comfort’ category.
* Special designated areas in Malta are:
Portomaso, St Julian’s, Malta
Cottonera Development, Cottonera, Malta
Manoel Island/Tigne Point, Tigne/Gzira, Malta
Tas-Sellum Residence, Mellieha, Malta
Madliena Village Complex, Malta
Smartcity, Malta
Fort Cambridge Zone, Tignè, Malta
Ta’ Monita Residence, Marsascala, Malta
Pender Place and Mercury House Site, Malta
Metropolis Plaza, Gzira, Malta
Fort Chambray, Ghajnsielem, Gozo
Kempinski Residences, San Lawrenz, Gozo
Selling my property
There is a tax for selling property, but it has one important exemption. If you have owned the property as your primary residence for more than three years and you are selling it within 12 months from when you left the property, then you do not need to pay any tax.
Otherwise you pay tax based on the following:
If you owned your property for less than seven years you can choose between:
1. A Final Withholding Tax of 12%: this is calculated on the selling price as written on the Final Deed of Sale minus agency fees.
Or
2. Capital Gains Tax: this is treated as income and is based on the difference between the buying and selling prices, minus the cost of any improvements made on the property.
Note, that if you have owned the property for more than seven years, then you cannot choose Option B.
