Malta is a historical mixture of European and Arabic cultures. Its uniqueness can be seen in every area of the life of the Maltese, even in such a mundane matter as the maintenance of residential real estate.
The house may not have a number but have a name instead. Utility bills come in irregularly. Insurance can cover special cases: for example, damage from a plane crash on a house or compensation for a burnt tree in the yard.
Buying property in Malta is a profitable investment. Residential real estate costs usually increase by 3—6% per year.
The investor can obtain permanent residence when buying properties for more than €300,000. When investing €700,000+ in real estate, they can apply for citizenship by naturalisation for exceptional services by direct investment in 1—3 years of living in the country. In addition, the investor pays a non-refundable contribution, state duties, and fees.
Real estate tax in Malta
Ground Rent is paid once a year. The sum depends on the area size and location and ranges between €40 and €250.
If the house owner wants to buy the land, they pay 20 tax rates at once. The next buyer will pay not only for the building but for the land as well.
Insurance of residential property in Malta
There are no requirements for having residential property insurance in Malta, but owners often decide to obtain one. The estimated insurance cost for a two-bedroom apartment is up to €300 per year and about €700 for a villa.
Usually, residential property insurance in Malta covers the following:
- renovations after leaks or fires;
- the cost of damaged property like furniture, household appliances and alarms;
- responsibility to neighbours;
- smoke damage.
Some insurances additionally cover special cases, for example:
- accidental loss of valuables within the apartment;
- damage to the building by the owner of the apartment;
- emergency services, such as emergency medical care if the apartment and residents were damaged by fire;
- moral damage from the termination of television and radio broadcasting due to an emergency;
- damage to a tree by a lightning strike: Malta has no natural sources of fresh water, so a tree in the yard is of great value.
The conditions in a standard contract depend on the company and can differ drastically from one insurer to another.
Cost of public utilities in Malta
Malta has no hot water supply, central heating, or domestic gas network. Therefore, people use electricity for heating water in the tank, cooking, and heating rooms with the help of air conditioners and heaters. From May to November, heating is usually not required, but electricity is used to run air conditioners.
Water and electricity cost about €100—200 per month and are paid by meters.
Meters are usually located in a common basement. Employees of the Automated Revenue Management Services take the readings.
Peculiarities of the Maltese water supply:
- water is desalinated in Malta, so Maltese usually don’t drink it from the tap — it is chlorinated and tasteless;
- due to interruptions in the water supply, each apartment has its own reserve — a 500-litre tank on the roof. In case of problems, residents will not be left without water.
Bills are paid on the utility company's website. Every 2—3 months, the property owner receives an invoice with an average figure. A corrective notice is received every six months based on the audit results. Residents are notified of the inspection.
You have 15 days to pay the invoice, but you can pay for services within 45 days without penalty. Some property owners trust the management company to pay utility bills.
The work and renovation of the elevator and the pool, cleaning, renovation of the house, and security are paid for by the tenants. The housing committee or management company plans expenses, collects money, and directs the work.
Foreigners usually buy properties in Special Designated Areas (SDA). They have simplified purchase rules.
Management companies maintain SDA complexes. Bills from them include services for about €500—1,000 per month for the owner of one apartment.
Gas. Residents of modern residential complexes cook with electricity. If gas is needed, it is bought in cylinders. A cylinder weighing 15 kg costs about €20, which is enough for 2—3 months of cooking for two people.
Garbage is taken out at the state's expense, and the apartment owner does not need to pay anything. At the same time, Malta has rules that must be studied in advance. They can be found in the housing committee or the management company.
Residents are required to comply with the following rules for garbage disposal:
- Sort waste into three categories: plastic and paper for recycling, organics, and everything else, except for glass.
- Glass garbage is collected once a month; bottles are put in cardboard boxes.
- Hazardous garbage or waste that requires deep processing, such as chemicals and batteries, must be taken to the nearest special service.
- You can take out the trash every day except Sunday, although sometimes the trash is picked up once a week. Waste is taken outside in bags not earlier than an hour before the arrival of the garbage collector. Near the houses, there are no garbage containers. You can be fined if a waste package waits for a garbage collector for over a day.
- The removal of bulky waste is also regulated: you need to wait until a special container arrives. You can not take out an old chair or tires with the usual trash bag.
Internet is usually bought as part of a package tariff for a family. For €50—100 per month, two or three family members receive unlimited cellular services, mobile and home Internet, and television. If you buy several tariffs separately, the cellular Internet connection costs about €20 per person, and the home Internet costs about €30.
Three telecommunications providers are operating in Malta: Melita, Vodafone, and GO. You can find information on tariffs on the Maltese websites of companies.
Example of the property maintenance cost in Malta
Let's compare the expenses of the property owner for the two options:
- an apartment for €310,000, upon purchase of which you can get Malta permanent residence;
- an apartment for €740,000, which allow you to apply for Malta citizenship by naturalisation for exceptional services by direct investment.
The calculations use average figures. For example, the services of a management company may exceed the calculated values by 1.5—2 times, depending on the size of the adjacent territory, and the scale of landscaping. A garden or swimming pool also increases the real estate maintenance cost in Malta.
The insurance cost depends on the set of offered services and the insurance company itself; it can exceed the number in the table several times. The property owner decides what services he needs.
Owner’s expenses on a property in Malta per year
| Type of expenses | Apartment for €310,000 | Apartment for €740,000 |
| Land tax | €200 | €250 |
| Energy Efficiency Certificate for 10 years | €300 | €350 |
| Water and electricity | €2,400 | €2,800 |
| Telecommunication services | €1,200 | €1,200 |
| Accounts from the management company | €9,600 | €12,000 |
| Insurance | €700 | €900 |
| Total | €14,400 | €17,500 |
Landlord expenses: taxes, fees, and realtor services
In Malta, renting out real estate is profitable as housing is in demand all year round. The country is popular with tourists. Besides, there are language schools, branches of well-known educational institutions, and large international companies.
