Hope for tourists
But, as expected, over the past year, the demand for Maltese real estate from non-residents, mainly British and Scandinavians, has decreased. "Despite this," says Paul Hay of the real estate company Malta Homes, –the decline was not as sharp as in other European countries."
At the same time, as Paul Hay says, a lot of people are interested in renting vacation homes for the duration of their holidays. "If we take into account the impact of the global economic crisis, from the point of view of renting housing, the situation in 2009 looks quite stable," the expert says, adding that a good tourist flow plays an important role in this. Thus, Air Malta named the first quarter of 2009 one of the best periods in several years in terms of flight occupancy.
According to James Vassallo, senior manager of the Tigne Point Resort, domestic demand for houses in Malta is surprisingly steady. "Thanks to the recent reduction in interest rates, those who took a wait–and-see attitude at the height of the crisis have been able to conclude very attractive deals," he says.
Although housing prices are still declining in some areas, in others they are already stabilizing, mainly because Maltese people are not as dependent on bank loans as, for example, the British.
Despite the fact that the local real estate market is not expected to take off in the next year or two, the picture is quite favorable in the medium and long term. The growth of the tourist flow and new low-cost flights from Europe, which are being introduced by budget companies, will benefit.
In addition, James Vassallo notes the strategic location of the state between Europe and North Africa, the importance of which is growing from year to year: "It is convenient for those whose business is connected with different regions. Living in the Mediterranean, you can save a lot of time on flights."
Moving: pros and cons
The best rental income – although it will be small, about 4% of the cost of the property per year – will bring housing in cities such as Sliema, St. Julian's, St. Paul's Bay, and in the Maltese capital Valletta.
A non-resident can purchase only one house in Malta. More than one property is allowed to be purchased in special zones such as Tigne Point, Portomaso, Manoel Island, Chambray and Cottoenra. In addition, in these areas, foreign investors are allowed to rent out their property.
One way to circumvent the restrictions for foreigners is to obtain a residence permit in the country, and this is done before buying real estate, not after. "A foreign citizen who has at least 350,000 euros of capital outside the country or has an annual income of about 23,500 euros can obtain permanent resident status in Malta," says Mark Hollingsworth of Hollingsworth International.
Within 12 months after obtaining permanent resident status, a foreigner must either purchase housing (a house is not cheaper than 116,000 euros, an apartment is not cheaper than 69,000 euros), or rent it (for at least 4,150 euros per year). A permanent resident must transfer at least 14,000 euros of annual income to Malta, plus 2,300 euros for each dependent, including spouse. This income remains the property of the resident and can be spent in Malta. But the legislation does not impose requirements for the time of stay of a permanent resident in Malta.
The tax on income received in Malta or transferred to Malta is 15%, with a minimum taxable income of 4,193 euros per year. At the same time, Malta has an agreement on the avoidance of double taxation with more than 40 countries of the world, including Russia. Foreign citizens cannot engage in business activities in Malta.
Most often, foreigners purchase holiday homes in special zones. Such investors cannot complain about the complexity of the purchase process: the system has been worked out, and state legislation ensures the security of the transaction. Real estate transactions are carried out with the help of a notary, and information about the objects and their owners is stored in the State Archive.
So, with the expectation of foreign investors, the Ta’ Monita Residence resort is being built in one of the special zones near the city of Marsascala in the south-east of the country. Marsascala is a popular holiday destination for both locals and foreign tourists. There are many cafes, shops, bars and several good fish restaurants.
Ta’ Monita Residence is a residential complex with an area of 1.6 hectares, including studios, apartments with 1-3 bedrooms and penthouses. The complex has a communal swimming pool and underground parking.
Malta as a destination for buying real estate is unlikely to become as widespread as other Mediterranean countries, however, due to its stability and the unique features of immigration legislation for EU countries, many Russians may find buying real estate on the shores of Malta very attractive.
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