Expatriates relocating to Malta often find themselves navigating the intricate process of selling their property after having purchased it as part of their citizenship and residency investment. Whether aiming for a higher return on investment or seeking to enjoy the fruits of your endeavour, selling property in Malta requires strategic planning and an understanding of the local market dynamics.
This is why we’ve put together this guide that walks you through the essentials and spills the beans on the best ways to maximise your property’s sale potential, ensuring you achieve your desired outcome.
Getting the Basics Right
If you want to navigate the property sales process effectively, understanding the legal intricacies involved is crucial for a successful transaction. Here are four basic processes that lie at the heart of selling a property.
Obtain an Evaluation from an Architect
It is advisable to ask a warranted architect to evaluate your property to get the proper and current value of your property in consideration of the current local market prices. A professional architect can help you survey the property to enhance its potential and identify any questions that your prospective buyers may be asking before you advertise and open the property doors to interested buyers.
Promise of Sale
Initiating the sale journey typically involves signing a Promise of Sale Agreement, also known as Preliminary Agreement (or Konvenju in Maltese). This crucial document, drawn up by the notary, outlines the terms of sale and deposit arrangements. Typically, there’s a waiting period of 3-6 months before finalising the deed.
Final Deed of Sale
Once satisfactory conditions are fulfilled and thorough due diligence is conducted by the notary, the Final Deed of Sale is signed. Sealing the deal involves the transfer of ownership, with the buyer paying the remaining balance and receiving the keys. Both parties must fulfill tax obligations to conclude the transaction.
Withholding Tax or Property Transfer Tax
A critical aspect of property sales is understanding the withholding tax, also known as property transfer tax. Generally, this tax amounts to 8% of the property's value for acquisitions from 2004 onwards or forming part of a project. For properties acquired before 2004, the tax rate is 10%. It's worth noting that tax rates vary based on acquisition date and property type. Making sure you comply with tax obligations is key to ensuring a smooth transaction.
Energy Performance Certificate
In line with EU and Maltese legislation, property owners must provide an Energy Performance Certificate (EPC) to potential buyers or tenants when selling or renting out buildings. The EPC rates a building's energy efficiency and provides recommendations for improvement. This document is issued by a registered Energy Performance of Buildings (EPB) assessor, who inspects the property and calculates its energy use rating. A full list of registered EPB assessors can be found here.
The EPC is valid for 10 years and assesses various aspects of the building, including its geometry, construction materials, and energy systems. Failure to produce the EPC when requested can result in fines ranging from €500 to €5,000.
Understand the Competition and Know the Value of Your Property
Navigating the Maltese real estate market requires a keen understanding of competition levels and property values. For instance, selling an apartment in bustling areas like St. Paul’s Bay, Sliema, or Marsaskala requires savvy marketing strategies to stand out among similar offerings.
In view of this, setting the right asking price is indispensable. Depending on factors like property type, location, and condition, the level of competition can vary, so it’s crucial to factor in these different aspects when pricing your property.
Once you've set your asking price, it's time to list your property. But remember, if you price your property too high, you may find it sits on the market for months without attracting any interest. On the other hand, if you price it too low, you may miss out on potential profits. So, striking the right balance is vital to ensure that your property is listed at a competitive price that will attract buyers.
Increase your Property’s Curb Appeal by Staging it Well
“Curb appeal” refers to the visual allure of a property as seen from a distance by potential buyers. The importance of high-quality visuals cannot be overstated here, since many buyers are heavily influenced by what they see through online images. Therefore, investing in professional photography should be on top of your agenda; you want to ensure you highlight your property´s best features and make that strong first impression.
To further enhance your property’s appeal, decluttering and depersonalising your property is a must. This allows potential buyers to actually see themselves living there. Addressing any maintenance issues and keeping your property clean is also recommended as it sets the tone for buyers to explore further, and maximises your chances of selling at the full asking price.
You might even want to consider undertaking more extensive renovations to increase your property´s value and saleability. Upgrading windows, kitchens bathrooms, and heating systems can significantly improve appeal and justify a higher price. At the same time, avoid over-furnishing when selling, as buyers often prefer to envision their own style in a space. Besides, over-furnishing can give the impression that the property lacks appeal on its own merits, so finding that sweet spot ensures that you don’t detract from the property’s appeal.
Understand your Potential Buyers
Even if you’re aware of common pitfalls, interacting with potential buyers can still be challenging. First-time sellers may become overly focused on making a positive impression, potentially neglecting the needs of buyers. Emotional ties to your property might lead you to emphasise aspects that don't resonate with buyers, particularly in competitive markets.
