Are you considering purchasing a property in Malta (have a look at our top Malta properties) and are wondering what are the fees that come with it? Here is an overview of the fees that apply when buying a property in Malta, from notary fees, to agency costs and property taxes. Should you have more questions on buying property in Malta fees, feel free to get in touch with our Arcus Malta Team.
Notary fees Malta
When buying a property in Malta, it is essential to hire a notary public who will have a role to play in legal proceedings, investigating properties, and ensuring a sound deal between the buyer and the seller. They will also be responsible for transferring your stamp duty payment and registering the sale with the Public Registry. Notary fees are mostly about 1% to 3% of the property price and are paid in two stages, 33% when signing the preliminary agreement and the remaining 67% when the final deed is signed. The price depends on how much work the notary has to do during the buying process and it is calculated according to the Notarial Council Guidelines.
Stamp Duty Malta
Stamp duty on property transfers is to be paid at a rate of 5% of the property value. After deciding on a suitable property and agreeing upon the price and other terms with the seller, a Preliminary Agreement is done and registered with the Commissioner of Inland Revenue by the notary within 1 one day of its signing. At this point, the provisional stamp duty of 1% is paid. The remaining stamp duty of 4% is paid within 15 days after the signing of the final deed of sale.
Maltese and EU citizens who were resident in Malta for a continuous 5 years, have to pay a stamp duty 3.5% instead of 5% on the first €150,000 of the property acquisition fee.
First-Time Buyers Malta
For ‘First-Time Buyers’ in Malta, the government has an incentive in which they are exempted from stamp duty on the first €200,000 of the cost of the property. This scheme is applicable to both foreigners and Maltese nationals with a few conditions that need to be fulfilled.
Property Tax Malta
According to the Office of Commissioner for Revenue, the seller is supposed to pay capital transfer taxes on the transfer of any property located in Malta, which is based upon multiple factors including the relationship between the buyer and the seller, and whether any exemptions or incentive measures apply to the transfer at a given time. If the property in Malta being sold was first acquired after 1st January 2004, a final withholding tax of 8% should be paid. For a property acquired before January 2004, the tax rate is 10%.
Tax rate for a property transferred five years from the date of its acquisition, would be 5%. If a property is sold within three years of acquisition, final withholding tax is 2%.
However, if a property, owned for at least three years, and used as a primary residence, is sold within one year of leaving the property, capital gains taxes are not applicable.
Estate Agency Fee in Malta
An estate agency usually charges the seller. If there is no sole agency agreement and multiple agencies are representing one property, then the standard commission rate is 5% + 18% VAT, which is payable upon signing of the final deed. If you decide to sell your property with one estate agency with a sole agreement in place, then the standard commission rate is 3.5% + 18% VAT.
If you’re looking for a real estate agent in Malta, Arcus is the perfect choice. The sole purpose of Arcus estates is to connect buyers and sellers that meet each other's requirements and can come to a peaceful agreement. For further details on estate agency fees, contact us.
When buying a property in Malta, you won't find a more reliable real estate agency than Arcus estates. We will help you through the entire process and try our best to keep you in the loop with all the trends and incentives going on at the time of property transfer. Get in touch with us today to learn more about the costs of buying property in Malta.