The main taxes on real estate in Malta are paid when signing a sale and purchase contract. The tax rate for buying real estate ranges between 8 and 15% of its value.
There is no annual property tax in Malta, but in some cases, you need to pay tax on land.
Here’s detailed information on taxes, fees, and additional costs for buyers, owners, and sellers of residential properties in Malta.
Investors buy properties in Malta to move to the country, acquire a rapidly growing asset, or obtain official status, such as permanent residence by investment.
Foreigners who buy and sell property in Malta pay the same taxes as native Maltese. Tax rates do not depend on whether the investor is a tax resident of the country.
When buying a property in Malta, you must pay stamp duty, purchase tax, land tax, and notary and agency fees. An architect's conclusion and, in some cases, permission to purchase real estate by foreigners are also required. As a rule, the tax amount is 8 to 15% of the property value.
The stamp duty is 5% of the purchase and sale contract sum. In some cases, exemptions apply.
Stamp duty is reduced or waived if:
A low level of infrastructure development characterises the island of Gozo and the southern regions of Malta. The cost of real estate in these areas is 10—15% lower than, for example, in the north of the country. The Maltese government offers a reduced stamp duty to revitalise the property market and the economy of Gozo.
Land tax. If the house is on land taken on a long-term lease, the buyer pays a land tax called the Ground Rent. The tax is between €40 and €250. The land can be redeemed; you need to pay 20 rates at a time.
Notary fee. All real estate transactions go through a notary. The notary fee is 1 to 3% of the transaction amount, plus VAT — 18%.
Agency fee. If a private agent selects the property, their services cost 1.2%. This fee is also subject to VAT at the rate of 18%.
Architect's conclusion. When buying a property, the architect's conclusion is paid; it costs about €300.
Purchase permission. Foreigners investing in Maltese real estate receive a purchase permit called AIP. The fee for it is €233. But if an investor buys a property in an SDA complex, they don’t need to obtain a permit.
SDAs, or Special Designated Areas, are business-class residential complexes with simplified rules for foreigners buying real estate. Buying real estate in the SDA is about twice as fast because the buyer does not need to obtain the AIP permit.
There is no real estate tax in Malta. If the house is on rented land, the owner pays an annual Ground Rent tax of between €40 and €250.
The property owner pays the utility bills and the fees required by the management company. The company is responsible for maintaining the infrastructure of the residential complex and providing services to residents.
Property insurance is not mandatory, but many owners get it.
The expenses of the owner of a three-bedroom apartment in an SDA complex, including utility bills, management company fees, and insurance, are about €14,000—15,000 per annum.
A foreigner can only rent out a property if the property is in an SDA complex. If they receive a rental income, they pay taxes. The property owner can rent it out through an intermediary; in this case, you need to pay for the services of an agent.
Tax on rental income. The landlord chooses one of two tax regimes for paying tax on rental income: with a differentiated or flat rate.
In the first case, the differentiated rate is 0% to 35%, depending on the sum of the entire taxable income. You can get a tax deduction when paying income tax on a progressive scale.
Tax rates and deductions are different for tax residents and non-residents of Malta. In addition, when calculating the tax for residents, marital and parental statuses are considered.
The rate of 35% for non-residents applies to income from €7,801 per year and for tax residents — to income from €60,001.
In Malta, the cost of rent is high — €1,000+ per month for a one-bedroom apartment in a modern residential complex. The rental income will be above €7,000 annually, so non-residents usually do not benefit from a differentiated rate.
Owners may also pay tax on rental income at a flat rate of 15%. The rate is applied to all objects that the investor rents. There is no tax deduction for this option.
Agent fees. Landlords turn to an intermediary to save time searching for tenants and maintaining real estate. Agents are often brought in if the property is oriented towards short-term rentals, such as renting to tourists.
With a short-term lease for up to six months, the agent's services are paid once — when signing the contract. For the landlord, the service cost is approximately half the monthly rental income and includes 18% VAT.
With a long-term lease, the cost of agent services for the landlord is about 10% of the income.
Who pays utility bills? If the property is rented out for a short-term lease, the owner pays for the utilities and services of the management company. These costs are included in the rent.
If the property is rented out for a long-term lease, the tenant makes the payments.
An example of the costs of renting a property out for a long period for €2,000 per month:
The total expenses of the landlord will be €536, and the profit will be €1,464.
When selling a property in Malta, the seller pays an 8% tax called the Malta Property Tax. In some cases, the rate may increase or decrease.
