Purchasing Real Estate in Malta (AIP)
The purchase of real estate in Malta by non-residents is regulated by the Immovable Property (Acquisition by Non-Residents) Act. This law restricts the direct ownership of property by non-resident companies and individuals. Property purchased by such companies is only permitted if the property is:
- Required for the company‘s own use or as residence for company personnel.
- To be used for an approved industrial or tourism project or other project that contributes to Malta‘s economic development. Situated in an approved development zone (Special Designated Area).
Non-residents wishing to acquire immovable property in Malta require an AIP permit and may do so only under certain conditions. The resale of immovable property by a non-resident is permitted provided this is to a Maltese resident. Repatriation of full resale price, including profits, is allowed without complications.
Citizens of all European Union Member States, who have resided in Malta continuously for a minimum period of five years at any time preceding the date of acquisition, may freely acquire immovable property without the necessity of obtaining a permit. Citizens of European Union Member States who have not resided in Malta for such period may only purchase a primary residence or immovable property required for business activities or supply of services without the necessity of obtaining a permit. An AIP permit is required to acquire immovable property for secondary residence purposes where the criterion of continuous residence for a minimum period of five years is absent.
Individuals who are not citizens of EU Member States may not acquire any immovable property without obtaining such a permit.
Procedure for acquisition of Property
The acquisition process involves the drawing up and negotiation of a preliminary agreement of sale which binds both parties. This agreement is usually valid for three months but a longer period could be agreed upon. A sum equivalent to 10% of the value is paid as a deposit of the purchase price in addition to 1% of the stamp duty. The preliminary agreement is signed by the respective parties, whereby the parties undertake to enter the final deed of sale.