Why Malta
The Maltese purchasing process is straightforward, offering maximum protection to both vendor and purchaser. Once you would have decided on an immovable property and reached an agreement with the owner, do confirm the following before you enter into a promise of sale:
◆ Price
◆ Ground rent
◆ Features included in the price
◆ Payment terms
◆ Works to be undertaken by owner
◆ Term of promise of sale agreement i.e. when the final deed can be signed. A promise of sale agreement without a stated term is valid for three months.
When the above points are cleared and agreed upon, a notary public has to be appointed and the promise of sale agreement can be drawn up. The promise of sale is a binding agreement for both parties and contains the points upon which agreement is reached. The vendor, purchaser and property in question must be identified clearly in the promise of sale agreement. Both vendor and purchaser are bound to sell and buy the property respectively at the agreed price. It is normal practice for 10% of the purchase price to be paid as a deposit on account as a sign of goodwill by the purchasers and their intention to appear on the final deed of purchase. Certain property developers request staggered payments: 10% deposit; 20-40% once the property is in shell form; and the rest on the day of the signing of the final deed of sale.
Promise of sale agreements are registered with the Inland Revenue Department and a 1% provisional stamp duty is payable on the contract value of the property being transferred. The provisional duty is set off against the final duty due on the contract sale, or is refunded should the deal fail to materialise.
During the term of the promise of sale agreement, the notary and the parties involved must fulfil certain duties and obligations. The notary researches the property and verifies legal title thereby ensuring there are no outstanding debts, or hypothecs on the property, while the purchaser must honour the conditions contained in the promise of sale agreement, such as bank loan application, within specified time frames. The vendor must also honour his conditions, contained in the promise of sale agreement, such as finishing, or refurbishment works within specified time frames.
The notary drafts the final deed, prepares it for signature and notifies the parties concerned. Once every condition of the promise of sale agreement is complete and all duties fulfilled, the parties get together to sign the final deed. The normal procedure is as follows:
◆ If a bank loan is required for the purchase, the final deed is signed at the bank.
◆ The contract of purchase is read out and, if everything is in order, the parties concerned sign it.
◆ The balance due i.e. the purchase price less any deposits paid on account, is paid to the vendor.
◆ The parties concerned settle their relative expenses on the purchase.
◆ Keys to the property are passed on to the purchaser.
◆ The notary public registers the contract at the public registry and land registry.
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