Things to Know
When property is sold, inherited, or financed by a bank loan in Malta, the law requires specific documentation prepared and signed by a warranted architect.
Taxes
Inheritance (Causa Mortis Transfers)
When inheriting property in Malta, heirs must file a Causa Mortis declaration with the Commissioner for Revenue within one year of the date of death. This declaration must be accompanied by an architect’s valuation report and Land Registry plan.
Standard Rate (5%): 5% duty on the value of the inherited property (Duty on Documents and Transfers Act, Cap. 364).
Reduced Rate (3.5%): If the heir does not own another property and will use the inherited property as their sole ordinary residence.
Exemption (0%): If the heir already resided in the inherited property as their main home at the time of inheritance, no duty is charged on that property.
Seller’s Tax (Sale of Property)
When selling property, owners are generally taxed at 8% of the declared transfer value (Income Tax Act, Cap. 123).
An architect’s valuation ensures that the declared value reflects the real market value, preventing under-declaration and ensuring tax compliance.
Why valuations are required
The authorities require valuations to confirm that declared values are consistent with market values. This ensures fairness and prevents undeclared financial transactions.
Legal Requirements
Valuation Report
A certified report stating the current market value of the property. Needed for inheritance, sales, and bank financing.
Land Registry Plan
Required by the Land Registration Act (Cap. 296), this official plan defines the exact boundaries of the property on government records.
This is essential to establish precise ownership and avoid disputes.
Schedule 8 Form
Mandated by the Civil Code (Cap. 16), this descriptive form provides official details of the property being transferred.
Bank Loan Valuation Form (optional)
Required by banks when a property purchase is financed by a mortgage. Confirms property value and compliance with planning permits before loan approval.
Regularisation
Some properties contain minor planning irregularities (for example, small extensions, balcony changes, or internal alterations). In such cases, The Planning Authority Regularisation Scheme (Legal Notice 285 of 2016, as amended) allows owners to legalise these irregularities. Regularisation ensures the property is fully compliant with planning law, making it transferable and acceptable for banks and notaries.
Without regularisation, transfers may be blocked or financing refused.
TERRA can assist in preparing and filing regularisation applications alongside your property transfer documents.