Malta Real Estate

Malta real estate

The Maltese real estate market has in recent years been one of Europe’s success stories, experiencing five years of consecutive growth prior to the global COVID-19 pandemic, both in the number of properties purchased and overall volume.

Malta is a nation of homeowners and Maltese people like to invest in property. This cultural propensity, together with the arrival of many foreign nationals, particularly from the affluent gaming and finance sectors, has created demand for property from locals and foreign buyers alike. While the property market appears to be stabilizing, there is a constant demand for high-quality property. Sliema, St. Julian’s, and Valletta are popular destinations for local and foreign investors.

The majority of real estate investors choose apartment living, and many modern developments have sprung up over the past five years to satisfy the demand for this type of accommodation. For those who prefer something with authentic Maltese character, elegant townhouses can be found in Malta’s towns and villages, together with classic countryside villas.

Acquisition of property in Malta

Before proceeding with the acquisition of property in Malta, buyers are advised to follow these crucial recommendations:

• Trusted professionals who have good local knowledge of the market should always be consulted.
• It is advisable to instruct an architect to check that the property being purchased conforms to all local building regulations.
• The transfer of funds from foreign banks is subject to rigorous due diligence checks, which can take time. It is advisable to transfer the funds to the notary in good time to avoid delays in signing the contracts.

Are there any restrictions on the acquisition of real estate in Malta by foreign buyers?

Foreign investors may purchase only one property in Malta, except for property purchased in a special designated area (SDA), which is unlimited. When purchasing outside an SDA, the purchased property cannot be rented out.

How can immovable property in Malta be acquired?

Once an offer has been accepted and a notary has been instructed, there are two steps to the property purchase that buyers need to consider: the promise of sale and the final deed.

Does the applicant need to open a bank account in order to purchase property, and if so, what is the procedure?

A Maltese bank account is not required. The buyer transfers the funds directly into the notary’s account and the notary then makes all the payments on behalf of the buyer.

What additional expenses will the real estate transaction incur?

• Stamp duty at 5% of the sale price
• Notary fees at approximately 1.5% of the sale price
• Architect’s fee of approximately EUR 1,000

What kind of returns can be expected from property investment in Malta?

Over the recent years, the return on capital investment has been in excess of 5%, while the yield on rental income is approximately 3.5%.

How is rental income taxed?

Rental income is taxed at a standard rate of 15%.

What other immovable property-related taxes and charges are imposed in Malta?

There is no annual property tax in Malta. If the property is under leasehold, ground rent will apply. By law, apartment blocks must be managed by either a residence committee or a third-party management company, and condominium fees apply on all apartments.