BUYING & SELLING
Buying & Selling
Bank Loan
 
Bank of Valletta
HSBC
Lombard Bank Malta
Buying & Selling

Selling a Home

The majority of home sellers opt to list their home with a professional Real Estate Agent. They feel that it is better to entrust the sale of their biggest investment to a professional, rather than learning about selling a house by trial and error. Most people prefer to let an experienced Agent handle the complexities of modern Real Estate transactions. By incorporating legal and financial attributes, the sale of a home is much more involved than say the sale of a car.

Some of the other advantages of working with a professional Real Estate Agent include access to the multiple listing services, so that large numbers of buyers will have access to the seller's property. Your Real Estate Agent absorbs all of the cost of advertising and marketing, and the screening that will be done of potential buyers. In addition, your Agent handles the majority share of all details of negotiation.

 

Buying a Home

Understanding what is required of you and every other person involved in the home buying process will help you feel more comfortable and confident as you go on this exciting journey. You can use this step-by- step home buying guide to get started.

Step1: Getting your finances in order

Credit reports reveal how you manage your finances. You should know what your credit reports say about your financial history before you apply for a home loan so there won't be any unpleasant surprises. Credit Reports play an important role in the mortgage approval process and often determine the interest rate and other loan terms that a lender may offer you.

 
Step2: Explore the mortgage industry

Finding the right loan and the right lender is critical to your home buying success. It's up to you to choose which lender is best for your needs. It's always a good idea to have at least some background about the loan process before talking to a lender. Should you choose me to be your real estate agent, I will be delighted to help you with this process.

Step3: Get pre-Approved for a mortgage

Talk with a lender to determine how much house you can afford. Having a letter of pre-approval can significantly increase your chances of being selected as a potential buyer. A home seller who receives similar offers is much more inclined to choose the buyer who is accompanied by a letter from his/her bank that states he/she is pre-approved for a mortgage.

 
Step4: Decide your wants and your needs

Buying a house is exciting and not as difficult as you might anticipate. As there are hundredth of homes on the market at any given time, the process will go much smoother if you get familiar with your area and narrow down your wants and your needs before you start looking at homes.

Step5: Choose a professional real estate agent

Real estate agents represent buyers, sellers, or sometimes both, as they can work as neutral facilitators for either party. It's essential to understand your agent's duties and loyalties before you make that first call. 

 

Expenses connected with the acquisition of property:

  • Duty on documents 5%
  • Notaries fees 1% (approx.)
  • Searches & Registration Lm200 / €465.87 (approx.)
  • Ministry of Finance fee Lm100 (€ 232.94)

N.B. The above expenses are the liability of the purchaser.

 

* Conditions for non-Maltese citizens

 
  • Individuals who are NOT citizens of a European Member State may acquire immovable property after they obtain the relative permit in terms of Chapter 246 of the Laws of Malta from the Ministry of Finance. 
  • Citizens of all European Union member states, including Maltese citizens, who have not resided continuously in Malta for a minimum period of five years, require a permit under chapter 246 of the laws of Malta to acquire immovable property for secondary residence purposes i.e. holiday homes.
  • The relative permit will be issued usually within 6 weeks, under the following terms and conditions:
    a) The value of the property purchased must be above Lm42,519 / €99,000 in case of Apartments/Maisonettes and Lm70,845 / €165,024 in case of houses. These values are index linked and thus may be subject to revision.
    b) The property has to be used solely as a residence by the applicant and his family. This condition will be waived once the applicant obtains the relative permit to rent the property.
    c) The immovable property purchased may not be sold or otherwise converted into more than one dwelling house.
The above-mentioned individuals may only own one property in Malta and Gozo (except in special designated areas where one may purchase more than one property). Once these applicants have purchased a property in Malta and wish to acquire another one after having sold the first one, they may do so after obtaining permission from the Ministry of Finance. Applications for permission to acquire another property are normally favourably considered. Permission will be granted subject to the first property being sold.
  • Citizens of all European Union member states, who have resided in Malta continuously for a minimum period of five years at any time preceding the date of acquisition, may freely acquire more than one immovable property without the necessity of obtaining a permit.
  • EU citizens, who have NOT resided in Malta for at least five years, but have the intention of purchasing their primary residence i.e. take up residence in Malta, do not require a permit, under chapter 246. Nor do they require such a permit to purchase immovable property required for their business activities or supply of services.
 
 
 

* Acquisition by Bodies of Persons

·          A body of persons, other than a commercial partnership, established in and operating from a European Union member state may freely acquire immovable property that is required for the purpose for which it has been set up as long as it is directly controlled by citizens of a European Union member state who have resided in Malta continuously for five years.
  • A commercial partnership established in and operating from a European Union member state (therefore including Malta) may freely acquire immovable property that is required for the purpose for which it has been set up as long as such partnership is controlled by and at least 75% of its share capital is held by a person (or persons) who is a European Union member state citizen and who has resided in Malta continuously for five years.
  • Any other body of persons will require a permit, which is only granted if the property is required for an industrial or touristic project or as a contributor to the development of the economy of Malta.
     Permission may be refused for the purchasing of a property, which is considered to be of historical interest.
Renting conditions:
Owners of property may rent their property as long as letting licence is obtained from the Ministry of Tourism. Licence will be issued once the property meets first class standard requirements or consists of a villa with a pool. Properties may be rented under a long let or holiday licence.
For details of licence fees and application forms please visit Malta Tourism Authority website:
Lessors would have to register with the VAT and Income Tax Department.
Income Tax Implications
  • Income derived from the letting of immovable property can be of two types – investment income and income derived from a trading. Typically, the difference between the two is distinguished by whether the rental agreement is for short periods (usually for furnished premises for a few weeks or months) or for long periods.
  • The tax deductions taken against these two types of rental income is different. Any expense incurred in the production of income derived from trading rental income is an allowable tax deduction, given that upon demand, the taxpayer would be in a position to present to the Inland Revenue Authorities supporting documentation.
  • In the case of rental income derived from long lets where the rental activity is not a trade, the allowable deductions are (1) the MTA (formerly HCEB) licence fees if any, (2) ground rent and rents payable on property rented out, (3) any interest incurred on a loan specifically taken to finance the purchase (and perhaps the renovation) of the property from which rental income is derived, and (4) a further deduction equal to 20% of the rental income received less rents and ground rents payable and less the MTA licence fees.

Rental Income will be charged as follows:
Tax Rates for Residents:

 
“Married” Rates
First 
Lm4,500
(€ 10,482)
Nil
Next
Lm3,500
(€ 8,153)
15%
Next
Lm2,000
(€ 4,659)
25%
Remainder 
over Lm10,000
(€ 23,294)
35%
 
“Single” Rates 
First
Lm3,250
(€ 7,570)
Nil
Next
Lm2,250
(€ 5,241)
15%
Next
Lm1,250
(€ 2,912)
25%
Remainder 
over Lm6,750
(€ 15,723)
35%
 
Tax Rates for Non-Residents
(Married & Single)
First
Lm300
(€ 698.81)
Nil
Next
Lm1,000
(€ 2,329)
20%
Next
Lm2,000
(€ 4,659)
30%
Remainder
 
35%
 

Through our Letting and Property Management Department, we provide an extensive service to landlords, which include applying for the necessary letting licences, preparing the property to meet MTA standards, organize an inventory, collection of rents, payment of bills, as well as general management and maintenance of the property throughout the year. We can handle just about every crisis with minimum fuss and expense, while ensuring that you achieve the highest return for your property.  I would be delighted to be your agent and promise to negotiate the lowest price for the most perfect home for you.