The process to buying property in Malta is straightforward and secure. The parties involved in this process are the purchaser, the vendor, the property consultant, the architect, the bank, the lawyer and the notary. As soon as a buyer identifies a desirable property for purchase, negotiations are finalised and price and conditions have been agreed upon, the formal process may start.
Generally, the whole process of buying property in Malta is split in five phases:
- Stage 1: Property Identification
- Stage 2: Negotiation
- Stage 3: Promise of Sale / Preliminary Agreement (POS)
- Stage 4: Searches Vetting and Condition Fulfilment
- Stage 5: Final Deed Execution.
Worthy of mention is the fact that in Malta, English is an official language, so any contracts may be drafted in the English language.
1. Buying Property in Malta – Identification
Identifying the best property for every individual is an art that is based on knowledge, intuition, and in-depth knowledge of the client’s needs.
Malta is a unique location that fuses together a temperate climate, agreeable lifestyle, security, strategic global and regional positioning, high levels of education and breath-taking locales that act as sustenance to many an inquisitive and adventurous mind.
Geographically speaking Malta consists of three main islands, namely the main island (Malta); the second-largest sister island (Gozo) and the smallest island (Comino).
Comino, with its crystal-clear waters and remote locations, is the smallest and a genuinely magnificent miniature paradise in Mediterranean waters. It is the most pristine and natural of all the islands in the Maltese archipelago.
Gozo, the second largest island, provides its tenants and visitors with an ideal destination for a retirement abode. Being just a short ferry trip away, Gozo is close enough to enjoy the more urban and cosmopolitan benefits of its sister island, Malta, yet still tucked away from the hectic lifestyle of any European city. Gozo is home to the most breath-taking villas, farmhouses and large bungalows that speckle the island, yet it still enjoys a peaceful atmosphere and a considerably, slower tempo in terms of lifestyle.
Malta, the largest island of all, is, in fact, the smallest state of the EU. Abundant in history and highly rich in culture, Malta once drew Phoenicians, Greeks, Romans, Arabs, Normans, Crusaders, the French and the British to its shores. Nowadays, people from all over the globe find Malta an appealing spot to live in, keep their personal residence and incorporate their businesses.
When it comes to identifying the best property for an individual’s need, Arcus is well positioned to handhold the client from beginning of his search to the identification and execution stage of the whole process. With our assistance, buying property in Malta at the most advantageous price, turns into a positive process founded on concerted efforts, good timing, and a keen eye for good investments. As buyer-centric advisors, we do not merely act as finders in the process but we organise, negotiate, mediate, and advise the client by matching his needs and lifestyle to the most appropriate solutions available at the time.
2. Buying Property in Malta – Negotiation
Before the signature of the POS, several terms have to be agreed upon, namely:
- Property price
- Payment terms
- Agreement length
- Ground rent, if applicable
- Furniture to be included in the price
- Any contract of works to be carried out by the seller, and
- Terms of payment.
During this stage, the role of the property consultant is vital. Arcus will be the link between the seller and the buyer, we will assist in negotiating the terms of the agreement of sale and make sure that it is acceptable to both parties. Our role is to act as intermediaries between all stakeholders to ensure that the process runs smoothly.
3. Buying Property in Malta - Promise of Sale
When buying property in Malta, the first step is the execution of a POS.
The POS is an agreement between the prospective vendor and a prospective purchaser, binding them both to purchase/sell the immovable property, subject to the above pre-agreed terms and conditions being fulfilled. For a preliminary agreement to be binding, it must be in writing and properly registered, within 21 days from date of signature, by the Notary with the Inland Revenue Department (IRD) and a provisional duty amounting to 1% of the purchase price needs to be paid.
The promise of sale agreement should hold the following information:
- Date of agreement
- Details of the Parties
- Description of Property
- Title under which the property is being transferred
- Terms agreed above.
Upon execution of the POS, practise dictates that a 10% of the property purchase price deposit is paid by the buyer. Such deposit would be lodged by the buyer with the notary public, who is the officer in charge of the execution of this process. This deposit would be forfeited in favour of the seller should the buyer not complete the final deed of transfer for no valid reason at law.
A POS is typically valid for a statutory three months or for such time as mutually agreed by both parties.
4. Buying Property in Malta - Searches / Conditions
When buying property in Malta, throughout this 3-month (or pre-agreed) POS period, the Notary Public must carry out certain procedures. The notary would:
- carry out the required searches into the property root of title to confirm that such title is proper and valid at law;
- apply for an Acquisition of Immovable Property Permit (AIP), if required;
- liaise with any financial institution / bank, if a loan is being requested, in order to confirm with the bank that all is in order in title and conditions;
- ensure that an architect inspects the property, if this is a condition in the POS;
- carry out any procedure that is necessary for the fulfilment of the POS conditions or inform the buyer if there is an impediment for the fulfilment of same.
5. Buying Property in Malta - Final Deed
The execution of the final deed is subject to clear title and the issue of any applicable permits for purchase, if required. In this last step of buying property in Malta, once all the requirements of the Preliminary Sale contract are complete and all duties carried out, the seller and the buyer come together for execution of the final deed. The Notary Public, as a public official, drafts the final agreement and prepares all documents for signature. The following steps are usually carried out:
- Final Agreement Execution - The deed is read out and upon agreement and fulfilment by the parties of all terms and conditions, signature is carried out;
- Final Agreement Signature – this usually takes place at the lawyer/notary office or at the bank if a loan/mortgage is required;
- Payment of Balance Price – the pending price balance (purchase price less any deposit) is usually paid during this same time when signature takes place, however, if the parties agree, a specific time can be stipulated for the transfer of the balance price;
- Finalization of all Forms – forms such as water and electricity meter (ARMS) forms need to be finalised and executed;
- Keys Exchange – keys to the property are exchanged between the parties;
- Contract Registration - the contract of loan and purchase is then registered by the Notary, who then registers the deed, with any applicable hypothecs and privileges with the Public Registry and Land Registry.
Arcus assists its clients in all this process. It is also our role to plug in any other expert required for a smooth transaction to take place. Investing in a property or finding a home is much more than a tick-the-box process and it is our role to enlighten our clients on all the forks and side-turns along the path as well as supporting them from beginning to the end of such life-changing quest.