Buying Your First Property in Malta? Start With Your Budget
Buying a home in Malta isn’t just about scrolling through listings and falling in love with balconies and marble stairs. The real journey begins before all that – with your wallet.
If you’re a first-time buyer, Chapter 1 of your homeownership journey is all about understanding what you can actually afford.
So before you start dreaming about rooftop BBQs in Mosta or seaview apartments in St Paul’s Bay, here’s your guide to sorting your finances.
Financial Planning, Loans, and Incentives
Buying your first property in Malta can feel overwhelming, especially if you’ve never navigated the process before. From understanding your finances to exploring government incentives, there are several steps to consider before signing a contract.
This guide is designed for first-time buyers and beginners. It explains how to assess your budget, apply for a loan, and take advantage of government schemes.
Step 1: Understanding Your Finances and Setting a Budget
Before browsing properties, it’s important to get a clear picture of your financial situation. This will help you set a realistic budget and know what you can afford.
- Assess your savings
Ask yourself: How much have I saved? Even if you haven’t started yet, it’s never too late. Savings will cover your 10% deposit, usually required when signing the promise of sale (konvenju).
- Review your current expenses
Track existing commitments such as car loans, insurance, or other debts. The lower your expenses, the higher your potential loan amount.
- Plan for additional costs
Buying a property involves more than the price itself. Include:
- Deposit – around 10% of the property price
- Notary fees – for legal checks and deed preparation
- Stamp duty – government tax, often 5% of property value. These can be confirmed with your notary.
- Architect fees – surveys or valuations
- Bank charges – processing or booking fees
- Home and life insurance – usually required by lenders
Step 2: Exploring Loan Options and Eligibility
Once your finances are clear, it’s time to explore bank loans. Different banks offer varying terms, so it’s essential to compare multiple options. Loans generally cover 90% of the property value, with the 10% deposit coming from your own funds.
Factors that influence your loan
| Factor | What it means |
|---|---|
| Income | Gross, stable earnings determine how much you can borrow. |
| Age | Affects loan term length and maximum tenure. |
| Current expenses | Existing monthly commitments reduce affordability. |
| Credit score | Stronger credit history can unlock better rates and smoother approval. |
| Job stability | Permanent roles and longer employment tenure are viewed as lower risk. |
| Other debts | Loans, credit cards, and obligations lower your loan limit. |
💡 Tip: If you don’t have the 10% deposit, the Housing Authority’s 10% Deposit Payment Scheme may help (subject to eligibility). See the official details on the Housing Authority website, and read our explainer here: First-Time Buyer Grant in Malta: €10,000 Scheme Explained
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Step 3: How to Compare Different Loan Offers
After visiting banks, it’s important to evaluate your loan options carefully. Key points to consider:
| What to compare | What to look for |
|---|---|
| Amount lent | The maximum the bank will finance. Check if it covers price plus any finishing costs. |
| Interest rate | Compare fixed vs variable. Note the initial rate, revision period, and caps. |
| Monthly repayments | Ensure the payment fits your budget at today’s rate and with +1–2% stress. |
| Fees | Processing, booking, commitment, legal, valuation. Add them to the total cost. |
| APRC | Annual Percentage Rate of Charge reflects rate plus fees. Lower is generally cheaper overall. |
| Total repayment | Sum of all payments over the term from the amortisation table. Use it to compare lifetime cost. |
💡 Tip: If buying a property under construction or needing finishing, the bank may include finishing costs in the loan. Some banks also offer a personal loan for extra expenses like furniture.
Step 4: Checking Your Loan Eligibility
There are several ways to determine your loan eligibility:
- In Person
Book a bank appointment to receive personalised guidance and official figures.
- Online Calculator
Many banks provide a quick estimate, but it’s not final. An in-person visit provides an official quotation including all loan details.
- Virtual Meeting
Some banks offer online consultations, which also require booking in advance.
Step 5: Documents You’ll Need for a Bank Appointment
Bring the following to ensure the bank can assess your loan accurately:
| Document | What it is |
|---|---|
| Payslips | Recent salary slips to verify income. |
| FS3 Forms | Annual statement for public employees used to confirm earnings and tax. |
| ID / Residence Card | Official identification to verify identity and residency status. |
| Other financial commitments | Details of loans, credit cards, and debts to assess affordability. |
| Tax Returns | Required if self-employed to evidence income. |
💡 Tip: To include overtime as part of your income, banks typically require up to 12 payslips and the FS3. Requirements may vary between banks, so call ahead to confirm.
Step 6: Government Schemes to Help First-Time Buyers
The Maltese government provides programs to boost your purchasing power:
Equity Sharing Scheme
- For 30+ year olds who need additional funding
- Housing Authority provides up to 50% of property value, interest-free repayment after 20 years
- Maximum property value: €250,000
More information through the link here
10% Deposit Payment Scheme
- For 21–39 year olds lacking a 10% deposit
- Property value up to €225,000
- Deposit provided via a personal loan, repayable over 25 years, with the Housing Authority covering interest payments
More information through the link here
Social Loan Scheme
- Supports low-income earners with grants up to €167/month for repayments
- Property value must not exceed €140,000, with notarial fees covered
- Total assets must not exceed €23,300
More information through the link here
Step 7: Tax Incentives and Reliefs in Malta
First-Time Buyers Stamp Duty Exemption
- Exempt from stamp duty on the first €200,000
- Must declare the property is your first immovable property
- Notary verifies but is not responsible for false declarations
Relief from Income Tax and Duty on Documents and Transfers
Exemptions on the first €750,000 of property value for:
- Properties in Urban Conservation Areas (UCA)
- Properties built >20 years ago and vacant >7 years
- New properties built according to guidelines
- Required documentation must be provided to the notary (e.g., UCA certificate)
Summary
Purchasing a property in Malta involves planning your finances, understanding loan options, and leveraging government schemes to boost affordability.
If you found this guide useful, share it, or contact a licensed professional in Malta for personalised advice.
Property Portfolio is here to provide multiple listings from multiple agencies, helping to simplify the property market for you.
Ready for the Next Step?
Once your budget is in place, it’s time to build your property wish list, which we’ll cover in the next blog.
Until then, follow Property Portfolio for tips, listings, and the latest updates on property schemes in Malta.
This article is for general information only and does not constitute legal, tax, or financial advice. Always consult a licensed professional in Malta for your specific situation.
