Qualifying Property

    Q1. Do Applicants need to own/lease property at application stage?

    No. The Applicant has to own/lease property and submit the relevant documentation after receiving the Letter of Approval in Principle. However, a property that would have been leased/purchased before the application submission and which satisfies the rules found in L.N.288 of 2015 regarding the Qualifying Property, is still acceptable.

    Q2. Can the Beneficiary sell or stop leasing the declared qualifying property during the first five years and replace it with another qualifying property?

    Yes, during the first five years the Beneficiary can sell the qualifying property and buy/lease a new property as long as he continuously satisfies the qualifying property conditions. There MUST be no gaps between the end date of the previous lease/ownership and the new lease/ownership. He would have to inform the RAP/RAA who in turn should inform MRVA. A certified true copy of the purchase/lease agreement of the new qualifying property has to be submitted to MRVA as evidence.

    Q3. Would the Beneficiary have to commit himself not to sell the property for the first five years if he decides to purchase a property? How would this be monitored in practice?

    No the Beneficiary does not have to commit himself not to sell the qualifying property. This can be sold as long as it is replaced by another qualifying property. The monitoring happens on an annual basis for the first 5 years through the submission of a Form MRVP5 – Official Compliance Form, which is to be signed by the Beneficiary and the RAP/RAA and submitted by the RAP/RAA to MRVA. After the first five years, monitoring will happen once every five years.

    Q4. Would purchasing a number of rooms in a hotel and owning these for a period of 5 years, naturally without anyone else having access to the rooms in the meantime, qualify?

    No, these are not accepted as a Qualifying Property. The Main Applicant must lease or purchase a residential property.

    Q5. A client explained that he has just bought a property in the South of Malta for circa €190,000 and will be spending a minimum of €100,000 (arising outside Malta) on it – therefore the total cost to him will be in excess of the €270,000 required for a property in the South. Will this be considered to satisfy property investment?

    If the purchase of the property has happened after L.N.288 of 2015 came into force, the determining factor is the value of the property as declared on the contract of sale. Therefore, the said scenario does not satisfy the Qualifying Investment criteria.

    If, on the other hand, the property had been bought PRIOR to the date of coming into force of L.N.288 of 2015, the following prevails:

    “Provided that an immovable property purchased before the date of coming into force of these regulations for a consideration which is less than the amounts indicated in paragraphs (a) or (b) above shall be considered to be “qualifying owned property” insofar as the value of such immovable property, as declared on the date of application by the Applicant, is not less than the amounts indicated in paragraphs (a) or (b) above as supported by a separate and independent architect valuation including architect’s plan which are delivered to Identity Malta Agency upon application: Provided further that Identity Malta Agency, or any officer authorized by it in writing, architect or surveyor shall have full and free access to the qualifying owned property to the extent that such access is likely to assist him in determining the value of the said property;”

    Therefore, the value must be met at the date when the application is submitted and not after the Letter of Approval in Principle is issued.

    Q6. Would an Acquisition of Immovable Property (AIP) permit be required for a non-EU citizen who is applying under this Programme if the property is not in a ‘special designated area’?

    Yes, the acquisition of immovable property permit is still required.

    Q7. Would the minimum property requirements no longer apply, after a qualifying property has been held for the first 5 years?

    The Beneficiary is not obliged to retain possession of the Qualifying Property stipulated in the respective legal notice. However, to retain residence he must provide a suitable residential address.

    Q8. Is it possible for the Main Applicant to first rent and then buy a property?

    Yes, it is possible, as long as the qualifying criteria are satisfied in both cases.

    Q9. Can the Applicant take a loan to buy the Qualifying Property?

    This is at the discretion of the Bank.

    Q10. During application stage Applicant undertakes to fulfill the obligation to buy or rent the property in Malta together with the investment obligation. Is an affidavit enough or do you need a promise of sale/rent agreement?

    The declaration is part of form MRVP1, which needs to be signed before a Commissioner for Oaths.

    Q11. It is quite normal for property to be co-owned by the Main Applicant and his/her spouse, children and sometimes grandparents. Would this be accepted as evidence of the €500,000 capital?

    Co-ownership is acceptable. However, as regards the €500,000 capital assets for the qualifying criteria purposes, only the portion of the evaluation value that pertains to the Main Applicant, and if part of the initial application that portion pertaining to the Spouse and the children where applicable.

     

    For any other questions that are not covered here, please contact us on info@nexiabt.com.

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