The tax is reduced if:
The Malta Property Tax is also paid if an inherited property is sold. The tax is levied on the difference between the property value in the will or death deed, Causa Mortis, and at the time of sale.
To participate in the Malta Permanent Residence Programme or apply for Malta citizenship by naturalisation for exceptional services by direct investment, a person can buy a residential property only.
Under the MPRP, the minimum real estate value must be €375,000, no matter its location. To be able to get Malta citizenship, a person needs to buy real estate for at least €700,000.
The most popular type of property that foreigners buy is apartments. Investors also purchase townhouses, penthouses, and villas.
Professional real estate investors often own properties in multiple countries. If they rent them out, there is a worldwide rental income. This may affect the tax burden of investors who plan to obtain permanent residence or citizenship in Malta and become tax residents.
Tax status of an investor in Malta. Foreigners who obtain a residence permit or a passport in Malta do not automatically become tax residents of the country.
Non-residents spend less than 183 days a year there. They have a tax number and a registered address, which may be in Malta or another country.
An investor becomes a tax resident of the country if they spend at least 183 days a year there and have a registered address and tax number.
Taxation is affected by domicile, the place of permanent residence. It does not have to be the same as the country of tax residence: it is possible to be domiciled in one country and tax resident in another. To obtain a domicile in Malta, you need to break ties with other countries and provide evidence that you intend to live permanently in Malta.
The status of the investor affects the tax base when calculating income tax in Malta:
Property taxes outside Malta. If a tax resident of Malta owns real estate abroad, their income may be taxed in two countries.
The rates may be reduced if there is a double tax treaty (DTT) between Malta and the country where the property is located. In this case, to calculate taxes, you need to rely on the terms of the DTT.
The opposite rule also applies: if a resident of another state owns real estate in Malta, they pay taxes on the property in Malta and the country of tax residence. The DTT can also reduce the tax burden.
Taxation for property owners in Malta is more convenient than in other EU countries. For example, in Austria, the tax on rental income in most cases is 25% and sometimes reaches 55%, while the tax on sales income can be 30%.
Features of buying, owning, and selling real estate in Malta:
If the property is worth at least €375,000, a foreign investor can obtain permanent residence under the Malta Permanent Residence Program.
If the property costs €700,000 or more, additional charges can be paid, and then an application for Malta citizenship by naturalisation for exceptional services by direct investment can be filed.
No, you cannot. There is no investment-based path to get Malta citizenship.
It is possible to get Malta citizenship by naturalisation after 5 years of living in the country. There’s also naturalisation granted for exceptional contributions to Malta or humanity. It is called Citizenship by Merit.
Eligibility fields include entrepreneurship, investment projects, job creation, innovation, science, education, culture, philanthropy, security, and social impact.
When buying real estate, the additional costs of the buyer range between 8 and 15% of the property value. The main costs include stamp duty, and notary fees.
The seller of real estate pays a tax of 8%, and in some cases, it is possible to reduce the tax rate.
The services of realtors can be used when buying, selling, and renting real estate out.
When buying real estate, the services of a private realtor cost 1.2% of the object’s value plus 18% VAT.
If you rent out real estate through an agent, their services will cost half the cost of rent and 18% VAT.
Generally, property purchase in Malta is subject to stamp duty at 5%, but exemptions are sometimes available. For example, if the property is purchased as a first and only residence, there is no fee for the first €200,000. And when buying property on the island of Gozo, the rate is 2%.
The seller of real estate pays tax, which is up to 8%.
Property tax in Malta is paid by a buyer when purchasing real estate. It is 5% of the property value. There is no property tax for a seller.
Two taxes are paid when buying real estate in Malta. They are a stamp duty of 5% and a purchase tax of 5% of the property value.
Rental tax in Malta is paid on income from renting a property out. It can be either progressive at 0% to 35% or flat at 15%. The owner decides which option to choose.
Malta does not impose an annual property tax on residential properties, which makes it an attractive location for property investors and homeowners. However, there are other one-time fees and duties associated with purchasing property, such as stamp duty and potentially capital gains tax on the sale of property, depending on the circumstances of the sale.
The tax on selling property in Malta is generally calculated as a final withholding tax at a rate of 8% of the sale price. In some cases, the rate may increase or decrease. For instance, the sale of one’s sole or main residence that has been owned and occupied for at least three years may be exempt from this tax if the proceeds are reinvested in another property within one year.
