Calling all First-Time Buyers

  • 01.July 2020
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When’s the right time to invest in property? This is certainly a favourite hot topic.

The fallout of the COVID-19 pandemic requires wise financial decision-making. But whichever way you look at it, property is among the surest of investments to make – especially if this is your first major investment.


If you’re in Malta, the upcoming summer period is turning out to be the perfect time to be a first-time buyer on the island.


For prospective homeowners, getting a foot on the property ladder is a daunting task. What helps, though, is that there are schemes and financial incentives available to help you purchase your first home. This puts you – as a first-time buyer – in an advantageous position in the real estate sector in Malta.


Here’s why now’s the time for you to step across the threshold of your first home.


1. The First-Time Buyers’ Scheme



In Malta, we’re lucky that the government has been innovative when it comes to supporting prospective homeowners. And top of the list is its first-time buyers’ initiative.


Since day one, the First-Time Buyers’ Scheme has been a success. And for a couple of good reasons:

·      Buyers purchasing their first property don’t have to pay stamp duty on the first €175,000 of the property’s price.

·      Anything over €175,000 is then applied a stamp duty rate of 5% (although, this has now been further reduced to 1.5% as a post-COVID-19 measure, as explained below).


2. Malta’s Economic Regeneration Plan



On 8 June 2020, the Maltese government announced its Economic Regeneration Plan to relaunch Malta’s economy following the COVID-19 pandemic.


While in lockdown over the past few months, many prospective first-time buyers put their property dreams on hold. Nobody really knew what the financial impact of COVID-19 would be and it was no time for unsure investments.


Malta’s Economic Regeneration Plan can now set people’s minds at ease.


Besides making property purchasing more affordable, the initiative has also made 2020 an opportune time for first-time property investors in Malta.


So, if you’re looking for your first home, listen up.


Taxation on buying and selling property is being reduced until March 2021. For properties worth below €400,000, stamp duty is being reduced from 5% to 1.5%.


What does this mean for first-time buyers? It means you’ll pay no stamp duty on the first €175,000. Then, you’ll pay the reduced rate of 1.5% on any value above €175,000 and below €400,000.


What’s more, even if you’ve already signed a promise of sale, you’ll benefit from these new measures.


And if you’re a seller, you may want to keep your eyes peeled too. Under the new post-Covid19 measures, you’ll benefit from a reduced rate of income tax on the sale of your property – from 8% down to 5%. 


3. The Home Deposit Scheme



If you’ve got your eye on a new house or flat and the First-Time Buyers’ Scheme isn’t incentive enough, the Home Deposit Scheme might be just what you need.


The scheme is another of the Maltese government’s recent initiatives to stimulate the real estate sector in Malta. And it comes in the form of a loan for first-time buyers.


The financial incentive is available to the first 300 successful applicants only – so quick thinking and action is crucial.


Here’s what you need to know:

·      It’s a government loan covering the 10% deposit (or up to €17,500) payable upon signing a promise-of-sale agreement.

·      It’s available to first-time buyers only.

·      To be eligible, the first-time buyer must be between 21 and 39 years old.

·      The loan is repayable over 25 years.


The loan also comes with conditions related to income and marital status. It is open to:

·       Single persons aged between 21 and 30 with a gross income between €19,000 and €25,000.

·       Single persons aged between 31 and 39 with a gross income between €25,000 and €35,000.

·       Couples aged between 21 and 39 with a gross income between €19,000 and €35,000.


Importantly, you need to also consider your capital assets. If they exceed €17,500, then you won’t be eligible for the loan – even if you meet all other assessment criteria.


The Home Deposit Scheme is being made available via two banks in Malta: APS Bank and Bank of Valletta.


4. Advice for First-Time Buyers



Success in real estate hinges on finding the right property – which is especially true if this is your first home.


RE/MAX Malta has developed Malta’s most comprehensive database of for-sale properties in Malta and Gozo. For first-time buyers, this is a great place to start.


With the guidance of our RE/MAX associates, the search for your first home in Malta is made simple. We filter through properties for you (and with you) to make your search easier.


Our agents are trained to bring all factors into the equation so you can avoid as much stress as possible. This includes property features, budget, governmental incentives, upkeep, your daily needs and, of course, location.


We’ll also focus your attention on factors that you may not have considered yet. We can advise you on bank loans, notary’s fees, utility bills and other hidden expenses. Especially as a first-time buyer, we want you to understand the full picture and to feel completely at ease and excited about your first investment in property.


If you’re looking for your first home in Malta or Gozo, get in touch with RE/MAX Malta to learn more about the opportunities open to you.