Promise of sale (konvenju) in Malta: buyer's guide
Almost every purchase of a flat, house or plot in Malta starts with a promise of sale, the konvenju. It is not yet a sale: under article 1357 of the Civil Code (Cap. 16) it obliges the seller to sell, and the buyer to buy, on the agreed terms within the agreed period, and makes the party who fails liable in damages. The transfer of ownership happens later, on the final deed, which must be a public deed received by a notary (article 1363).
The promise must be in writing, either a public deed or a private writing (article 1233(1)(a)). It is valid only if notice of it is given to the Commissioner for Revenue, with a provisional payment of twenty per cent of the duty on documents, within twenty-one days (article 3(6) of the Duty on Documents and Transfers Act, Cap. 364, and rule 10 of S.L. 364.06). The promise lapses on the agreed date, or three months after the sale could be made, unless one party starts the procedure in article 1357(2) in time.
This guide is for buyers, including foreigners, and explains what to put in the konvenju, how the deposit and provisional duty work, when a permit under the Immovable Property (Acquisition by Non-residents) Act (Cap. 246) is needed, and what to do if the other side refuses to sign the final deed.
Key facts
Deadline
Notice of the promise to the Commissioner for Revenue within twenty-one days of signing, with provisional duty (rule 10(2) and (4) of S.L. 364.06); any extension notified within twenty-one days (rule 10(5)); to keep the promise alive, a judicial intimation before it expires and a sworn application within thirty days after expiry (article 1357(2) of the Civil Code).
What to do
Agree the essentials before anything is signed. The promise binds once accepted, so settle the price, what is included (garage, airspace, roof, furniture), the deposit, the period of validity and the conditions under which either side may withdraw. Brokerage is shared half and half by seller and buyer unless agreed otherwise (article 1361(2) of the Civil Code), and the default rate for immovables is two per cent (article 1362); the expenses of the sale, including the notary's fees, are borne by the buyer (article 1361(1)).
Instruct your own notary early. The notary checks the seller's title, existing hypothecs and other burdens on the property before the final deed, and will usually draft the promise as well. An agent's draft is not a substitute for that work.
Put the promise in writing with clear conditions. Article 1233(1)(a) requires any agreement implying a promise to transfer or acquire immovable property to be made by public deed or private writing, on pain of nullity. Typical conditions are the bank granting the loan, clean searches on the title, a valid planning permit for the property as built and, for non-residents, the permit under Cap. 246.
Write out what happens if a condition fails: whether the promise falls away, within what time the buyer must say so, and whether the deposit is returned in full. Without such a clause, a buyer who cannot complete may be liable in damages to the seller under article 1357(1).
Decide whether the payment is a deposit or earnest. If the money handed over is earnest, either party may walk away: the buyer forfeits the earnest, or the seller returns double the amount (article 1359 of the Civil Code). A deposit on account of the price, with no earnest clause, keeps both parties bound to complete or pay damages.
State expressly in the konvenju which of the two you mean, and who holds the money until the final deed. Many buyers ask for the deposit to be held by the notary rather than paid to the seller. Keep the bank transfer confirmation and a receipt signed by the seller or the notary.
Make sure the promise is notified and the provisional duty paid. A promise of sale of immovable property is not valid unless notice is given to the Commissioner for Revenue with a provisional payment of twenty per cent of the duty chargeable on the transfer (article 3(6) of Cap. 364). Duty on a transfer of immovable property is, as a rule, five euro for every hundred euro of the price or value, whichever is higher (article 32(1)), so the provisional payment is usually one per cent of the price; reliefs for certain buyers may reduce it.
The notice is made online by a notary or advocate within twenty-one days of the promise (rule 10(1)–(2) and (4) of S.L. 364.06), and the Commissioner rejects late notices. The provisional duty is later set off against the duty due on the final deed (rule 10(6)).
If you are not a resident of Malta, check the Cap. 246 rules. A non-resident person may not acquire immovable property without a permit, and an acquisition in breach is null (article 4 of Cap. 246). Citizens of Malta or another EU Member State who have lived in Malta for a continuous period of five years are residents; EU citizens without five years' residence need a permit only for property for secondary residence purposes, not for their primary residence (articles 2 and 3).
Third-country nationals, unless they hold long-term resident status, need a permit from the Minister responsible for finance unless the property is in a special designated area (article 5(1)(b)). The permit fee is €232.94 (S.L. 246.01), and the deed must be signed within six months of the permit (Second Schedule). Make the permit a condition of the promise.
Keep track of the validity period and any extension. The promise lapses on the date agreed by the parties or, if none was agreed, three months from the day on which the sale could be carried out (article 1357(2)). Bank loans, permits and searches often take longer than expected, so agree an extension in writing before the expiry date if needed.
An extension must also be notified to the Commissioner for Revenue within twenty-one days, through a notary or advocate (rule 10(5) of S.L. 364.06). For duty purposes, where the promise is made for a period not exceeding one year (three years for property bought on plan), the value is normally taken as at the date of the promise, not of the final deed unless improvements are made in between (rule 3(1)(a) of S.L. 364.06).
If the seller refuses to sign the final deed, act before the promise expires. To preserve your rights you must call upon the seller by a judicial intimation filed before the expiry of the promise, and, if he still does not appear, file a sworn application for the carrying out of the promise within thirty days from the expiry (article 1357(2) of the Civil Code). Missing either step lets the promise lapse and leaves only arguments about the deposit.
