The Legal Aspects of Buying or Selling Property in Malta: What You Should Know
Buying or selling property in Malta will involve several legal implications. Whether you're a local resident or a foreign investor, understanding the legal aspects of the Maltese real estate market is essential to ensuring a smooth and successful transaction. In this blog, we will explore the key legal factors to take note of when buying or selling a property in Malta.
Engaging a Notary Public
One of the most important legal requirements when buying or selling a property in Malta is the involvement of a Notary Public. A Notary Public is a qualified legal professional responsible for overseeing and certifying property transfers. Their role includes conducting due diligence, verifying property titles, preparing contracts and ensuring that all legal requirements are complied with. Make sure that you engage a reputable and experienced Notary Public to safeguard your interests throughout the transaction process.
For more information on notaries, you can visit Notaries of Malta
Promise of Sale
In Malta, a preliminary agreement - otherwise known as the Promise of Sale, is signed between the buyer and the seller. This agreement outlines the terms and conditions of the property sale, the purchase price, payment terms and any special conditions. Once signed, a deposit (usually 10% of the purchase price) is paid by the buyer to secure the property. The Promise of Sale is legally binding and breaching its terms can result in penalties for the defaulting party.
Searches and Due Diligence
Before finalising the purchase of a property in Malta, it is crucial to carry out thorough searches and due diligence. This process involves verifying the legal status of the property, making sure that there are no outstanding debts or encumbrances and confirming that all necessary permits and licenses are in place. The Notary Public plays a crucial role in conducting these checks and ensuring that the property is free from any legal complications that could affect the transaction.
Acquisition of Immovable Property (AIP) Permit for Foreign Buyers
If you are a non-Maltese citizen looking to buy property in Malta, you will need to obtain an Acquisition of Immovable Property (AIP) permit from the Ministry of Finance. This permit is required for certain property types such as second homes, or properties not intended for immediate use. The AIP permit application involves submitting specific documentation, including details about the property and the intended use. It is important to engage a legal professional familiar with the process to ensure a smooth application.
Tax Considerations
Buying or selling a property in Malta has tax implications that need to be taken into consideration. Stamp duty is payable by the buyer and is calculated based on the property's value. Additionally, Capital Gains Tax may apply if you sell the property within a specified period. It is advisable to consult a tax expert or accountant to understand the applicable taxes and ensure compliance with Malta's tax laws.
Final Deed of Sale
The final step in the transaction process in Malta is the signing of the Final Deed of Sale. This legally binding document transfers ownership from the seller to the buyer. The Final Deed of Sale is signed in the presence of the Notary Public, ensuring that all legal requirements are met - including payment of the remaining balance and settlement of any outstanding fees or taxes.
Navigating the legal aspects of buying or selling property in Malta requires careful attention to detail and professional guidance. Engaging a reputable Notary Public, conducting thorough due diligence, understanding tax obligations and complying with legal requirements is essential for a successful property transaction in Malta. By being well-informed and seeking the assistance of experienced professionals, you can navigate the legal intricacies with confidence and ensure a smooth and secure real estate experience in Malta.
If you are looking to buy or sell a property in Malta, our dedicated team of Property Sales Specialists will help you out. Visit: www.zh.mt for more info or speak to us on our socials (Zanzi Homes) to list your property today.