Buying property in Malta as a second home, retirement residence, or holiday accommodation is an attractive prospect, with all the advantages of the island lifestyle, a beautifully warm Mediterranean climate and stunning beaches and coastlines to enjoy.
Another benefit is the potential to apply for Maltese residency and subsequent citizenship, the only scheme of its kind that remains open to non-EU applicants in Europe – the scheme is officially called the Maltese Citizenship by Naturalisation for Exceptional Services by Direct Investment Program.
However, just as you would account for Stamp Duty and solicitor’s charges when buying your dream home in the UK, it is essential you understand all of the costs of buying a Maltese property and how this may affect your residency status.
Rules for Foreign National Property Buyers in Malta
First, we’ll look at the legalities since your right to purchase a home may depend on the area in which you would like to purchase and whether you intend to buy property as a holiday home you occasionally use, a rental investment, or a permanent residence.
Most foreign buyers who buy property in Malta opt for a home in one of several Special Designated Areas or SDAs. These developments allow foreign buyers to purchase a property without restriction, including the option of buying more than one property as an investment or rental opportunity.
Buying a home outside an SDA is more complex, although not impossible. The caveat is that you must apply for an Acquisition of Immovable Property (AIP) permit, which is a mandatory requirement for third-country nationals buying immovable property outside of one of these designated zones.
As a non-EU citizen, you cannot own more than one home outside of an SDA, must hold a valid AIP permit, and can only purchase a property for your own occupancy. It normally takes around 35 days to receive a permit, provided it is approved, with an application fee of €233 (£201).
UK expats who already live in Malta and have done so for at least five years are excluded from the AIP permit requirement, although they cannot buy more than one home, and the property must be their primary residence.
The Average Costs of Buying Property in Malta
These are several popular SDAs that offer properties specifically constructed to appeal to the expatriate market, comprising luxury developments that commonly include private parking, pools, concierge services, and other amenities.
Many foreigners buy property in these zones. You are free to lease the property when you are not in residence, and you can purchase as many properties as you wish, with many benefiting from high rates of return based on modern landscaping, convenience and prime positioning.
However, if you aspire to purchase a piece of traditional Maltese architecture, you may wish to look further afield, and budget for the time and cost of the AIP permit application process. There are historic houses and restored terraced houses throughout the Maltese islands, although the one property limit will apply. As a rough idea, we have listed below the average property prices in Malta per square metre in several of the most popular areas:
|Price Per Square Metre for a Central Property
|Price Per Square Metre for a Property Further Out
There are SDA developments in most areas, such as Portomaso in St Julian’s, Tigne Point in Sliema and Fort Chambray in Gozo.
Additional Costs Associated With Maltese Property Ownership
Alongside the cost of the property itself, you will also need to budget for notary fees, property ownership registration charges and property taxes. While the seller pays the agent’s fees in most cases, the average costs to the buyer are as follows:
- Stamp Duty charges payable on completion: 5% of the purchase price.
- Notary fees: roughly 1% to 3% of the transaction cost.
- Searches and registration fees: approximately €600 (£518).
Stamp Duty is based on 5% of the value of any immovable property purchased. You pay 1% of the tax when signing the preliminary agreement, called a Promise of Sale, and the balance when signing the final deed.
A registered notary public performs searches, verifies the details within the purchase contracts and carries out due diligence on behalf of you as their client. Most will charge based on a percentage of the value of the purchase and will perform tasks such as registering the sale with the Land Registry.
Buyers often need to budget for architect’s fees, who work as surveyors and inspect Malta real estate before confirming whether there are any structural defects you should be aware of. You will need an architect’s survey report if you wish to apply for a bank loan to proceed with a Maltese property purchase, with fees of, on average, up to €500 (£432).
The Process of Buying Property in Malta
Malta’s property market is well established, and there is no shortage of real estate agents, including those specialising in citizenship by investment applications. A reputable Maltese real estate agent can suggest properties that meet your requirements, while ensuring these are above a certain minimum value necessary to become eligible for citizenship.
British expats intending to apply for the Malta citizenship programme must buy a home worth €600,000 (£518,000) or more, or €700,000 (£604,000) or above, if they wish to become eligible for a faster-track process.
As a quick step-by-step guide, buying a property will usually mean working through these tasks:
- Selecting an experienced real estate agent.
- Choosing an architect to perform structural surveys.
- Contracting a notary public to prepare the Promise of Sale documentation and verify that the legal title deeds are in good order.
- Agreeing a purchase price and signing the Promise of Sale.
- Completing the final deed of sale, at which point all outstanding payments become due.
Provided you understand the process and have the necessary financial and real estate advice during the purchase, this tends to be relatively straightforward, ensuring you receive the keys to your second home or retirement residence in Malta without delay.
Should you require any further guidance about buying property in Malta, qualifying for citizenship by investment, or structuring your finances and assets ahead of an international move, please get in touch with Chase Buchanan Wealth Management. Our Maltese team is based in St Julian’s and can offer expert, tailored assistance at every step.
*Information correct as of January 2024