Buying property in Malta is no small event. Finding suitable real estate, communicating and negotiating with a seller, and finally settling on a deal that both parties find acceptable can take a great deal of time and requires patience and perseverance on the part of the buyer. Unfortunately, many aspects of buying Maltese property can be confusing, and the terms used in such sales are often unfamiliar. Such may be the case with the Promise of Sale agreement used in property sales in Malta. Thankfully, fully understanding this aspect of a purchase takes only a few minutes reading to grasp.
What the Maltese refer to as a Promise of Sale agreement is often simply called a sales agreement in other countries. Rather than being some confusing document that requires buyers to sign away their lives, Promise of Sale agreements simply set the terms of a property transaction. They should include all important deals related to the transaction – who is buying what from whom, when, and at what price.
That being said, there are a few specifics that buyers and sellers should both be aware of before entering into a contract and crafting a Promise of Sale agreement. Buyers must pay provisional duties on the sale price of the property as the process enters the final steps towards sale. This begins with the presentation of the agreement to the Capital Transfer Duty Department of Malta within 21 days of the signing of the agreement, at which time the buyer must pay a duty of 1% of the market price . Once the contract has actually been signed by all involved parties, the agreement is reviewed to establish the market value of the property. Following the assessment, the buyer may have to pay further duties on the property, typically up to 5% of the market value of the real estate.
Promise of Sale agreements are not complicated contracts, but rather simple documents outlining the basics of the sale of any piece of real estate in Malta. By understanding the basics of such a contract, a buyer arms him or herself with the information necessary to make a wise purchase.
