Selling procedures are extremely simple and safe. Once you have found a buyer for your property and sale price, terms and conditions have been agreed upon, you sign a Promise of Sale Agreement with the buyer. This agreement, which is drawn up by the Notary, binds both parties until the signing of the final deed of sale. On signing the Preliminary Agreement a 10% deposit, on account of the price, is normally lodged with the Notary or the Estate Agent by the buyers. This deposit will be forfeited in your favour should the buyer fail to sign the final deed for no valid reason at law.
The term of validity of the agreement is agreed between the parties, however, usually agreements are valid for three months. During this period, the Notary will register the Preliminary Agreement in terms of law, carry out searches into the title and apply for any permits if necessary.
There are no restrictions on owners to sell their property at any price. Mainly in the case of foreign nationals, the entire sale price including sale proceeds of movables may be repatriated abroad, in which case, the Notary would apply for clearance from the local tax authorities, prior to signing the final deed of sale.
Capital Gains Tax
Tax on capital gains may be charged on the sale of the immovable property.
The final tax on transfers of immovable property acquired after 1 January 2004 amounts to 8% of the transfer value. In the case of properties acquired before January 2004, the applicable rate is of 10%. The tax is payable on the date when the contract of sale is entered into.
Individuals who do not trade in immovable property and who transfer such property within 5 years from the date of acquisition will be taxed at 5% (instead of 8%) on the transfer value.
Capital gains tax is not charged when the property being transferred has been the owner’s own residence for at least 3 consecutive years immediately preceding the date of transfer and has been disposed of within 12 months of vacating the property.
Other exemptions apply in the case of property transfers between group companies, sales by court order and transfers upon separation.
Capital gains tax on the sale of the property acquired through inheritance (Causa Mortis) is charged at the rate of 12% on the difference between the transfer value and the acquisition value as declared in the deed of Causa Mortis. If the property was inherited before the 25th November 1992, the rate of tax will be equivalent to 7% of the transfer value.
In cases where Capital Gains may be due, we may with the assistance of our Tax Consultants apply to the Commissioner of Inland Revenue for a reduction in the tax due, through the submission of the relative tax return and a detailed account of all expenses incurred in the acquisition and sale of the property.
Repatriation of Sale Proceeds
Following the signing of the final deed of sale, Frank Salt Real Estate Limited, will be able to immediately repatriate the sale proceeds to vendor’s account overseas. Furthermore, through arrangements that we have with leading foreign exchange brokers and financial institutions, we shall be able to secure favourable rates of exchange prevailing at the time. Every effort will be made to expedite the transfer of funds to the vendor’s account.
All you need to know about Energy Performance Certificates
Property owners must ensure that when buildings are constructed, sold or rented out, an EPC (Energy Performance Certificate) is shown to the prospective new buyer or tenant and handed over to the buyer or new tenant on the date of entering the contract of promise of sale or rent agreement.
An EPC is a requirement of the EU Directive, namely the Energy Performance of Buildings Directive (EPBD) and Maltese Law, specifically the Energy Performance of Buildings Regulations (EPBR) of 2012 (LN376/2012).
The Energy Performance Certificates inform potential buyers about the energy performance of a building unit and gives recommendations for cost-effective improvement to a better energy efficiency class. An EPC rates the home’s performance in terms of energy and it is similar to the energy label on electrical appliances.
An EPC is carried out by an Energy Performance of Buildings (EPB) assessor who is registered with the Building Regulation Office (BRO) which is the office responsible for the implementation of the EPBD in Malta.
The EPB assessor inspects the property and assesses the building. The assessor then calculates the energy use rating of the building and issues a registered EPC. A list of registered assessors is available on: www.epc.gov.mt. The BRO charges a €75 registration fee for each certificate registration. There is no set fee for an EPC as it is up to the assessor to set the price.
An EPC is valid for 10 years from the date it is issued. The same EPC still holds if the property is placed on the market within those 10 years provided there are no substantial changes to the building which could affect its energy performance.
An EPC assesses the geometry, construction and finishing material of the building such as double/triple glazing, ventilation, insulation and shading elements. It also takes into account lighting, hot water systems, air-conditioning and renewable energy systems like, for example, PV panels.
The assessor then proceeds to giving recommendations for an energy efficient building. Recommendations are worked out specifically for each building and officially given to the building owner in the certificate. The owner is not, however, obliged to implement any of the recommendations set out by the assessor.
An owner who fails to produce the EPC to the BRO, when requested to do so, may incur a fine ranging from €500 to €5,000.