Procedures when buying property in Malta

For those foreigners who are thinking of buying a property in Malta, there are several benefits under the Residents’ Scheme Regulations which they can benefit from. Applicants must have an annual income of at least Lm10, 000, or must own capital worldwide exceeding Lm150, 000 (or equivalent). They must also be able to remit to Malta Lm6, 000 annually, increased by Lm1, 000 for each dependant included in the application. Buying property in Malta as an investment would allow buyers certain benefits such as:

• Foreigners can pay an income tax flat rate of 15% with a minimum tax liability.
• No tax on capital gains arising out of and forwarded to Malta.
• No age restrictions.
• Relief of double taxation by virtue of Malta’s treaty network or through unilateral provisions.
• No duty on importing household goods or furniture.
• Free repatriation of funds.
• No inheritance tax but duty of 5 % is payable on the transfer or transmission of immovable property.
• Reduced registration on importing a motor vehicle, subject to certain conditions.

While anyone in the world can buy property in Malta, there are certain restrictions regarding location and the number of properties that may be bought. The Acquisition of Immovable Property (AIP) permit is normally required for the purchase of property by non-EU citizens. For EU citizens only, if the property is to be the buyer’s main and permanent residence – not a holiday home – the AIP is waived.

The administrative cost of an AIP is €233. Holders of a residence permit may purchase or lease property in Malta. The minimum value in the case of an apartment is Lm30, 000 whereas in the case of a house it is Lm50, 000. Should they wish to rent property in Malta instead, the minimum annual rent payable is Lm1, 800. Foreigners may purchase up to one property in Malta, even if they do not hold a permanent residence permit, however if the purchase of property is termed as being in a ‘Special Designated Area’ (Pendergardens is an SDA Development) this does not typically require an AIP. Furthermore, more than one property may be purchased. Buying immovable property in Malta has always been considered to be an excellent investment.