Buying Guide: Malta

As a popular holiday destination, they have always offered sun, sea, beaches and history, but have become increasingly cosmopolitan of late, with an exciting blend of chic bars and nightclubs, as well as upmarket boutiques. So, if you’re looking for a Mediterranean haven with all the creature comforts of home, Malta could very well hold them.

Full name
The Republic of Malta

Population
413,600 (Eurostat, 2009)

Currency
Euro (since 2008)

Capital city
Valletta

Major cities
Valletta, Sliema, Birkirkara and Victoria, Gozo

Languages
Maltese and English (Italian is also widely spoken)

Climate
The Maltese Islands enjoy a typically Mediterranean climate, with mild winters and hot, dry summers. Winters are typified by lashings of rains and plenty of wild wind, with temperatures hovering between nine and 15°C. The summers can be sweltering, with temperatures sometimes reaching 45°C in July and August.

Location
Smack-bang in the centre of the Mediterranean, the Maltese Islands are just a stone’s throw away from Sicily in the north, and Tunisia in the south. Regular ferries connect passengers and cars to Italy on a daily basis, while the average flying time from mainland Europe is just two-and-a-half hours.

Economy
Inflation rate (consumer prices): 2.3 percent (2009 est.)
GDP (official exchange rate): $9.6 billion (2009 est.)
GDP (purchasing power parity): $9.9 billion (2008 est.)
GDP (real) growth rate: -4 percent (2009 est.)

Joining the Eurozone in 2008 has definitely impacted the Maltese economy and most of the population would argue that prices have risen substantially. The island’s prime strengths are its favourable location, its limestone and its hardworking labour force. On the other hand, it lacks numerous natural resources and only produces about 20 percent of its food needs, leaving it dependent on foreign trade for the majority of items. Malta’s main industries are tourism and financial services, as well as foreign trade and the manufacture of electronics.

Property facts

Restrictions
There are no restrictions on EU residents seeking to buy their first home on the islands – whether as a primary residence or holiday home. The norm is that permits are usually required for those hoping to buy a second home on the islands, as well as commercial or industrial property. Meanwhile, non-EU residents will also require a special permit (found in Chapter 26 of the Laws of Malta) in order to purchase any property.

However, areas being marked as Specially Designated are on the increase, allowing both EU and non-EU citizens to purchase within them without restrictions.

Forms of ownership
While some properties in Malta are freehold, others have perpetual or temporary ground rent that needs to be paid off.

How safe is it?
Malta is a very safe destination; in fact, it is probably one of the safest spots in the world, with a very low violent crime rate and stable political system. Illegal immigration, however, is one of the major issues that threatens to cause disturbances if a solution is not found. As an EU member state, property purchases fall under EU laws that aim to protect all the parties involved by giving equal rights
to each of them.

Mortgages
Non-residents can get a mortgage in Malta once they have the permission of the islands’ Central Bank. Some banks will still lend up to 90 percent of the value of the property but the recent finical crisis has put a spoke in that wheel, and these days most prefer to only lend around 75 percent.

The buying process
Buying a property in Malta is generally a quick and straightforward process. Whether or not buyers know the islands, they will be able to find out everything they need to know online or through a local real estate agent. Most have a strong online database of properties, so one will be able to search through their list before arrival to get a taster of things to come. Viewings are vital and most agencies will be happy to accommodate visitors during the stay.

After decided on a property, the terms and conditions of sale, its price, and a preliminary agreement (known locally as a konvenju) will be drawn up and signed by the vendor and purchaser. This agreement binds both parties to the purchase/sale of the property and, at this point, buyers will also be required to pay a deposit, usually of around 10 percent.

That agreement is usually valid for three months, within which time the vendor will have to solve any issues on his side, while buyers will need to provide proof that they have secured the remaining amount that is to be paid. One will also need to engage the services of a public notary to carry out all the necessary research on the property.

Once the relative permits have been issued and the research is deemed conclusive, a final contract of sale takes place and the property officially changes hands.

Choosing an area
Despite actually only being the size of Heathrow Airport (yes, really), the Maltese Islands offer plenty of different property hotspots to choose from, each with their own style and nuances. The centre of the island is the most built up, with plenty of chic apartment blocks by the sea and city pads, perfect for professionals. The north and south tend to be more rural, with larger villas, country-view apartments and houses bursting with traditional local features.

Gozo has also become a popular area for buyers, favoured for its even more laidback way of life. As in Malta, there is a huge variety of properties to choose from, including apartments, townhouses and villas.

Viewings
There’s no shortage of estate agents in Malta, and all of them will be eager to show parties around the islands. Many offer specialised inspection trips and will arrange your flight and accommodation to help you to get over here. As the islands are fairly small, you can expect to slot several viewings into one day, even if they are in different regions.

Legal representation
Having found the house of your dreams, you will be advised to appoint a notary to draw up all the necessary paperwork between yourself and the vendor. All the agreements can be written up in English, on request, and everything should be pretty straightforward.

