When selling property in Malta, we recommend using the services of an experienced estate agent to help minimise stress and create a smoother process overall.
With Damcar Properties on your side, you’ll benefit from the following:
Once you’ve decided to work with us and have signed a selling agreement, we’ll market your property on your behalf, taking high-quality photographs and writing a tailored description of your property too.
Once your property is on the market, make sure your property is completely ready for purchase to give it the best chance of selling quick. First impressions really do matter, and in our experience, buyers often make their minds up before even properly viewing the property.
It’s just as important for the interior to make a positive impression. You want the potential buyer to see this as a possible home, and to be able to imagine themselves in it.
Once you’ve found a buyer and terms have been agreed, it’s time to sign a Promise of Sale Agreement with them. This agreement is drawn up by the Notary and binds both of you until the final deed of sale is signed. Once that's done, a 10% deposit is usually lodged with the notary or the estate agent by the buyers. This deposit is forfeited in your favour if the buyer fails to sign the final deed for no valid reason at law.
How long the agreement is valid for is agreed between the relevant parties, but generally speaking these contracts are good for three months. During that time, the notary registers the Preliminary Agreement in terms of law, carries out any necessary research into the title, and applies for any permits if necessary.
The final tax on transferring immovable property acquired after January 1st 2004 comes to 8% of the total transfer value. In the case of properties bought before January 2004, a rate of 10% applies. The tax is payable when entering into the contract of sale.
Individuals who don’t trade in immovable real estate, and who transfer this type of property within five years of the acquisition date will be taxed at 5% instead of 8% on the transfer value.
Capital gains tax isn’t charged when the property transferred has been the owner’s residence for at least three consecutive years before the date of transfer, and has been disposed of within 12 months of leaving the property.
Other exemptions apply when it comes to property transfers between group companies, sales by court order, and transfers upon separation.
Capital gains tax on the sale of property acquired through inheritance (Causa Mortis) is charged at 12% on the difference between transfer value and the acquisition value outlined in the deed of Causa Mortis. If the property was inherited before the 25th November 1992, the tax rate comes to 7% of the transfer value.
In cases where Capital Gains are due, our tax consultants can apply to the Commissioner of Inland Revenue for a reduction. This is done by submitting the relative tax return and a detailed account of every expense incurred during the acquisition and sale of the property.
Once a promise of sale has been signed, it must be presented at the Capital Transfer Duty within 21 days of the actual signing. The market value of the property doesn’t have to be the same as the price declared on contract. That means the tax payable should be calculated based on the higher value.
Upon signing the contract, the notary publishing the deed submits the relevant ‘DDT1’ form at the Capital Transfer Duty, together with site-plans, a copy of the Public Registry note, stamp duty payment, the capital gains tax payment, and Schedule 8. Any relevant receipts are normally issued no more than three weeks from the submission date of the notice of transfer at the department.
Here, an internal departmental board decides whether or not an architect should sent to inspect the property to establish the market value of the property. Although valuations are carried out professionally, they remain subjective, and because of this, the law allows a 15% tolerance between the declared value and the market value set by the architect. If the difference between the market value as established by the department’s architect and the price declared is more than 15%, the department will assess both the buyer and seller.
In the vendor’s case, only the additional duty is charged, and that is equivalent to 20% of the duty to be paid by the buyer.