Renting a one-bedroom apartment in a large city, such as Sliema, on the second line from the sea, usually costs about €10,000—12,000 annually. On average, renting out apartments brings 4 to 7% per annum.
The tenant immediately deposits the amount of two monthly payments. In addition to rent, they usually pay utility bills. The exception is if the renting is short-term: in this case, the landlord can pay utility bills themselves, but these costs will be included in the rental price.
Taxes. Rental income is taxed on a progressive scale from 0 to 35% or at a flat rate of 15% — the landlord chooses the appropriate option. At the same time, tax deductions can be applied to progressive income tax but not to a reduced rate of 15%.
The landlord submits an application on the tax office's website to use a flat tax rate on the rental income. If the owner rents out several properties, the reduced tax will apply to all of them — it will not be possible to pay tax on rental income at different rates.
Agent services. Investors often rent out properties through agencies. Their services cost about half the rental income and 18% VAT.
Energy Efficiency Certificate. When concluding a lease agreement, you must present an Energy Efficiency Certificate of the building. The certificate indicates the assessment on a scale from A to G and recommends improving it.
The certificate costs €200 to €500 and is valid for 10 years. The owner obtains it from an appraiser registered with the Building Regulation Office. If the owner doesn't provide the certificate when signing any real estate agreement, including a lease agreement, they may be fined €500—€5,000.
Igor Buglo
Head of the Maltese office, MBA
How to pay taxes in Malta
Property tax and stamp duty are paid only once — upon buying a property. 1% stamp duty is paid after signing a preliminary sale and purchase contract, and the remaining 4% — upon drawing up the deed of property transfer. The property tax is also paid when signing the contract.
The taxes on rental income are paid every year. The tax year ends on December 31st.
The payment can be made via the Internet with the help of the online payment system or Internet banking. Another way to pay taxes is to send a cheque to the Commissioner for Revenue. Making payments by visiting a post branch in Malta is also possible.
Benefits of buying real estate in Malta
Profitable investment. Real estate prices are increasing yearly: for the past 10 years, properties have become 1.5 times more expensive. For instance, an apartment that cost €192,000 in 2012 was worth almost €300,000 in 2022.
The investor is also not required to pay annual property tax.
Income from renting a property out. The demand for properties in Malta is increasing, as do real estate prices. The current annual return on a rental property is 3.5—6%, and a capital appreciation can reach 25%.
Permanent residence for the investor and their family members. Under the Malta Permanent Residence Programme, you can obtain permanent residence if you invest in real estate. The minimum sum of investment depends on the location of the property:
- €300,000+ — if real estate is located in the south of Malta or on Gozo island;
- €350,000+ — if a property is located in the north or centre of Malta.
The investor must own the property for at least 5 years after obtaining permanent residence.
Alongside the investor, their family members can also obtain permanent residence. That includes a spouse, children, and parents.
Safe haven. Upon receiving permanent residence, the investor also obtains a right to live in Malta unlimitedly. So, if something happens in your country of origin, you can quickly move to Malta.
At the same time, you’re not obliged to live in Malta to hold your permanent residence.
In brief: maintenance of real estate in Malta
The management company can pay almost all utility bills instead of the owner if the apartment or villa is located on the territory of a modern SDA residential complex. Apartments and villas in complexes are often bought by investors who receive Malta permanent residence or citizenship.
If the owner plans to rent out the property, they can use the services of an agent company. Its employees will collect payments, pay taxes, and fix breakdowns.
The telecommunications operator is usually chosen among those already connected to the building. It allows selecting an inexpensive package tariff and saving on connecting works.
Taking out the garbage is free of charge, but it must be sorted and handed over within the allotted hours. All the necessary information can be found on the official websites and the management company.
Frequently Asked Questions
There is no annual property tax in Malta. You are only charged when you buy real estate — in this case, the tax is 5%.
Yes, foreigners can buy real estate in Malta. Moreover, they can obtain Malta permanent residence by investing in a property.
Rental tax can be progressive, from 0 to 35%, or flat — 15%. The landlord chooses the appropriate option.
Yes, it is worth buying real estate in Malta as there are many benefits. They are an opportunity to obtain permanent residence for a family, create a safe haven, and get income from renting and selling a property several years after receiving a permanent residence card.
The owner of a residential property does not pay property tax. A land tax may apply if the building is built on long-term leased land.
Also, the homeowner pays for water and electricity to utility companies and for the elevator, swimming pool, and cleaning — to the management company. Gas can be bought in bottles. The owner chooses Internet tariffs.
Taking out the garbage is free.
Yes, it is possible. But if the bank is located in a country with a difficult geopolitical situation or under sanctions, paying will not be possible. In this case, you can open an account in a Maltese bank to pay all expenses related to real estate and keep a reserve there in the sum of annual expenses.
Individuals submit tax returns on the website of the tax service. You need to register as a taxpayer and get a tax ID to do it.
In Malta, there are residential complexes aimed at foreigners — SDAs. They are located in the country’s best areas, close to the necessary infrastructure and the sea.
The cost of the services of a management company depends on the area of the apartment or villa and the infrastructure of the complex: for example, on the number of swimming pools or the presence of a landscaped park area. Usually, the sum in the bill is between €700 and €1,000 per month.
Utilities in Malta are cold water and electricity. These services cost around €200 per month, but bills come every 2—3 months.
Garbage is taken out free of charge.
The property owner chooses the operator and tariffs for communication services and the Internet. Buying packages that include home and mobile Internet, television, and mobile communications is profitable. For a family of 2—3 people, the cost is about €100.
