In Malta, the buying procedure is relatively safe, easy and straight forward. Once you find the perfect property and you have agreed on a price with the vendor, you need to engage a notary (commissioner of oaths) to draw up the preliminary agreement, often called a convenium (“konvenju”) or a promise of sale. The singing of this agreement binds you to purchase and the vendor to sell the property , to you at that price with the conditions and time frame stipulated in the agreement. Upon signing, you normally pay a 10% deposit which is either passed on directly to the vendor or kept with the notary until the researches and clear title is proved. While your notary is doing the necessary title and credit checks, the notary will be checking your status. If you are from overseas and the property will not be your main residence, or is outside a Special Designated Area, he or she will apply for permission from the Ministry of Finance. This application is called an AIP (Acquisition of Immovable Property Permit).
Together with the signing of the preliminary agreement, you would also need to pay 1% (out of the 5%) stamp duty , to register this agreement with the relative authorities.
When all permissions and checks are in place you sign the final contract and pay the balance of the asking price - along with all the remaining taxes and fees. This whole process usually takes between 2 to 6 months.
The factors mentioned in a “konvenju”
- The agreed price at which the property will be transferred.
- Ground Rents - Some properties may have a ground rent while others may be freeholf (for more advice on these feel free to contact our team)Freehold (no Ground Rent).
- Any fittings or furniture remaining in the property – these may be given a value on which no stamp duty will need to be paid.
- Financing – We always advise to make sure you can get financing before entering into an agreement, although you can add this condition in the agreement.
- Snag list – if there is a list of items the vendor needs to arrange or finish before contract.
- Conditions (You may only wish to purchase subject that a specific permit is granted – Eg. Only if you get permission to install a swimming pool, etc)?
- Timeframe - When will the final contract be signed? A promise of sale agreement must have an expiry date.
Deposits are only forfeited in favour of the vendor if the purchaser does not appear on the final deed without a valid reason at law.
The total expense Buyers should budget for, over and above the purchase price is around 5.5 to 6.5% per cent for taxes (stamp duty) , notary/legal fees and other charges. When purchasing a property through Pierre Faure Real Estate, commission is only charged to the vendor and is always included in the prices quoted.