Acquisition of immovable property in Malta: who needs a permit?

Purchasing an immovable property in Malta may be subject to certain requirements, depending on the conditions of the case at hand. As a rule, non-residents willing to acquire immovable property need to obtain an AIP (Acquisition of Immovable Property) permit issued by the Minister of Finance and valid only for the property and purpose indicated therein.

In order to determine whether a person requires an AIP permit or not, two important characteristics must be taken into consideration: whether the person is a citizen of Malta or of an EU Member State and whether he has resided in Malta for a continuous period of 5 years. If both requirements are satisfied, the individual can acquire immovable property in Malta without an AIP permit. If not, the intended use of the property is given priority. The person will not need an AIP permit, if the property will be used for residence, business activities or supplying services.

Legal persons established and operating in the EU may acquire immovable property in Malta without the need of a permit, as long as it is in relation to the purpose of the legal entity and the entity is controlled by the EU citizens. In case of commercial partnerships, there is no need to obtain an AIP permit, if 75% of the share capital is held by EU citizens.

Exemptions applicable to everyone

There are a number of exemptions that are not dependent on the type of property or the person acquiring it. These include:

• Acquisition of a grave or grave site for a non-resident person.
• Redemption of ground-rent or other burden relating to an immovable by a non-resident person.
• Inheritance of an immovable property.
• Purchase of property in a Special Designated Area (e.g. Portomaso Development, Tignè Point, Smartcity).
• Acquisition of further divided or undivided shares in immovable property.
• Partition of immovable property between co-owners.
• Purchase of immovable property by a company from one or more of its members who hold over 50% interest of its share capital.
• Donation of immovable property to a spouse, descendant or ascendant within the direct line, or to the brothers or sisters in the absence of descendants.

Mandatory issuance of the AIP permit

There are certain instances upon which the law provides for an AIP permit to be issued without the need for the Minister’s discretion. Currently, policies hold that this may take place in the following circumstance:

• The purchase of immovable property is required due to a Maltese government project, which relates to an industrial or touristic project contributing to the development of Malta’s economy.
• The immovable property is worth minimum €70,000 (an apartment) or €117,000 (any other immovable property type) and is intended to be primary residence.
• The immovable property is a garage within 500 metres from the applicant’s previous residence or an adjoining parcel of land or building intended to be used as an extension of the previous residence.

The issuance of the permit will not apply if the property is considered to be of historical importance.

In cases involving third-country nationals (non-citizens of the EU) who wish to acquire immovable property in Malta, an AIP permit is required unless one of the aforementioned exemptions applies. The Minister’s discretion is also required in cases where a Maltese or EU citizen, who has not resided in Malta for 5 continuous years, wishes to acquire property for secondary residence purposes.

By Dr Maria Chetcuti Cauchi. This text may be published elsewhere, fully or partly, only if the authors and their contact details are properly indicated. Alternatively, the source page needs to be duly referred to.