As with most property purchases, once a property has been selected, a preliminary agreement is signed between the vendor and the buyer. This agreement binds the two parties into purchasing/selling the property under the terms and conditions agreed - though the signing of the final deed is always subject to good title being proved and the issuing of the relative permits. All agreements and contracts are written in English.
Once the initial contract has been signed, a 10% deposit is made on the property. The agreement is valid for three months by law, though this can be lengthened if mutually agreed by both parties. During the period between signing the preliminary and the final deed of sale, a Notary Public will be engaged by the purchaser. The notary will carry out all necessary research into the property, to confirm good title, and will also submit any required applications to the relevant Government departments.
Once all permits have been issued, and researches have proved clear title to the property, a final contract of sale may be entered into. This is drawn up by the notary. Upon signing, the final value of the purchase price is paid to the notary, in addition to the property value, the following fees will be paid:
- Duty on documents - 5%
- Notarial Fees - 1% (approximately)
- Searches of Registry - Lm100 (approximately)
- Ministry of Finance Fee - Lm100
These fees are the liability of the purchaser; any brokerage fees due to the estate agent are the responsibility of the seller.
One of the notaries' roles during the property transfer is making an application to the Maltese Ministry of Finance to allow a foreign national to acquire property in Malta. Permission is usually granted in three months, subject to the following criteria being fulfilled:
- The property value is greater than Lm30,000 in the case of an apartment, and Lm50,000 in the case of a villa. However, property in a shell form requiring renovation may be granted, provided that the estimated cost of the renovation exceeds the threshold for that type of property.
- Documentary evidence must be provided, showing that the funds for the acquisition have originated from an external source.
- The property purchased must be used as a residence by the purchaser, or their immediate family, though in some cases it may be let to third parties.
- The property must be sold on to a resident of Malta (though this condition may be waived if efforts to sell to a Maltese National fail).
- The buyer may only own one property in Malta and Gozo. Any further property purchases must be approved by the Ministry of Finance.
Permission to purchase certain houses of historical importance may be denied, though this doesn't apply to farmhouses or Houses of Characters which appear on the open market.