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Hi Christine,

Non-residents may freely purchase one property in Malta, subject to obtaining an AIP (Acquisition of Immovable Property) permit.  However, owning property in Malta does not entitle a person to live in it; obtaining residency is an entirely different matter.

Non-EU citizens may obtain residency via an employment license or via the newly enacted residency scheme entitled "the high net worth individuals residency scheme". 

Beware, the conditions below will apply:

FOR EMPLOYMENT:

The qualifying criteria for Maltese ordinary residence in respect of third country nationals vary from those applicable to EU/EEA nationals. We are setting out below a few of these possibilities. An employment licence is required in order for non-EU/EEA nationals to work in Malta. This is granted upon satisfying certain criteria. Candidates qualified in the financial services and information technology fields are sought after and therefore it may be easier for such individuals to get an employment licence.
Self-Employment

In order to qualify to apply for self-employed status and work for one's business, a third country national must meet one or more of the following criteria:

    An investment of at least € 100,000 without an EU/EEA partner, or an investment equivalent to € 40,000 with a Maltese partner. The investment must consist of fixed assets and/or capital used for business purposes. Rental contracts are not eligible;
    Status of a highly skilled innovator with a sound business plan, committed to recruiting at least three EU/EEA nationals within eighteen months of establishment of business;
    Status of sole representative of an overseas company (with a sound reputation and established for at least three years abroad) wishing to open a branch in Malta; or
    The holding of a directorship in a company forming part of a project that has been formally approved by Malta Enterprise, and which has been formally notified by the latter to the Employment and Training Corporation.

A firm commitment regarding the engagement of EU/EEA nationals as part of the applicant's staff will assist in the favourable consideration of an application.

FOR HIGH NET WORTH INDIVIDUALS:

Applicants being non-EU/EEA/Swiss nationals are required to own property in Malta at the time of application. Such "qualifying property holding" must have been purchased after the 14th of September 2011 for a value of not less than €400,000, and must serve as the applicant's habitual residence, and that of any accompanying family members. Alternatively, the applicant may opt to rent property in Malta for not less than €20,000 per annum. The old threshold of €116,000 continues to apply to properties purchased before this date in pursuit of a Permanent Residence permit.
Financial Resources and Insurance

The applicant must not already benefit from the Residence Scheme Regulations or from the Highly Qualified Individual Rules. As in the case of EU/EEA/Swiss nationals, the applicant must also be in receipt of stable and regular resources which are sufficient to support himself/herself as well as any accompanying dependants and be in possession of adequate health insurance cover for himself/herself and any accompanying dependants covering the EU Territory. A new requirement is that the individual must satisfy a "fit and proper test" in order to be granted a permit under this scheme.
Tax Treatment

A 15% rate of tax is charged in respect of foreign income remitted to Malta with the possibility of claiming double tax relief. The minimum annual tax stands at €25,000 with an added €5,000 per dependant, after claiming any double tax relief. Other chargeable income of the beneficiary (and that of his or her spouse) that is not taxed at the special rate of 15% will be taxed at 35%. A beneficiary of this scheme and his or her spouse cannot opt for a separate tax computation.

A one-time registration fee of €6,000 is levied by the Government.
Entry and stay in Malta

Non-EU/EEA/Swiss nationals applying under the High Net Worth Individuals Residency Scheme have two options in relation to their entry and stay in Malta. The first is via the application for a visa to enter and stay in Malta, which needs to be renewed periodically or to apply for a qualifying contract.

A qualifying contract is an agreement that is entered into between the Government of Malta and the applicant wherein the applicant delivers to the Government of Malta a sum of €500,000 and €150,000 for every dependent ("the Bond") which the Government of Malta holds by title of gratuitous voluntary deposit. The Bond will be restored to the applicant if such applicant declares and proves to the Government of Malta that he/she has renounced to the special tax status granted under High Net Worth Individuals Rules, prior to the expiration of four years from the date of the qualifying contract.

On the other hand, if the applicant either has the intention of becoming a Long-Term Resident prior to the expiration of four years from the date on which he has applied for special tax status in terms of the High Net Worth Individuals Rules, or becomes a Long-Term Resident prior to the expiration of four years from the date on which he has applied for special tax status in terms of the High Net Worth Individuals Rules, he/she will lose all the rights over the Bond.

Should an applicant be a Long-Term Resident, the qualifying contract will specify that the Bond amounting to the whole of the bond will be immediately forfeited in favour of the Malta Government.

Thanks for this useful post asana!

Harmonie.

Hi Christine,
We bought a property in Malta although we are not permanently here. We are UK citizens and work there. In Otober 2007 we looked at new apartments in St Paul's Bay area. We started the process of buying one which meant we had to put down a deposit and also a further payment within a few weeks.

We used a notary who the vendor provided.

She went through the legal requirements and sorted out the AIP.
The apartment was in shell form when we viewed it so the price was split into 2 parts, the building and then the finishing, ie bathroom fittings, etc

It was agreed the apartment would be complete by the end of May 2008 so we needed the final payment to be made by then.
We could have borrowed money from the HSBC bank here to fund it but decided against that when we realised that there was monthly transaction cost of transferring money from our UK bank account each month and the fluctuating exchange rate of the euro would have seen costs soaring.

So it has been better to raise the money in the UK (by raising a mortgage on our house).

Things to do:-

* Open a bank account in Malta (essential)
* Provide ID and proof of incomes in UK
* Find the best currency exchange rate possible. We used a     currency trading company who could buy the currency for us when it hit a certain exchange rate. This is better than using the bank or high street currency exchanges.
* Read  the contract thoroughly before you sign. We found a major error in ours in the builders favour and that clause had to be re written.
* Make sure that you are here to sign the contract (we had given someone the power of attorney to sign for us if we coudn't be here). As it turned out only one of us could come and that was when the error was discovered in the contract.
* Use a notary who is independent of the vendor so they act in your best interests and not the interests of the vendor.
* Take photos of the property from the time you first put deposit down up to final payment.

Be aware that once you have paid there may be a further payment to the Inland Revenue.

We received a letter from them in December 2009 stating we owed a further 6,000 euros! This was a tax on the what they thought the apartment may be worth over and above what the vendor had stated.

We went to the IR office in Valetta and disputed.

They sent someone out to look at the apartment to value it.
We provided photos of how it was when we had first put our deposit down and how it looked when we took possesion.
This was essential as we had further improved it.
The bill was reduced closer to 2,000 euros, but it had been a bit of a shock to find we had to pay more.

If you buy a new property, sometimes they do not come equipped with a kitchen. This can be expensive if you go to one of the many kitchen showrooms.

We used a recommended carpenter from Gozo. He was brilliant.We discussed what we wanted, he made suggestions, we agreed on a plan, he built it, fitted it and used proper wood (not mdf or chipboard} all properly jointed and at a fraction of the cost of a kitchen from a showroom.

If you find a good tradesman eg plumber, electrician, etc keep hold of them.

Be aware too, that in a new build you may have to buy a water pump and have it fitted, also water heaters. We just assumed we would have running hot and cold water. We were shocked to find we didn't have it so had to get heaters and a pump fitted.

Also bringing goods into the apartment (5 floors up) meant obtaining a local council permit and putting a notice on the road for a lifter to park there to bring the goods up.

We had to find all this stuff out by trial and error,  so hope some  of this info is useful for someone. Feel free to ask any other questions.
Caroline

Caroline that was an absolutley brilliant detailed post...Thanks

Julian

Thanks for your post Caroline

Armand

Hi Caroline, thanks, a great post! I have sent you a pm:D