Property Tax in Malta

There is no annual property tax in Malta. Instead, stamp duty (generally 5%) is paid by the buyer on purchase, and a final property transfer tax (generally 8%) is paid by the seller on sale. 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.

Malta property tax rates and exceptions

In Malta, when selling a property, the seller is subject to an 8% tax known as the Malta property tax. However, there are various scenarios where this rate can be adjusted. If an individual who declared on purchase that the property would be his sole ordinary residence (and who owns no other residential property) sells it within 3 years, the tax is reduced to 2%. Additionally, if the sale concerns the seller’s own residence of at least 3 years and occurs within 12 months of vacating it, no tax is applied. Selling a property (not part of a project) within 5 years of acquisition reduces the tax rate to 5%. In cases of direct inheritance to spouses, children, or parents, the tax rate is 0%, exempting it from taxation.

Similarly, in instances of property division due to divorce, the transfer of ownership is not taxed. It’s important to note that the Malta property tax is applicable even when selling inherited property, calculated at 12% (unless the seller opts for 8% of the sale price) of the difference between the property’s value at the time of inheritance and its sale.

If you have further questions about the property tax exemptions applicable in Malta, we can assist you. Our tax advisors in Maltaoffer comprehensive information in this regard and answer your concerns effectively.

Rental property taxation in Malta

The tax framework in Malta offers an optional final 15% tax on gross rental income, encompassing both residential and commercial properties. However, beneath this apparent simplicity lie intricacies such as optional provisions, exclusions, penalties for non-compliance, and unique considerations for corporate entities. This comprehensive overview aims to illuminate the essential facets of rental property taxation in Malta, providing valuable guidance for individuals and organizations involved in property rental endeavors.

Given the evolving nature of tax legislation, seeking advice from tax professionals is recommended to stay abreast of the latest updates and ensure compliance with applicable laws. Our tax advisors in Maltacan offer you detailed information to help you avoid any non-compliance penalties. With our expertise and dedication, we strive to offer tailored solutions to meet your specific needs and ensure compliance with tax regulations in Malta.

Updates and incentives in Malta’s real estate sector

Highlighted developments in the real estate sector include the extension of duty exemptions for first-time buyers and partial stamp duty refunds for second-time buyers. Schemes offering income tax and duty exemptions on properties in Urban Conservation Areas (UCAs) or older properties remain in place.

However, reduced duty rates for residential property acquisitions in Gozo are not effective beyond December 31, 2023. Additionally, increased grants under the Private Rent Housing Benefit Scheme have been announced, alongside continued VAT refunds for property restoration expenses. Restoration aid for properties of historical significance has also been made available. For comprehensive details and updates on property-related schemes and incentives, consult our trusted real estate professionals.

Moreover, you can also acquire the assistance of audit firm in Malta. Our auditors in Malta contribute significantly to ensuring financial transparency and regulatory compliance across various industries. Their expertise lies in conducting thorough examinations of financial records, assessing internal controls, and identifying areas of potential risk or fraud.

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:

• Acquire the property for their business activities or for the supply of services.
• 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.

Does buying property in Malta lead to residency/citizenship?

Yes, participation in the Malta Permanent Residence Programme (MPRP) or applying for Maltese citizenship through naturalization for exceptional services via direct investment necessitates the acquisition of residential property. The minimum real estate value under the MPRP is €375,000 for properties anywhere in Malta or on Gozo (alternatively, a lease of at least €14,000 a year). However, the citizenship-by-investment route (which required residential property of at least €700,000) was declared contrary to EU law by the CJEU on 29 April 2025 (C-181/23) and should not be relied on.

The preferred types of properties among foreigners are apartments, although investors also consider townhouses, penthouses, and villas. These requirements underscore the formal process and financial commitment involved in seeking residency or citizenship in Malta through property investment. Experts at our accounting firm in Malta can guide you if you are planning to apply for residency/citizenship by investing in real estate.

Besides this, our accountantsalso offer a wide range of services, like; payroll in Malta. Our CPA in Malta can facilitate payroll management by ensuring compliance with local tax regulations, calculating accurate salaries and deductions, and providing timely payroll processing services to businesses.

Overview of 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 located in an Urban Conservation Area, or is at least 20 years old and has been vacant for at least 7 years (for deeds until 31 December 2026), 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, while the former reduced 2% rate for acquisitions in Gozo ended in early 2024. 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 applied a reduced 2% stamp duty in Gozo until early 2024. 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, ranging 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. Contact us if you are seeking accounting services in Malta.