In recent years Malta has witnessed an increase in the demand for property for commercial and residential purposes. Several factors have induced this boom, including Malta’s favourable climate, crime-free environment and English-speaking population, EU-membership, business and trade incentives, low taxation and low costs.
We appreciate the intricacies which are involved in the acquisition of property. Our team offers a comprehensive service to foreigners who wish to acquire property in Malta and, possibly, to obtain a residence permit. Permanent residency schemes have become particularly attractive to high-net worth individuals from all over the world. This is a highly financially beneficial scheme due to particular tax arrangements, subject to the fulfilment of certain requirements.
Property
Acquisition of immovable property in Malta by foreign residents is regulated by special laws due to the limited land available for construction. In relation to the European Union, this means that EU citizens seeking to buy a secondary house in Malta will have to apply for authorisation and may only do so if they have lived in the island for at least five years. In the case of non-EU citizens, authorisation is always required.
Our firm possesses the facility of a one-stop shop in the field of property conveyance in that we provide a comprehensive service of consultation, drafting, review and negotiation of preliminary agreements and deeds of sale/purchase of property in Malta and Gozo. In this area GTG:
GTG also provides a full legal service in connection with the negotiation, drafting and review of lease agreements. We pride in acting for the utmost benefit of our clients to ensure maximum protection of their rights and to minimise the possibility of any problems arising during the actual lease.
GTG keeps itself up to date with all developments in planning law, including circulars issued to architects by the Malta Environment and Planning Authority, to be able to furnish its clients with the latest policy and design guidelines.
Residence
GTG advises clients on all the possibilities at law and assists in the application for residency and obtaining requisite permits. In this regard, the firm also advises on the opportunities offered by the applicable double tax treaties as relevant to the clients' particular needs.
Permanent Residence
Foreigners can benefit from a number of beneficial incentives if they qualify for a Malta Residence Permit.
There is clearly a favourable tax treatment for qualifying persons. Subject to a minimum annual tax liability of EUR 4,150, a flat tax rate of 15% is charged to all income received in, or remitted to Malta, irrespective of the source. Furthermore, capital gains remitted to Malta are exempt from tax.
Apart from being exempt from paying VAT and customs duty on the importation of personal effects and other domestic articles, Permanent Residents can freely repatriate into Malta proceeds from the sale of property, other investments, local income and excess income brought into Malta provided that any tax due has been settled.
How to qualify?
Any foreigner, whether an EU/EEA citizen or a third country national, may submit an application for a permanent residence permit provided the capital or annual income conditions are satisfied in accordance with the Residents Scheme Regulations. Unless authorised by the competent authorities, no employment or engagement in business in Malta may be undertaken by permanent residence permit holders. This scheme is in fact mostly directed towards retired persons and semi-retired persons with business abroad who want to take advantage of the tax benefits exclusive to the scheme.
In order to qualify for pemanent residence, an applicant is required to:
- provide documentary proof that he can bring into Malta an annual income of not less than EUR 13,950 in his respect and a further EUR 2,300 in respect of each dependant, provided that in determining the amount of the annual income brought into Malta no consideration whatsoever shall be taken of any income which is retransferred out of Malta; and
- provide documentary proof that from the date of the application onwards he has either an annual income of not less than EUR 23,000 arising outside Malta or has in his possession a capital of not less than EUR 349,000.
In addition an applicant must:
- take up residence in Malta within twelve months of the date of issue of the certificate; and
produce evidence that within twelve months of taking up residence in Malta that he has purchased a flat at a cost of not less than EUR 69,000 or a house of not less than EUR 116,000 or taken on a leased immovable property at not less than EUR 4,150 per annum.
|
