What Are the Hidden Costs When Buying Property?

Buying property in Malta or Gozo may well be the biggest investment of your life – but it may be more expensive than you realise.

Beyond the price of your new home, there are many other related expenses that may take you by surprise if unprepared.

While your expert RE/MAX agent will guide you according to your circumstances and will help you buy a property for sale in Malta or Gozo, here to take the financial guesswork out of purchasing property is an overview of the hidden costs you can expect along the way – and when in the process you should settle them.

Hidden cost of deposit

How much: at least 10 per cent of the property price.

When settled: at the signing of the preliminary agreement.

How much you will need to pay as a deposit for your new home depends on various factors including your nationality, if it’s your first home loan, or if you plan to rent it out. As a Maltese or EU national buying your first property in Malta, your bank loan will likely cover 90 per cent of the price, leaving you to pay the remaining 10 per cent as your deposit.

When you sign the preliminary agreement (known in Malta as the ‘Konvenju’), you will need to also pay the agent or notary the deposit. Should you fail to complete the final deed without a valid reason, then you forfeit this deposit to the seller.

Architect fees hidden costs

How much: fees vary according to your chosen architect and work required.

When settled: at the signing of the final deed and contract.

You will likely need the services of an architect – your RE/MAX agent can recommend as required – to complete your Malta property purchase.

Apart from carrying out site inspection, research and related correspondence, your architect may also need to track down and fully check permits and plans to ensure they match the building (and foresee any future issues before they arise). They may also be involved in the property checks carried out throughout the Konvenju period. Read more, in greater detail, about how an architect can help you when buying a hot property for sale in Malta.

You settle the architect’s fees and any other related hidden costs when you sign the final deed to your new home.

Bank fees

How much: final amount varies according to your circumstances.

When settled: at the signing of the final deed and contract.

Another type of hidden cost prior to purchasing hot property for sale in Malta involves bank fees. Factors such as the type of bank you choose to finance your home loan, your age, lifestyle, property value and a host of other variables will all affect how much you pay in terms of essentials such as life or home insurance.

There are also bank booking and administration fees to factor in, as well as their charges to process legal fees. 

Again, you should settle any bank-related costs when you sign the final contract.

Stamp duty

How much: five per cent (although latest Government budgetary measures may reduce this).

When settled: one per cent paid at the Konvenju; the remaining at the signing of the final deed.

If you are a first-time buyer, you are normally expected to pay five per cent of the total property value above €150,000 as stamp duty. However, annual government incentives presented in the 2021 budget, often change this figure in your favour: at present, you will only need to pay stamp duty on a property value above €200,000. Buying your first home in Gozo even reduces this percentage to two per cent until the end of 2021.

You should be ready to pay 20 per cent of the five per cent stamp duty (so, one per cent) at the signing of the Konvenju, then the rest when you sign the final deed.

Notary fees

How much: fees vary according to your chosen notary and services rendered.

When settled: at the signing of the final deed and contract.

Hiring a notary public is an essential part of the home-buying process in Malta, so you will need to factor their fees into your budget. Your RE/MAX agent can help you find a reputable and affordable notary.

Your notary will have a range of responsibilities, including answering questions such as who owns the land or related legal proceedings, carrying out searches on the Malta property and checking planning permission and building regulation certificates, as well as ensuring the seller is prepared to transfer the title to your name. They will also forward your stamp duty payment and register the sale with the Public Registry.

You pay the notary fees at the signing of the final deed. Learn more in detail about our guide on the legalities a notary is responsible for when buying property in Malta.

Renovation costs

How much: varies.

When settled: as stipulated by contractors.

When budgeting for your new home, it’s easy to forget extra funds for renovations. Depending on the age and condition of the property, you may need to also cover the cost of new bathrooms, a kitchen, flooring, furniture, plumbing or appliances. Unfortunately, many people buying real estate, especially for the first time, make the common mistake of not planning ahead and dedicating a special budget for these essential furniture types.

The RE/MAX takeaway

Your RE/MAX agent can simplify the process and offer you expert guidance through every stage of your home-buying journey. Visit our priority real estate listings and view the latest Malta and Gozo real estate.

Disclaimer: All information included above is correct at the time of publication. RE/MAX Malta always recommends that clients seek legal and financial advice from a professional.