Our straightforward buying procedure protects vendors and the buyers alike. As one of Malta’s most trusted names in real estate, we do our utmost to help anyone interested in buying property in Malta to get a holistic, professional service. Our expert sales associates are given the most comprehensive training in the industry, making them perfectly placed to provide you with the quality service you deserve.

We make that our buyers and sellers stay at the forefront of current market trends, providing the up-to-date information and feedback transparency necessary to make the best possible decision. Damcar Properties is a company that truly believes in a customer-orientated approach to buying property in Malta, building strong relationships with each and every client.

Once you’ve chosen your immovable property and our consultants have helped you negotiate everything from the price to any special conditions required, we’ll set an appointment to sign the Promise of Sale Agreement or ‘Konvenju’. This agreement binds both purchaser and vendor to conclude the transaction by a stipulated date (term of the promise of sale), subject to a set of conditions.

When signing of the Promise of Sale, you’ll be required to pay a 1% provisional stamp duty as part-payment of the full 5% balance, which is due upon signing of the final deed, and an agreed deposit which is generally 10% in most circumstances.

You’re free to seek legal advice and services of your own choosing, but we can also put you in touch with a notary should you require a recommendation.

Following a Promise of Sale Agreement when Buying Property in Malta

Once a promise of sale is signed, it’s presented at the Capital Transfer Duty within 21 days. At this stage, a provisional duty of 1% is paid by the purchaser; that means if the price declared for a property is €200,000, then the duty payable on contract would be €10,000. In this case, the provisional duty payable would be €2,000. A receipt for this payment is issued.

The market value of a property is not necessarily the same as the price declared on contract, so the duty payable should be calculated on the higher value.

During the Promise of Sale

The Notary Public carries out any searches required to verify the legal title and to ensure that there are no outstanding debts, hypothecs or liens on the property.

The purchaser completes all the special requirements, from organising the bank loan to checking building permits, as agreed upon with the seller and stipulated in the promise of sale. The vendor then works to meet any special requirements, which can include completing the building or finishing specific works stipulated in the promise of sale.

When you're buying property in Malta we’ll be on hand every step of the way to assist with any queries you might have. We have strong relationships with all the leading banks on the island; that means we can also arrange meetings with the bank of your choice quickly and easily.

Once the above has been completed by all parties concerned, a date is set for the actual signing of the Final Deed (Contract). The signing is generally held at the local bank’s legal offices should you be obtaining finance, at Damcar Properties, or at the Notary Public’s office. The final deed is then read and agreed upon, and the balances due are paid accordingly. These are:

• The balance of the selling price to the vendor
• The balance owed to the Commissioner of Inland Revenue for stamp duty
• The notary fees owed to the Notary Public.

What happens after a contract is signed?

Upon signing a contract, the notary publishing the deed submits the relative DDT1 form at the Capital Transfer Duty together with:

• Site-plans
• A copy of the Public Registry note
• The stamp duty payment (from the buyer)
• The capital gains tax payment (from by the seller)
• Schedule 8 (for residential property only)

The relative receipts are normally issued not later than three weeks from the date of submission of the notice of transfer (DDT1) at the department.

At this stage, an internal departmental board decides whether or not an architect should be sent to inspect the property in order to establish its market. Although evaluations are carried out professionally, they remain subjective. For this reason, the law allows a 15% tolerance between the declared value and the market value established by the department’s architect. If the difference between the market value established by the department’s architect and the price declared is more than 15%, the department will issue a claim or ‘assessment' on both the buyer and the seller.

In a buyer’s case, the claim issued will include the duty due together with the additional duty or penalty. The duty is calculated on the value added by the architect at the applicable rate; additional duty (penalty) is equivalent to 20% of that duty due. In addition, if the claim is not paid, the transferee shall be liable to pay interest at the rate of 0.75% for every thirty days or part thereof, for which interest will begin to accrue after the three months from the date of notification of the original assessment have passed.

Tax When Buying Property in Malta

The purchase of immovable property situated in Malta attracts duty on documents and transfers if the transfer document is executed in Malta. The default rate of tax payable by the buyer is 5% of the value of the property or purchase price - whichever is higher.

Where a beneficiary under a trust for immovable property transfers his beneficial interest, duty is payable on the value of that property proportionate to the value of the interest transferred by the beneficiary.

Reduction in the rate of duty

Maltese and EU citizens who have been residents in Malta for a continuous period of five years at any time before the purchase of the property are entitled to a reduction in the rate of duty of 3.5% to 5% on the first €175,000 of the aggregate value of the consideration paid for the acquisition. One key condition is that the property is bought to be lived in, as the buyer’s sole residence. If the purchase price is more than €175,000, the excess is charged at 5%.

A garage attached to, or under, the property and situated in the same block of apartments, or a garage measuring not more than 70m² which is within 500m of the property, is considered to be part of the same residence if it’s purchased on the same deed.

Refund of duty in whole or in part

If a buyer purchased their first residence under the reduced rate of duty and later purchases a second residence under the usual rate of 5%, they’re entitled to a refund of the 1.5% difference paid when buying the second residence when they sell the former within a year.

Exemptions to the payment of duty when buying property in Malta

When there’s a transfer of immovable property held in common between the same spouses, there’s no liability to duty. This includes a transfer of common property following personal separation, the dissolution of the community of acquests between them, and any partition of property common to both parties.

Provisional duty upon a Promise of Sale

When buying property in Malta and upon entering into a promise of sale, the buyer is liable for 20% of the duty. A provisional payment should accompany a notification of the promised transfer to the Commissioner.

UCA / GOZO Scheme

In the case of a purchase in an Urban Conservation Area (UCA), stamp duty will be charged at a reduced rate of 2.5%, as opposed to the standard rate of 5%.

Who acquire a residential property in Gozo, stamp duty will be charged at a reduced rate of 2%, as opposed to the standard rate of 5%.

The above benefits are all provided by the Government of Malta to first-time buyers and are presently available until 31st December 2020.

No Stamp Duty is charged on the value of the movable property, such as furniture and fittings, sold with an immovable property.