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Property Tax in Malta

Property Tax in Malta

There is no annual property tax in Malta. Instead, a 5% tax is levied solely when real estate is purchased. In addition, property owners are subject to ground rent tax for land on which their house is located, applicable when the land is under a long-term lease. The type of dwelling, whether for a single-family or multiple families, is irrelevant in this context. It is important to note that this tax is not applicable if the land is owned outright. If you are interested in learning about which kind of properties, Malta imposes tax on, our accountants can help. Our CPA in Malta is also eligible to offer you practical assistance in this regard.

Requirements for buying land in Malta

Non-residents can acquire property in Malta without complications, provided they secure an Acquisition of Immovable Property (AIP) permit, which incurs a fee of €233, subject to potential changes at the discretion of the government. Typically, the AIP permit is issued within approximately 35 days. Our accountants in Malta can guide you about the extra costs related to AIP permit acquisition. Besides this, if you own a company and looking for auditors in Malta, please get in touch with us.

Also please note that AIP permits are not required for property purchases within Special Designated Areas (SDAs). Additionally, if you are an EU citizen, you are exempt from the permit requirement if you fall under the following categories:

  • Plan to invest in properties for rental purposes.
  • Maintained continuous residency in Malta for five years.
  • Intend to acquire a primary residence for personal use.

Moreover, foreign nationals and EU citizens contemplating property acquisition in Malta are generally restricted to owning a single property within the main territories of the Republic, primarily for owner-occupancy. However, they enjoy the flexibility to purchase multiple properties within Malta’s special designated areas. Before acquiring real estate, it is suggested to learn about the property tax in Malta. To help you avoid any issues, the services of our Malta tax advisors are at your disposal.

Also, discover how our payroll services in Malta can streamline your business operations. From compliance to efficiency, our accountants ensure your payroll needs are met.

Taxes associated with property in Malta

When buying property in Malta, you will encounter several financial considerations. The expenses include stamp duty, purchase tax, land tax, notary fees, and agency fees, along with potential requirements like an architect’s assessment and, for foreign buyers, the need for purchase permission. Typically, the cumulative tax burden ranges from 8% to 15% of the property’s value. The professionals at our Maltese accounting firm can also guide you about selling property tax in Malta. However, you can have a look below at the general property taxes in Malta:

  1. Stamp duty, amounting to 5% of the purchase and sale contract sum, is a common obligation. However, certain exemptions may apply. For instance, if the property is over 30 years old or located in a historical urban development area, no fee is charged on the initial €750,000 of the price, with a 5% tax applied to the remainder. Moreover, stamp duty is reduced or waived for primary and sole residences in Malta, transfers between spouses or divorce, and property acquisitions on the island of Gozo, where the fee is fixed at 2%. To learn more about these exemptions, get our accounting services in Malta.
  2. The island of Gozo and the southern regions of Malta offer real estate at a 10% to 15% lower cost due to lower infrastructure development. To stimulate these property markets and boost the local economy, the Maltese government has introduced a reduced stamp duty. Besides buying, our accountants can also guide you about selling property tax in Malta.
  3. For the Malta permanent residence program, the property purchase tax is a fixed 5% of the transaction sum.
  4. Land tax, known as ground rent, applies when the house is situated on long-term leasehold land, typically ranging from €40 to €250. Redemption of the land is possible, requiring payment of 20 rates in advance.
  5. Notary fees, an integral part of all real estate transactions, range from 1% to 3% of the transaction amount, plus 18% VAT. Besides notary services, we are also offering audits. You are welcome to get a consultation from our audit firm in Malta to learn more about our services.
  6. When private agents are involved in property selection, their services generally come for 1.2%, subject to an 18% VAT rate. This rate may vary depending on the case. To learn about our costs, please get in touch with our accountants in Malta. They can assist you with property tax in Malta.
  7. Foreign investors considering Maltese real estate typically require a purchase permit, known as an AIP, which carries a fee of €233. However, properties within SDA complexes do not necessitate a purchase permit.

When you are buying real estate, please be aware of all these related property taxes in Malta. In addition to buying, our accountants can also answer your questions related to selling property tax in Malta. Furthermore, our auditors in Malta provide essential financial oversight, helping businesses maintain transparency, compliance, and financial stability. Contact us for more information.