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Purchasing and Renting of Immovable Property

For the purchasing or renting of a residential property in Malta, under any particular Tax Scheme one is obliged to buy or rent at the minimum amounts stipulated.  However, EU nationals who opt to take up residence in Malta without applying for no particular Tax Scheme are not obliged to spend the minimum amounts required neither for purchasing nor for renting a residential property in Malta. 


Acquisition of property in Malta is carried out through a process which involves the entering into a preliminary agreement (promise of sale), also referred to as the 'konvenju', the carrying out of title and ownership searches, applying for an AIP (Acquisition of Immovable Property by Non-Residents) permit, (where applicable) and finally the signing of the final deed of sale. Both the preliminary agreement and the final deed, also referred to as ‘the contract’ are drawn up in front of a Notary Public who is appointed by the buyer.

 

EU citizens who have either resided in Malta continuously for 5 years or EU citizens that are acquiring the property with an intention to establish their primary residence in that property do not need to apply for the AIP permit. EU and non-EU nationals who shall be acquiring immovable property within a Specially Designated Area do not need to apply for an AIP Permit.

The list of Specially Designated areas in terms of the Immovable Property Act (Cap.246) is as shown hereunder:

 

  1. Fort Chambray
  2. Portomaso Development
  3. Cottonera Development
  4. Manoel Island/Tignè Point
  5. Tas-Sellum Residence (Mellieha Project)
  6. Madliena Village Complex
  7. Smart City
  8. Fort Cambridge Zone, Tignè
  9. Ta’ Monita Residence, Marsascala
  10. Pender Place And Mercury House Site
  11. Kempinski Residences, San Lawrenz, Gozo
  12. Metropolis Plaza, Gzira
  13. Portomaso Extension I, St Julians

 

Stamp duty is payable at 3.5% on the first €150,000 and at 5% from then onwards on the acquisition of immovable property. One per cent is payable on the signing of the Preliminary Agreement whilst the remaining four per cent is payable on the signing of the final deed. Sale of property is not subject to Value Added Tax (VAT).

 

As from 1st January 2013, when a person transfers property, for one time only, by way of donation to the children, which property is intended to be used or developed by the same children as their sole residence, there shall be no stamp duty chargeable on the first €250,000 of the value of the property so transferred.