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What Are the Expenses Involved When Selling your First Property

21st March, 2022
young couple checking their family budget

The excitement of becoming a property owner for the first time often means that we did not pay too much attention to all the costs that were involved…we just wanted that home in our name!  

With all the discounts that are currently available to First-Time Buyers, it is very likely that you have saved yourself a bundle when you bought your first home. Many new property owners have already benefitted from and utilised the unbelievable discount packages made available by Frank Salt Real Estate, combining it with those available from the Government for really BIG savings. 

So, it is no wonder that many new owners were not too concerned with costs related to buying their first property…after all, it was the seller that paid for most of the costs then. However, now that you are ready to move on and upgrade to another home, the hard-hitting facts of all the costs involved are staring you in the face… and we break down the most likely costs that you as a seller will be facing: 

The EPC Certificate

This certificate reflects the energy rating of your home, its carbon emissions and will be asked for by the bank if a buyer is applying for a loan in order to purchase your property. You do not have to necessarily do this yourself as many companies offer the service of acquiring this certificate on your behalf. The cost is approximately €300 in total for this certificate.  

Estate Agency Fees

A fee or what is called commission of around 5% of the sales price is charged in Malta by most estate agents, although this may be negotiated to a lesser amount in the case of very expensive properties or special circumstances, depending on the agreement you have signed with the estate agency. VAT of 18% applies to this amount as well, an important factor not to overlook.  

The Notary’s Fees

This will in most cases be borne by the buyer unless you as the seller appoint a notary yourself. Notary fees are fixed according to the law, but it all depends on what the notary has to do according to your instructions. 

manager man checking finance working

Tax Clearance

Our best advice is to ask your notary about this, but you may end up having to pay no charge. In the case of foreign nationals selling a property, a tax clearance certificate will be required and in order to get this issued, all your taxes need to be up to date. 

Final Withholding Tax

As a property owner you will not have to pay final withholding tax IF you occupied and owned the property for at least three years up to the date of transfer AND on condition that the property is transferred within one year after you have vacated the property. 

In all other cases tax of 8% of the sale value will apply if a property was purchased after 1 January 2004. If you bought the property and held on to it for less than five years you will be taxed at 5% of the transfer value. Should the property be located in a UCA as classified per the Malta Planning Authority and its applying act and you can prove that you invested in its restoration with a legitimate government-issued certificate. In any UCA area is now NO TAX on the first 750K. 

Our best advice is to speak to your notary to clarify this, as there may be other exemptions that apply to the sale of your property. Final withholding tax applies to the selling price of a property, not the profit. 

Expenses related to Moving House

This is all relative to your situation and what you are going to do. If you are moving all your belongings yourself, the cost will be minimal and on the other hand, the sky is the limit if you are going to use professional movers. Make sure you get several quotes from different companies before the time arrives to move out. 

If you want more detailed information on all the costs and regulations that apply to selling a property, visit our very informative page here

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