Additionally, seasoned buyers may capitalise on the eagerness of first-time sellers by presenting low offers. In view of this, during negotiations, the key is not to push for a different price but to ask insightful questions for a better understanding of the buyers' interests. This approach can uncover overlooked aspects that you can then address during the negotiation process.
Finding the Right Timing: Avoid being Too Quick or Too Slow to Sell
You need to have a mix of patience and assertiveness to achieve the best possible sale outcome. On one hand, you don’t want to rush desperately into an offer because this may result in undervaluing your property. On the other hand, waiting too long can prolong the selling process unnecessarily.
If you want to maximise the property’s sale potential without undervaluing it, it’s crucial to regularly reassess pricing strategies based on market feedback. As a rule of thumb, if you’re consistently receiving offers that are at least 25% below your asking price, it’s a sign that you may have initially priced the property too high.
Invest in a Competent Real Estate Agent to Help you Negotiate the Sale
Given the complexity of buying or selling a property and the numerous pitfalls for inexperienced individuals, it’s wise to seek the guidance of a skilled real estate agent. These professionals are trained to navigate the intricacies of the whole selling process, making it much smoother and guaranteeing the best possible outcome.
By working with a consultant, you gain access to invaluable insights into pricing strategies, marketing techniques, and legal requirements, simplifying the process and minimising the typical challenges associated with selling. Your consultant will personally meet with you to photograph your property for listing and offer advice on valuation, setting the asking price, and estimated timeframes for sale, all tailored to your specific situation.
Despite being a tiny island measuring just 14.5 kilometres in width and 27 kilometres in length, Malta boasts a variety of unique locations that cater to diverse tastes and needs. Let us walk you through some interesting locations.
For a Bustling Atmosphere: Valletta, St. Julian’s, or Sliema
Valletta, Europe's smallest capital, offers a cultural haven with its charming cafes, and eateries. Despite its tourist appeal, the city maintains a peaceful atmosphere, making it popular among expats seeking cultural immersion.
Boasting a seafront throughout their eastern borders, St Julian’s and Sliema cater to social butterflies seeking a vibrant nightlife and plenty of entertainment options. However, these locations are also synonymous with higher traffic, steep property prices, and perpetual tourist crowds.
Modern Living: Swieqi, San Ġwann, and Gżira
For modern professionals or young families, Swieqi, San Ġwann, and Gżira are ideal. Situated just a stone’s throw away from Sliema and St. Julian’s, they often provide larger living spaces and tranquil neighbourhoods while still being close to modern amenities.
A Mix of Urban Comfort and Suburban Calm: Madliena, Naxxar, and Mosta
Explore Mosta and Naxxar for a blend of serenity and convenience. Madliena is also a great option, known for its stunning views and abundance of villas, although property prices here may be on the higher side.
Stunning Views and Affordability: Mellieħa and St Paul’s Bay
These northern coastal towns promise beautiful vistas and a laid-back vibe. They’re also ideal for retirees seeking affordability, with cheaper property prices compared to the Harbour Area.
Tranquillity at its Best: Gozo and Marsaxlokk
If you value peace and a slower pace of life, then Gozo, Malta’s sister island is the perfect place for you. Accessible via ferries, Gozo attracts retirees seeking solace with its quaint towns and unhurried lifestyle, boasting a range of exceptional properties.
Heading down to the southern reaches of Malta, Marsaxlokk stands out for its popular market, seafood restaurants, and authentic charm. This location offers a quiet alternative to tourist-heavy areas, celebrating coastal living and attracting outdoor enthusiasts with its snorkelling sites and cliff-jumping spots like St. Peter’s Pool.
Types of Properties available in Malta
In Malta, you’ll find a variety of property types, with the market spanning a balance of modern and traditional styles, as well as different sizes and prices to cater to different needs. Here’s an overview of the spectrum of properties available across the island.
To sum up, whether you’re a seasoned investor or just dipping your toes in the property game, successfully navigating the property market is all about strategic planning, knowing the market well, and nailing the legal processes. If you get the basic right and leverage our insider tips, you’ll be on your way to maximising your property’s sale potential and achieving your desired outcome in Malta’s dynamic real estate landscape.
We at DZ Advisory are here to guide you every step of the way. If you would like to receive more information, please provide us with your contact details and one of our team members shall be in contact with you promptly.