www.guardianabroad.co.uk
by Saundra Satterlee
Guardian Weekly © Guardian News and Media Limited
2007
Thursday, 23rd August, 2007
Malta is emblazoned on the minds of many as a place of espionage
and intrigue. Loose fictional associations like The Maltese
Falcon, alongside historical intrigues such as the Renaissance
painter Caravaggio fleeing Italy to Malta in 1607 to escape
a murder charge, have served to embellish Malta’s legendary
status.
Island style... buildings in Malta reflect
a varied cultural heritage
The Republic of Malta is a cluster of small
Mediterranean islands 93km from Sicily and 288km from Tunisia.
Its strategic position has made it vulnerable to invasion
and conquest over thousands of years, dating back at least
to Neolithic times. The result has been a fusion of cultures.
Malta can claim to be founded on a kind of
historic – albeit accidental – multi-nationalism.
Its cornucopia of architectural styles spans centuries and
provides a rich historical heritage – one that Hollywood
has tapped for many a feature film, including Gladiator, The
Count of Monte Cristo and Troy.
Country and economy
After Phoenician and Carthaginian conquests
came the Romans and St Paul, whose 60AD shipwreck led to the
introduction of Christianity. The Arabs dominated throughout
the 9th and 10th centuries, followed by Normans and the Aragonese,
among others.
Charles V of Spain gave Malta to the Knights
of the Order of St John of Jerusalem in 1530, who were to
rule for over 250 years, making Malta a player in the cultural
arena of 17th- and 18th-century Europe. En route to Egypt
in 1798, Napoleon wrested Malta from the Knights. Enter Great
Britain; Malta remained part of the British Empire until independence
in 1964.
The Maltese economy is based on foreign trade,
manufacturing and tourism. Malta Freeport is one of the Mediterranean’s
leading ports for container shipments. Low inflation and low
interest rates are trademarks of the economy. The International
Monetary Fund puts per capita income at just over €10,000.
Malta joined the European Union in 2004.
In the lead-up to membership GDP growth faltered, but by 2005
it had recovered to a healthy 3%. In 2005 Malta joined the
Exchange Rate Mechanism, and in January 2008 it will join
the Eurozone. ‘This is another vote of confidence for
the country’s economy. We predict that this will encourage
further inward investment and increased interest in the property
market,’ says Mark Bodega, marketing director at HIFX
Foreign Exchange Specialists.
The market
Over the past 15 years property prices have
risen around 400%. ‘Malta has always had a very strong
local property market with a good amount of foreign purchases.
Over the past year prices have increased by approximately
12.6%,’ says Frank Salt, chairman of Frank Salt Real
Estate, one the country’s oldest agencies.
Well known is the historic fortified capital
city of Valletta, where there are any number of period properties
for sale, from mansions to more modest dwellings. A 16th-century
palace on four floors with 21 rooms in need of restoration
is on offer for 425,000 Maltese liri (€988,000).
More affordable is a recently converted one
bedroom maisonette with high ceilings and lots of original
features – including a traditional wooden ‘Maltese’
balcony. Fitted with all the mod cons, available from Propertyline
Malta for €116,000.
Window on the world... Inland views can
be just as interesting
as sea views, and cheaper Photo: Frank Salt
Nearby at Ta' Xbiex, in the Blue Harbour
development facing Valletta, Coldwell Banker are selling a
three bedroom modern apartment with floor-to-ceiling windows
and harbour views for €699,000.
Salt has identified three new hotspot developments
in St Julians and Sliema, both popular destinations for foreign
nationals. Portomaso Marina and Pender Place in St Julians,
and Fort Cambridge in Sliema. ‘The current prices for
one to three bedroom apartments in these developments range
from €186,000 to over €2m,’ says Salt. At
Portomaso, an air-conditioned three bedroom, fully furnished
and highly finished penthouse with terraces overlooking the
marina is on the market for €2m (through Frank Salt)
– while a one bedroom apartment with inland views is
available for €298,000.
The so-called ‘Three Cities’
of Cospicua, Sengea and Vittoriosa (aka Birgu) are collectively
known as ‘Cottonera’. ‘Once an overlooked
area where properties were cheap, Cottonera is now on the
up – especially Vittoriosa where we have period properties
starting from €186,000,’ says Euan Phillips, manager
at Propertyline Malta.
Marsaxlokk is a picturesque fishing village
that many claim is the last traditional fishing community
on the island. There, a terraced seafront house on four floors
with three bedrooms, roof terrace and four-car garage is on
offer from Propertyline Malta for €442,000.
On the smaller island of Gozo, which has
long been popular as a tourist destination, you’ll find
fewer palaces for sale and more farmhouses. ‘On the
whole, Gozo is rural and quiet with properties a bit cheaper
than in Malta,’ says Salt.
Pitfalls and practicalities
While anyone in the world can purchase Maltese
property, there are certain restrictions regarding location
and the number of properties that may be bought. The Acquisition
of Immovable Property (AIP) permit is normally required for
the purchase of property by non-EU citizens. The administrative
cost of an AIP is €233.
EU citizens who have resided in Malta for
five years in a rented property don’t need an AIP, but
all other EU citizens do. Or, for EU citizens only, if the
property is to be the buyer’s main and permanent residence
– not a holiday home – the AIP is waived.
However, the purchase of property in what
is termed a ‘special designated area’ (Portomaso,
for example) does not typically require an AIP for any nationality.
Furthermore, more than one property may be acquired. See the
Ministry of Finance website for more details.
When it comes to purchase costs, Salt explains
that buyers are expected to pay approximately 6% of the purchase
price – that is, 5% for stamp duty and 1% for notary
fees. Malta is a low tax regime, which means no inheritance
tax and a 15% income tax rate for residents.
With the adoption of the euro, some predict
a surge in property prices. The jury is still out, but whatever
else happens, as reported in the Economist, the euro will
eliminate the cost of swapping into and out of a currency
used nowhere else. On a practical level this will mean a saving
for those who purchase property in euros.
Malta is three hours by aeroplane from Lisbon
or London, two-and-a-half from Munich and Paris, and one-and-a-half
from Rome. Recently introduced budget flights from Europe
make getting there more affordable than ever. Useful information
can be found on the government tourism portal, Visit Malta.
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