WHAT IS A ‘KONVENJU’?
A konvenju is also known as a ‘promise of sale’ document, through which vendors (or sellers) bind themselves to selling a property to the purchasers (or buyers), who in turn bind themselves to purchasing the same property at an agreed price. This agreement also stipulates a fixed period of time, as well as any agreed terms and conditions (such as work that needs to be completed, or facilities that are included) by the time the property is officially transferred. The konvenju needs to be registered with the Inland Revenue Department within 21 days of it being signed.
WHAT HAPPENS IF THE BUYER OR SELLER WANTS TO EXTEND THE KONVENJU?
If the parties (the buyers or sellers) want to extend the konvenju for whatever reason, a new document must be signed. This document will refer to the original konvenju and agree to extend the validity of that konvenju to a new, later date. This extension also needs to be registered with the IRD within 21 days of it being signed.
WHAT IS THE COST OF A NOTARY IN MALTA?
In Malta, notarial fees are fixed by law and the Notarial Council. These fees depend on the subject matter, the nature of work being completed by the notary, and the costs of certain subjective fees (such as title searches). Usually, these fees will also include fixed (established by law) Public Registry fees, which the notary will collect so as to register your contract. You can find a rough estimate of the fees stipulated by the Notarial Council, as well as a billing calculator, here.
WHAT ARE TITLE SEARCHES?
Title searches are carried out in order to ascertain whether the property in questions really does belong to the vendor, and whether there are any debts on the property (such as bank loans). Title searches will also look into any other legal issues that need to be taken care of before the property can be officially transferred to its new owners.
WHAT IS CAPITAL GAINS TAX IN MALTA?
Capital Gains is a tax that applies to the sale of property. Capital gains earned when the property was owned for less than seven years can be taxed in two ways: at a flat rate of 12% on the selling price or at progressive rates under the old system. For detailed information on Capital Gain Tax in Malta, as well as certain exemptions, please click here.
WHO PAYS FOR STAMP DUTY IN MALTA AND WHAT IS THE COST?
In Malta, stamp duty is always paid by the purchaser. With the exception of a few cases (such as donations of property by parents in favour of their children and others), stamp duty is generally paid at rate of 5%. However, if you are purchasing a property with the intention to reside in it and make it your sole, ordinary residence, you will pay 3.5% on the first €150,000, and 5% on the rest of price. As of the 2013 budget, a new scheme has been approved whereby, until the end of 2014, people who will be purchasing a property for the first time with the intention of moving into it as their residence will NOT pay any stamp duty (the 3.5% mentioned above) on the first €150,000 of the price.