property purchase by Maltese citizens

Once you have selected a property and the price has been agreed, you will sign a ‘convenium’, which is the preliminary agreement between vendor and purchaser prepared by a Notary (employed by the purchaser).

This agreement, binds both parties to the terms and conditions agreed upon. A sum equivalent to 10% of the purchase price is lodged with the Notary or estate agent. This deposit will be forfeited to the vendor if you fail to complete the purchase for no valid legal reason. 1% of the stamp duty is also payable to the Government at this stage.

Stamp Duty applies as follows:

• For your ordinary place of residence, 3.5% on the first Lm30,000 and 5% thereafter
• For any other property, 5% on the total value

The signing of the final deed is subject to the proof of clear title from the vendor and the obtaining of any relevant permits for the purchase.

Please note that the Notary is not responsible for carrying out searches relating to local planning issues. You will need to appoint a local professional to ensure that conversions etc to the property itself have the relevant permits, and that planning issues connected with the surrounding properties are fully explored.

Before signing the convenium, you should also check the following points carefully:

• Is the property freehold or is there a ground rent?
• What fixtures and fittings and other items are included in the price?
• Are there any completion works agreed with the vendor as part of the price?

The period between the preliminary agreement and the final purchase is normally agreed between the parties, but in law is valid for three months.

On the signing of the final agreement, all the terms and conditions laid down in the convenium binding on both the purchaser and the vendor must have been completed or adhered to. The Notary will have ensured that there are no restrictions on the property that may affect the purchase.

At the signing:

• The balance due for the purchase is paid to the vendor. (If you have taken a mortgage on the property, the final agreement will be signed at the bank with all parties present)
• The purchaser will also pay the balance of the Stamp Duty, and Notary fees (Approx 1%, but depending on value of the property can be negotiated. Other fees include around Lm100 for searches and registration and Lm100 to the Ministry of Finance)
• The vendor will pay any outstanding amounts for which the property is held as security (bank loans, mortgages etc), any Capital Gains Tax and agent’s fee.
• It is not unusual for there to be a number of people at the signing of agreements, as property can be left divided between a number of relatives, all of whom have a share in it

Once these formalities have been completed and the final agreement signed, the property is yours to enjoy!