What are the expenses involved in buying a home?
Buying a home is a big decision that involves much more than just finding a house and agreeing a price. In fact, the asking price of the property is only one of many expenses you will face during the property acquisition process. In order for you to remain in control of the home buying process and to fulfil our obligation as a responsible lender, we thought we would outline the main expenses buying a home entails.
Buying costs of property in Malta
We would advise any property buyer to add at least 8% of the purchase price in top to cover all those things you need to pay for during the process. Once you have found a property and have agreed on the preliminary agreement, or ‘konvenju’, you’re obliged to pay 1% of the stamp duty and 10% of the agreed purchase price as deposit. Stamp duty is calculated on a sliding scale depending on the purchase price. For properties up to €150,000 the duty is 3.5% if the property is to be your main home. That rises to 5% should the property be your second home, if you’re not a Malta resident, or the price exceeds the €150,000 amount.
Currently the government is running a first-time buyers incentive that waives stamp duty for properties up to €150,000. Buy a property within the time limit and you pay no stamp duty at all!
As well as stamp duty, you will also be liable for notary fees. These pay for the public official who presides over the sale and who performs your searches, checks the buyers and sellers and liaises with the lenders. Their fees are generally between 1.5% and 2.5%. This is payable in two stages, one third on signing the Konvenju and the remainder once the final deed of sale is published.
Notary fees are managed by Notarial Council Guidelines and not by the notary themselves. If you borrow from someone other than APS Bank, you may also be liable for arrangement and legal fees for the mortgage. We don’t charge for this service, so be aware of this extra cost when you’re shopping around. It’s important that as a potential new homeowner you’re completely aware of the potential extra costs over and above the price of the property itself. The figure we quoted earlier of around 8% of the purchase price should be quite accurate and it would be a good idea to factor this into your budget during your search.
If you need any advice or want to talk to us about a home loan, contact us today. We’re here to help.