Acquisition by Non-Residents of Immovable Property
Revision No. 9 - Last Updated : 11-04-2002
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The Rule
The
Immovable Property (Acquisition by Non-Residents) Act lays down the
general rule that non-residents are prohibited from purchasing immovable
property in Malta unless they have been authorised to do so by the Minister of
Finance and provided the property so purchased is used:
·
as
the non-resident’s and his/her family’s personal residence or for other
purposes approved by Government; or
·
for
an approved industrial or touristic project or for any other approved project
or purpose which is deemed to contribute to the development of the Maltese
economy.
Definition of non-resident
The
Act lays down that a ‘non-resident’
means and includes:
·
any
individual who is not a resident of Malta; and
·
any
body of persons, whether corporate or not (e.g. association, institution,
organisation, authority, trust, limited liability company, fund, firm etc.),
which:
·
is
incorporated, registered or otherwise constituted abroad; or
·
has
its principal place of residence or of business abroad; or
·
has,
at least, 25% of its shareholding or other capital owned by an individual not
resident in Malta; or
·
is,
in any manner, whether directly or indirectly, controlled by one or more
individuals not resident in Malta.
In the case of married couples, if one of them has a Maltese passport and if the community of acquests applies to them (i.e. if the couple has been married in Malta or if the couple purchase a property after they have established Malta as their residence) then no permit is required.
Normally,
a joint purchase will only be allowed in the case of married couples however
this includes common law husband and wife.
Conditions
A
non-resident who is granted authorisation to purchase immovable property in
Malta must abide by the following conditions:
·
the
value of the immovable property must be, at least, thirty thousand Malta liri
(Lm30,000) in the case of an apartment/maisonette or, at least, fifty thousand
Malta liri (Lm50,000) in the case of any other property; and
·
the
non-resident can only own one immovable property in Malta at any given point in
time (i.e.
provided the first property is sold, a non-resident will be allowed to purchase
another property);
·
the
immovable property must be intended as a residence; or
·
if
the non-resident has been authorised to utilise such immovable property for any
other purpose, the non-resident may not, without the prior authorisation in
writing of the Minister, utilise or permit the use of such property for any
other purpose other than the authorised purpose; and
·
funds
for the acquisition of the immovable property must emanate from overseas. Documentary evidence (e.g. bank statements)
must be produced to prove this. Any
excess capital remitted for this purpose may be repatriated without
restriction.
Costs
The
main expenses incurred in the purchase of immovable property in Malta are the
following:
·
the
application fee for the permit is one hundred Malta liri (Lm100);
·
circa
one hundred Malta liri (Lm100) to cover costs for the researches into title,
liabilities etc.;
·
duty
on documents at 5% of the contract value; and
·
notarial
fees, enrolment and registration costs of around 1% of the contract value.
Designated Special Areas
The
Minister of Finance has designated as ‘Special
Areas’ the Cottonera, Chambray
and the Portomaso developments.
This
means that non-residents who are granted authorisation as detailed above may
purchase more than one unit of immovable property in the above developments and
put such immovable property purchased to any use permissible by Law.
Furthermore,
if such non-residents already own a property elsewhere in Malta, they can still
purchase a property in the Designated Special Areas.
Additional conditions
The
following additional conditions apply:
·
the
property so acquired cannot be held under any timeshare scheme or other similar
system of multi-property; and
·
where
the non-resident is a body of persons as defined above, none of its shares or
interest may be transferable by delivery to bearer*;
and
·
no
such shares or interest may be transferred without the prior authorisation in
writing by the Minister.
·
An
application fee of one hundred Malta liri (Lm100) is payable per unit of
property so purchased.
Loans
In line with the multi-currency requirements of non-resident property purchasers, a number of banks in Malta are able to provide loan facilities in major currencies including the Euro, Pound Sterling and US Dollars at highly competitive interest rates. Depending on individual circumstances, banks can even finance up to 70% of the value of the property if the loan is denominated in Maltese lira and up to 60% in any other major currency. Lending in Maltese currency is at 2.5% over the base rate (presently 4.75%). The pricing of foreign currency denominated finance is at 2.5% on the 6-month LIBOR.
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