Europe

In June 1990 Malta formally applied for European Union membership. The application was frozen by the Maltese government in 1996 but was re-activated two years later. Months of intense negotiations followed with Malta managing to obtain a tailor made package due to its size limitations.

March 2003 saw the Maltese and Gozitan people polling in the referendum with nearly 54 per cent giving the go-ahead to membership. Malta joined Slovakia, Lithuania, Slovenia, Hungary, Poland, Czech Republic, Latvia, Estonia and Cyprus to sign the accession treaty in Athens. Thousands partied in the streets amid a forest of blue and yellow starred flags.

This section compares what the conditions and restrictions to buying property in the Maltese Islands were before Malta joined the E.U. and what changed after the conclusion of negotiations.

By joining the EU, a country accepts to adopt and apply the rules of the club.  Exceptionally, the EU agrees that certain rules can be adopted over a longer period of time after membership, known as transitional period, provided that this is limited in time and in scope.

Malta's concern was that if the right of EU citizens to buy property in Malta after membership leads to an increase in demand for property in Malta, this could affect the price of property and therefore have a negative social impact on Maltese families, especially on young couples.  Of course housing affordability in Malta is not only affected by EU membership since property prices in our country have long been going up.  However, Malta's concern was that EU membership should not add to the problem by making housing in our country even less affordable.

This concern is not just real.  It is also permanent in nature because, if anything, should a problem arise, it would be greater in the future than at present, affecting our children more that it would affect us.  This is why a transitional period was not sufficient for Malta.  Only a permanent agreement was acceptable. 

Under the Immovable Property (Acquisition by Non-Residents) Act 1974, foreigners can buy property in Malta, typically for use as a holiday home and therefore as a secondary residence.  To do so a permit is required and is granted for only one property and is subject to qualifications such as the value of the property.  No permit is granted for a second property.

Here is the main outcome of the negotiations:

EU citizens seeking to buy a secondary house in Malta will still require to apply for the AIP permit (the permit required by non-Maltese to buy property on the islands) and satisfy the conditions.  One of the conditions is that the value of the property must exceed Lm30,000 in the case of an apartment and Lm50,000 in the case of a house.  They will not be entitled to buy more than one property, unless they have resided in Malta for at least five years.

On the other hand EU citizens who want to buy property as a residence can do so without needing to apply for authorization.   The value thresholds will not apply in this case.  Further property can be bought only once the person has resided in Malta for five years or more.

Non-EU citizens will still need to apply for the AIP permit and satisfy all the existing conditions including that of the value thresholds.  They can only ever buy one property on the Maltese Islands even if they have resided here for more than five years.  This means that all the restrictions imposed before EU membership still apply today, however, these cannot be increased. 

Maltese migrants

Maltese citizens who return to Malta after having emigrated to any other country, whether in the EU or not, retain all the full rights to buy as much property in Malta as they want.  For clearly they would have resided in Malta for five years before leaving the country and this five year period remains sufficient even if they return after several years.  Therefore these Maltese citizens do not lose any rights.

Furthermore, Maltese citizens who are emigrated can continue to buy property in Malta and Gozo without any restrictions even if they are residing permanently abroad and do not intend to come back to Malta.

On the other hand, children of Maltese migrants who have never lived in Malta and acquired a Maltese nationality can buy a first property here without the need for authorization, only if they intend to live here permanently.  They can buy a first property to use as a holiday home while they are still abroad but in this case will require a permit.  They also cannot buy more than one property unless they have resided here for five years.