A Comprehensive Guide to Buying a Property in Malta for UK Citizens

Many UK Residents have made Malta their home, with more than 23,000 expats already living in the country permanently. This number is predicted to grow significantly as the UK’s recent tax increases are impacting residents’ disposable incomes and investments. If you are one of the many thousands who are exploring relocation options abroad, know that Malta has established itself as a highly attractive destination for British Nationals.

The combination of Malta’s appealing Mediterranean lifestyle, English-speaking environment and favourable tax and residency schemes make it an ideal and practical choice for those seeking financial efficiency and a higher quality of life. Malta offers a warm climate, easy access to the rest of the EU and robust property investment opportunities, further adding to its popularity.

Looking at the Basic Process, Rules and the AIP Permit

For UK citizens interested in purchasing property in Malta, the process is straightforward but it involves specific conditions, especially as UK Nationals are now considered third-country nationals post Brexit. Let’s take a look:

• Prospective buyers start by selecting a property, often with the help of a local real estate agent.
• The purchasing process gets underway with the buyer signing a Promise of Sale, a preliminary contract binding both the buyer and the seller. Typically, a 10% deposit based on the full asking price is made at this stage.
• Foreign buyers from non-EU countries, like the UK, must also obtain an Acquisition of Immovable Property (AIP) permit unless you are buying in one of Malta’s Special Designated Areas (SDAs).
• Third-country Nationals can buy multiple properties in SDAs without the need for an AIP permit and rent them out immediately, making them particularly attractive for investors.
• For properties located outside SDAs, buyers with an AIP permit may only purchase one property, which cannot be rented out.
• Note that Malta has set minimum property values for AIP-permitted purchases, currently standing at €143,410 for apartments and €241,701 for villas and townhouses. Costs may vary in the South of Malta and on Gozo. Ask your notary for the latest figures that apply as these are updated on a regular basis.
• In the case where you are purchasing a shell apartment or property under the required amounts applicable, the sale will be permitted on the basis that after completely finishing it, the property needs to be valued by a registered architect for an amount exceeding that of the required minimum amount.
• UK nationals who are interested in buying additional properties outside of SDA areas need to sell any existing properties first.

Other Conditions

As mentioned previously, any person who has not been living in Malta for 5 years continuously or more needs to obtain an AIP permit when purchasing a property located outside a Special Designated Area and this also applies to Maltese who have not lived continuously in Malta for 5 years.

After 5 years, individuals with Maltese Citizenship can freely buy as many properties as they like, anywhere in the country. Those who do not have Citizenship however, have to fulfil the following criteria in order to buy a property. You have to be:

• An EU Citizen that has been resident for more than 5 years.
• A non-EU resident who has lived in Malta for more than 5 years.
• An EU Citizen who purchases a property as their primary residence.
• An EU Citizen who purchases a property for investment purposes.
• In the case where one of the spouses is an EU Citizen and the other not, both people can benefit from the examples mentioned above as long as the property is intended to be their main residence.
• If a property is to be used for business activity or to be rented out, this needs to be reflected in the Contract of Purchase.

What Happens after Signing The Promise of Sale?

After choosing a property and signing a Promise of Sale, keep in mind that:

• the Promise of Sale will be valid for three months or as agreed upon by both parties involved.
• The 10% deposit from the buyer is usually paid to the estate agent or a notary.
• It will then be the responsibility of the notary, right up to the time of signing the final Deed of Sale, to do the necessary due diligence checks to confirm that everything is in order regarding the property and all parties involved.
• The Notary will also apply for all permits such as the AIP (Acquisition of Immovable Property)if needed.
• If anything from the purchaser’s side causes cancellation of the sale, the 10% deposit will be favoured to the vendor.
• All contracts are done in English with some of the terminology or phrases in Latin, so if you do not understand the meaning of any these, make sure to ask your notary to explain this to you clearly as you will have to sign at some stage that you have understood everything as stated in the particular contract.

What Happens Next?

When all the necessary permits have been approved and the title or ownership of the property is unquestionable, you will be asked to attend the signing of the Final Contract or Final Deed of Sale.

What Happens Upon Signing the Final Contract or Deed of Sale?

Once a date has been agreed upon that suits all the parties involved, it is time to sign the Final Contract. At this time you will be expected to pay the balance of the purchase price, the stamp duty and all other sundries. After this is all done and the property has been registered in your name, you become the rightful owner.

What are the General Costs That I can Expect to Pay?

When you are looking at purchasing a property, know that in addition to the agreed upon purchase price, you will also have to take into account paying the following:

• Stamp Duty of 5%
• A 1-3% notarial fee (estimate)
• €600 for searches and registration fees
• €233 for an AIP Permit (where needed)

If you make use of the services of a real estate agency in Malta to find and buy your property through, the real estate agent’s commission fees are paid by the vendor.

What Happens if a Property is Purchased by an Entity Other that an Individual? 

When a property is purchased by an entity other than an individual – such as a company, trust, or partnership – the process, responsibilities and legal implications differ significantly from a standard personal property purchase. These types of purchases are often made for commercial, investment, or asset protection purposes and they involve unique considerations regarding ownership structure, taxation and legal compliance. Entities like companies and trusts bring additional layers of complexity, as they must adhere to specific regulatory requirements, such as disclosing beneficial owners, adhering to corporate governance and managing liability. Understanding these distinctions is crucial for anyone involved in entity-based property transactions, as it impacts everything from financing options to tax obligations and ongoing property management. Let’s take a look in brief:

• Buying a Property in Malta as a Group other than a Commercial Partnership

A body of persons may freely acquire a property as long as it is required for the purpose it has been set up and as long as it is controlled by members or citizens of another EU Member State who have resided in Malta for 5 continuous years or more.

• Buying a Property as a Group as a Commercial Partnership

The commercial partnership needs to be established and operating from an EU Member State (incl. Malta) for the purpose it has been set up if 75% of the share capital is held by a person/s who is/are an EU Member Citizen/s and who also has resided in Malta for more than 5 continuous years. Any other body of persons will require a permit.

A permit will only be granted in the latter case if the property is to be used as an industrial or tourism project or as a contributor to the development of the economy of Malta. Purchasing properties of historical interest may be refused.

Being in Possession of a Valid Energy Compliance Certificate is a Must

As a buyer, it is very important that you to get handed the latest Energy Compliance Certificate of the property on the date of entering the Final Contract. Until you have obtained this important document, the sale cannot proceed any further.

Our Best Advice is to Always Appoint a Frank Salt Real Estate Agent

Purchasing a property in Malta is an exciting and rewarding experience but it can be challenging if you are unfamiliar with the requirements and processes involved. Make the entire experience of becoming an owner a hassle-free one and contact us Frank Salt Real Estate. We have been assisting UK buyers and sellers for more than 55 years and as the country’s biggest real estate group, there is no-one else better qualified to be your property partner. Finally, during the whole process of purchasing a property, it is most important to always communicate clearly with your agent and notary regarding conditions, processes and the progress of the entire transaction.