The sale
Most properties will be marked up a bit to allow for haggling; so don’t give in too easy. Estate agents will communicate with the seller on the buyer’s behalf until you both agree on the terms, conditions and costs.

It usually takes between three to six months for a sale to be finalised, including the konvenju period. Be sure to check the house thoroughly before taking ownership of the keys, as it may be hard to encourage Maltese contractors back into the building once everything is done and dusted.

Taxes
Firstly, income tax is set at 15 percent with a minimum liability of €4,200 per annum. Relief from double taxation also exists with a large number of countries.

There aren’t any monthly or annual property taxes to pay on the islands, and there is no such thing as capital gains tax. However, when coming to sell, one will be liable for transfer tax if the property hasn’t been your main residence – sometimes up to 35 percent if the home hadn’t yet been owned for a full three years.

Area Guide

Valletta
For a capital city, Valletta doesn’t necessarily tick all the boxes for fast-paced, modern living – but what it lacks in cosmopolitan style it certainly makes up for in charm and rich history.

First fortified during the reign of the Knights of St John, the city now bustles during the day but is almost completely silent at night, with just a few restaurants and wine bars to keep one entertained. It is quite hard to find property in the inner sanctum of Valletta’s shopping streets, while the outskirts have been up-and-coming for a while. Townhouses are usually quite expensive, but many spiral upwards and have stunning sea views from their roofs that make them well worth the investment. As the locality is striving to retain its unique character, there have been few new developments in recent years. Thus, while there are apartments to be found, these tend to be turn-of-the-century and require extensive refurbishment work.

The South
The south of Malta is one of its best-kept secrets. Although not very popular with most local buyers, there is vast selection of properties to be unearthed, including traditional houses of characters and homes with a touch of history to them. And they tend to be a little cheaper too.

The Three Cities, just across from Valletta’s Grand Harbour, is flourishing thanks to the redevelopment of its marina. Just across from the super yachts, little houses can still be snapped up at bargain prices, some of them with sea views. Alternatively, the seaside villages of Marsaxlokk and Marsascala have plenty to offer, including new-build apartments and typical village townhouses.

The North
Malta’s north is an unusual mix of unspoiled spots and very touristy ones. Mellieha is a village favoured for its proximity to the sea and its wide, open spaces perfect for rambling. Townhouses and apartments in the centre make for a nice base in a friendly area, while the exclusive Santa Maria Estate offers sprawling villas with pools and incredible views.

Alternatively, the Bugibba-Qawra-St Paul’s Bay area winds along the coast, offering a long stretch of apartments, many with unobstructed sea views. The region is a ghost town in the winter months, but comes alive with the hot weather, when it is invaded by tourists. It has long been favoured by ex-pats and, as a result, boasts numerous pubs and bars, as well as plenty of places to get a great full English breakfast

Sliema & St Julian’s
Easily Malta’s most happening region, St Julian’s and Sliema are worlds away from any visions you may have of quaint seaside villages and whitewashed boathouses. This is a commercial centre like so many others across Europe – with high-rise apartment blocks, chic shopping streets and a vibrant night scene.

Popular with singles and young couples, land here is at a premium, so property is expensive. Townhouses have given way to large apartment complexes and there are luxury homes to be found along the pretty promenade or around the exclusive Portomaso Marina. Both St Julian’s and Sliema certainly provide the convenience of having everything on your doorstep, but are unlikely to be a perfect match for those seeking a picturesque and peaceful Mediterranean hideaway.

The Centre
Malta’s core is one of its busiest and most beautiful areas. Away from the sea, you will find traditional towns and bustling commercials hubs, as well as some truly delightful properties.

Naxxar is one of the most popular property spots, thanks to its fantastic location and variety of properties. The bubbly town seems to specialise in old-worldy townhouses and offers excellent choices if you fancy the challenge of something unconverted. Nearby, Mosta is also charming, with numerous new developments and apartments.

Still central, Lija feels like a world away from some of its neighbouring towns. Sleepy and completely residential, property here is some of the most expensive in Malta. Similarly, Mdina also boasts an expensive postcode, matched by the historic palazzos and grand townhouses found here. Available properties in these spots are hard to come by, but do try, as there are gems to be discovered.

Gozo
Gozo is Malta’s smaller and sleepier sister island. Once only popular with retirees, it has blossomed into the ideal property spot for young families and couples searching for a retreat.

With no direct flight to the island, visitors have to land in Malta and take the 25-minute ferry from Malta’s northernmost tip. It is pretty small, and visitors could probably whizz around in about 20 minutes if they tried – but there is a lot going on.

The capital, Victoria, is a warren of little alleyways and colourful doors. This is the ideal place for those seeking small townhouses and perfect if you hope to immerse yourself in village life. Marsalforn and Xlendi are two of the most popular areas for sea views, and with numerous apartment complexes dotted along the shore, there are several options open to buyers.

Traditionally, it has been cheaper to buy property in Gozo, but prices have shot up in recent years due to the influx of mainlanders purchasing a holiday home here. Nevertheless, there are some diamonds in the rough, including unconverted houses of character, modern complexes built within historical walls, and delightful sea view apartments.