The court may order the seller to complete the sale; if the sale can no longer be carried out, for example because the property has been sold to someone else, the seller owes damages (article 1357(1)). A warrant of prohibitory injunction may be sought to restrain a sale to a third party while the case is pending (article 873 of Cap. 12).
If you cannot complete, use the conditions and talk early. If a condition in the konvenju has failed, such as a refused loan, notify the seller in writing within the time agreed and ask for the deposit back. If no condition applies, the seller may in turn use article 1357(2) against you, since the rules on promises to sell apply equally to promises to buy (article 1360).
A promise that lapses or that both parties rescind allows the buyer to claim a refund of the provisional duty from the Commissioner for Revenue in writing (rule 10(8) of S.L. 364.06). A written rescission agreement, signed by both parties and stating what happens to the deposit, avoids later disputes.
Sign the final deed and check the duty. The final contract of sale must be a public deed published by a notary, or it is null (article 1363 of the Civil Code). Before signing, ask the notary for a written account of the balance of the price, the remaining duty after setting off the provisional payment, notarial fees and registration costs.
Non-residents must annex the Cap. 246 permit to the deed, and a certified copy of the deed must reach the Commissioner for Revenue within three months (article 6(4) and Second Schedule). Keep the deed and receipts; documents subject to duty must be preserved for at least four years (article 7 of Cap. 364).
What to watch out for
- Signing an agent's standard form without your own notary's review, or with no conditions on the loan, searches and permits.
- Paying the deposit as earnest by mistake. Under article 1359 the seller may then withdraw by returning double, and you lose the right to insist on the sale.
- Letting the twenty-one-day notice to the Commissioner for Revenue pass. A promise that is not notified with provisional duty is not valid (article 3(6) of Cap. 364).
- Forgetting the expiry date. Without a judicial intimation before expiry and a sworn application within thirty days, the promise lapses (article 1357(2)).
- Agreeing an extension orally, or not notifying it within twenty-one days (rule 10(5) of S.L. 364.06).
- A non-resident buying without checking Cap. 246. An acquisition without the required permit is null and the price paid must be returned (article 4).
- Assuming the agent's commission is the seller's cost. By default brokerage is shared half and half (article 1361(2)); settle it in writing.
- Paying the deposit directly to a seller whose title has not yet been checked by the notary.
Legal basis
Frequently asked questions
What is a konvenju in Malta?
It is the promise of sale signed before the final deed. Under article 1357 of the Civil Code it does not transfer ownership but obliges the parties to complete the sale on the agreed terms, and makes the defaulting party liable in damages. It must be in writing (article 1233(1)(a)) and notified to the Commissioner for Revenue.
How much deposit is paid on a promise of sale in Malta?
The law does not fix an amount; it is agreed between the parties. What matters legally is whether the sum is a deposit on account of the price or earnest: earnest allows either party to withdraw, the buyer forfeiting it or the seller returning double (article 1359 of the Civil Code).
How much is provisional duty on a konvenju?
Twenty per cent of the duty that will be due on the transfer (article 3(6) of Cap. 364). With the standard duty of five euro for every hundred euro of the price (article 32(1)), that is usually one per cent of the price, set off later against the duty on the final deed (rule 10(6) of S.L. 364.06).
What is the deadline to register a promise of sale with the Commissioner for Revenue?
Twenty-one days from the date the promise is made, through the Commissioner's online portal by a notary or advocate (rule 10(1)–(2) of S.L. 364.06). The Commissioner will not accept a late notice (rule 10(4)), and without the notice the promise is not valid (article 3(6) of Cap. 364).
How long is a promise of sale valid in Malta?
For the period agreed by the parties. If no period was agreed, the promise lapses three months from the day on which the sale could be carried out (article 1357(2) of the Civil Code). It can be extended by agreement, but the extension must be notified within twenty-one days (rule 10(5) of S.L. 364.06).
Can the seller pull out of a konvenju?
Not freely. A seller who refuses to sign can be called upon by judicial intimation before the promise expires and sued by sworn application within thirty days after expiry (article 1357(2)). The court may order completion or, if the sale is no longer possible, damages. Earnest is the exception: the seller may withdraw by returning double (article 1359).
What happens if my bank loan is refused?
It depends on the konvenju. If it makes the loan a condition and you notify the refusal in time, the promise falls away and the deposit is returned as agreed. Without such a clause the seller may hold you to the promise or claim damages (articles 1357 and 1360 of the Civil Code).
Can foreigners buy property in Malta?
Yes. EU citizens resident in Malta for five continuous years are treated as residents; other EU citizens need a permit only for a secondary residence (article 3 of Cap. 246). Third-country nationals without long-term resident status need a permit from the Minister responsible for finance unless the property is in a special designated area (article 5(1)(b)). Without a required permit the acquisition is null.
Do I get the provisional duty back if the sale falls through?
Yes. A written refund claim may be made once the Commissioner is satisfied that the promise has lapsed or that both parties have rescinded it (rule 10(8) of S.L. 364.06). A rescission agreement signed by both parties is the simplest proof.
Who pays the agent's commission on a property sale in Malta?
Unless agreed otherwise, brokerage is borne by the seller and buyer one-half each (article 1361(2) of the Civil Code), and in the absence of agreement the rate for immovables is two per cent (article 1362). Agents' terms often differ, so put the arrangement in the konvenju.
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