Malta, strategically located in the heart of the Mediterranean, enjoys the sun most of the year. Blessed with long, dry summers and short, mild winters, this small island approximately 60 miles south of Sicily is a year-round destination for people from Europe and elsewhere. Besides the good weather, Malta has history: in variety and abundance, romance, a smell of the Orient, beautiful old golden limestone houses, warm and welcoming English speaking people, safety and good standards of education and medical care.
EU membership, a favorable tax structure and good infrastructure have made Malta a preferred destination for European retirees, shoppers and lifestyle investors. For pensioners, the income tax rate is as low as 15%. There are no municipal, patrimonial or inheritance taxes. Corporate tax rates range from a maximum of 35% to zero. In general, living costs are lower than in the rest of the EU.
Although most of the demand for property in Malta is driven by locals who consider property to be one of the best investments, foreign demand for Maltese property is also increasing with the improvement of the economic situation in some EU countries. . It is encouraging that the recession has not affected the property market in Malta as much as it has in other countries and many foreign buyers now view the country as a relatively safe haven for their funds.
The Maltese economy is quite stable and heavily dependent on tourism. In recent years, the number of low-cost flights to Malta has increased significantly, attracting more visitors each year. 2009 and 2010 saw a marked increase in tourist traffic relative to previous years. Multinationals based in the Middle East are also setting up offices in Malta with the aim of reaching out to emerging markets. Consequently, the demand for rentals has increased.
Malta’s property prices, which had weakened to some extent in 2008, are now in positive territory largely due to rather low mortgage loan rates, growing demand for rental properties in some areas, and property availability. quality at affordable prices. Overall, the Maltese property market has performed better than many others in the EU, especially those in Spain, Greece, Portugal and Cyprus.
According to the Central Bank of Malta, price growth for the second quarter of 2010 had stabilized at moderate levels compared to the previous quarter. The bank attributed the increase to prices for apartments, which were higher than those for character houses, villas and townhouses. While prices for duplexes fell on a year-over-year basis, prices for townhomes remained the same.
As indicated in a report based on a survey conducted by the Royal Institution of Chartered Surveyors, price increases are generally better than expected. Although in some areas prices are falling, in others the trend is upward. Regions like St. Juliens and Sliema are doing well.
Citizens of EU countries can buy property in Malta subject to conditions. However, they can purchase more than one property in SDA or specially designated areas such as Tigne Point, Portomaso, Cottoenra, Chambray, and Manoel Island. A recent amendment allows foreigners to rent personal property to short-term vacationers if the property meets the standards set by the Malta Tourism Authority.
The government recently decided to exclude non-EU citizens from the Residents Program. This measure could have an adverse impact on sales and property prices in areas that are popular with citizens of non-EU countries.
In general, this could be an opportune time to invest in property in Malta as long as you study the market well and identify areas that have a constant demand for sales and rentals and the potential for price growth. Apartments in Sliema, St. Andrews and St. Juliens are usually good buys. Maltese properties have quite a few advantages: prices remain relatively reasonable, buyers can choose from a variety of modern apartments, as well as charming old houses, and prices are expected to increase in the coming years.
Points on property transactions:
• Once the buyer and seller have agreed on a price, they enter into a preliminary agreement and the buyer is usually required to pay a 10% deposit.
• This agreement is subject to the issuance of an AIP permit for non-residents.
• The Notary Public conducts a search on behalf of the buyer to verify that the property has clear title.
• Once the conditions of the preliminary agreement have been met, a definitive deed of sale is drawn up and signed by both parties.
• EU and non-EU citizens must meet a number of conditions to buy property in Malta.
• They must also prove that the funds for the purchase have originated abroad.