Malta is not only one of the world’s most popular travel destinations, but also boasts an attractive real estate market. This is due to a number of factors, such as the country’s economic stability, the fact that it’s backed by a rich culture and history, as well as it’s incomparably favourable climate and bevy of beautiful natural attractions.
On top of that, living in Malta is very inexpensive, especially when you compare it to other Western countries within Europe. So if you’re considering a permanent move to Malta or are thinking of investing in property there, you’re in luck. The country is currently experiencing a real estate boom and it’s becoming increasingly easy to find properties that have attractive modern features, specs and amenities. Read on to find out more about the real estate market in Malta and how it affects you as a buyer, whether local or international.
The Maltese Real Estate Market at a Glance
Aside from the favourable economic and environmental climate, there are other factors that influence the growth of the Maltese property market, such as their low interest rates, the ever-increasing rate of foreign workers and expats currently living in Malta, as well as the increase in disposable income.
According to figures released by the Central Bank of Malta in the year 2016, prices for Maltese property increased by 13.8% during that year, whereas an additional 7.24% increase also occurred during the final quarter of 2016. This is largely due to the fact that the Maltese economy is one of the fastest growing in Europe, and saw an upsurge of 7.9% during the 2014/ 2015 financial year alone.
Property price increases were experienced by property owners and buyers across the board, as the cost of a standard apartment grew by 15.86% in the final quarter of 2016, while terrace house prices grew by 13.33% during the same time period. On the other hand, maisonettes saw a 20.24% price hike and townhouses, villas and farm houses had a growth rate of 1.96%.
Buyers: EU citizens VS Non-EU Citizens
EU citizens are only allowed to purchase one Maltese property and it must be a private residence and non-commercial property. On the other hand, non-EU citizens who wish to purchase property in Malta must first obtain an Acquisition of Immovable Property Permit which is available from the Ministry of Finance for 69, 900 Euro if you’re looking to buy an apartment, or 116, 500 Euro if you’re purchasing another type of residence. Just be warned though, that you’ll have to wait for about three months until you actually get the permit from the time you apply for it.
That said, there are certain areas in which you can purchase more than one property as a non-EU resident or foreign buyer, such as Chambray, Manoel Island, Cottoenra, Portomaso and Tigne Point. Just keep in mind that as a foreign home owner in Malta, you can only rent out a property if it has a value of more than 233, 000 Euro, is registered with the Hotel and Catering Establishments Board and has a swimming pool. Even then, you’ll only be able to offer short-term lease agreements to your tenants.
The good news is that stamp duty prices have been reduced from 5% to 2% for first time property buyers, especially when it comes to residential properties, but this exemption is only available until the end of 2018. Another condition to this exemption is that the promise of sale agreement needs to have been registered under the Inland Revenue Department by 2017 year-end, so if you missed out on that opportunity, then tough luck.
Also, if your property is situated within an area that is specified as an Urban Conservation Area, then you are eligible for a government subsidy to the tune of 100, 000 Euro which is meant to cover any expenses that you may have incurred from restoring the property.
Extra costs and fees
Apart from the amount that you have to pay for the permit, you also have to pay for additional costs like 0.40% of the property’s value in the form of a notary fee, a stamp duty that costs 5% of the property’s value, your real estate agent’s fee as well as a registration fee that will set you back by about 9 Euro to 47 Euro. Those purchasing inherited property are liable to pay an additional tax amount of 7%, on condition that the property is transferred through a judicial sale auction.
As a foreign investor in Maltese property, it’s important that you understand the term Konvenju. This term refers to the time period that transpires from the moment you sign the preliminary agreement to purchase the property, to the instant you sign the actual final deed that denotes ownership of the property. The Konvenju usually lasts for about three months, but in some cases can be different depending on the particular terms of your agreement, and one has to pay an additional fee for the Konvenju as it has to be written by a notary public.
Judging from the current real estate situation, the Maltese property bubble is unlikely to burst any time soon, thanks to the diversity of the country’s economy, as well as the different lifestyle options it offer, its favourable location and climate conditions and its different language options too.
It also helps that the country is currently attracting a truly wide range of buyers from first timers, to direct foreign investors, those purchasing property for their progeny, commercial property investors and a lot of buy-to-let investments as well.
If you’re interested in purchasing a property in Malta, there’s no better place than the https://www.maltasothebysrealty.com/ website to find the best selection of property options to choose from, including apartments, farm houses, villas, bungalows, commercial properties and more.
Founder Dinis Guarda
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