Promise of Sale Agreement
Once apartments in Malta have been chosen a “promise of sale” agreement is drawn up by a notary and signed by both the buyer and the seller of the property.
The “Promise of Sale” agreement will specify the following terms:
• The property being purchased
• The price to be paid
• The payment terms
• The duration of the “Promise of Sale” agreement, specifying when the final deed of sale may be signed.
• The specifications of the finishes of the relative property being purchased.
• Any particular conditions agreed with the seller.
The buyer, seller and the property being sold are all clearly identified in the “Promise of Sale” agreement. The notary is obliged to register this agreement with the Maltese Inland Revenue department and forward a payment equal to 1% of the sale price by way of provisional duty. This will be set off against the total duty (max 5%) that must be paid when the final deed of sale is signed. If the sale falls through, all stamp duties will be refunded.
Once the “Promise of Sale” agreement is signed, the buyer must pay a deposit amounting to 15% of the sale price.
A second payment amounting to 20% of the sale price is to be paid within 15 days from the issuance of an architect’s certificate confirming the completion of the shell construction of the apartment being purchased.
The outstanding balance is paid in full in conjunction with the signing of the Final Deed. Once payment is received the buyer is given the keys to the property.
If the property in Malta is being purchased by means of a bank loan then the deed must be signed at the bank’s offices.
Upon completion, the notary is obliged to immediately register the deed at the Maltese Public Registry.
The 1% provisional duty paid when the “Promise of Sale” agreement was signed is deducted from the total stamp duty due on the signing of the Final Deed.
Failure of Payment
Should the buyer fail to sign the final deed of sale without having a valid reason at law for doing so, then the buyer forfeits all deposits paid.