Why buy property in Malta in 2025

Malta is a tiny jewel of the Mediterranean Sea that combines European quality of life, ancient architecture and endless business and investment opportunities. Emigrants and investors have long looked to the island republic for its stable economy, security and mild climate. However, it should not be forgotten that moving and buying property requires careful analysis of all factors. The pros and cons of living in Malta will help you weigh up all aspects and understand whether this country is suitable for a new life and profitable investments.

Pros and cons of living in Malta for Russians

Russian-speaking emigrants in Malta meet both comfort and challenges. The island state provides excellent conditions for adaptation, but there are also some difficulties to consider. The pros and cons of living in Malta for Russians depend on many factors: language, culture, cost of living and level of service.

Pros:

1. English as an official language: Malta is a former British colony and English is on a par with Maltese. This makes it much easier to adapt, do business and communicate in everyday life.
2. European level of security: Malta has one of the lowest crime rates in the EU. The quiet streets of Valletta and old towns where you can walk safely at night attract families with children and retirees.
3. Attractive tax system: Malta offers tax incentives for foreign investors and entrepreneurs. For example, income tax for residents ranges from 15% to 35% and companies can take advantage of repatriation benefits.
4. Climate and nature: the Mediterranean climate with mild winters and warm summers allows you to enjoy more than 300 days of sunshine a year. Beaches with azure water, caves and cosy coves create ideal conditions for relaxation.

Minuses:

1. High cost of living: prices for housing, products and services are higher than in Russia. Renting a flat in Valletta costs from 700 EUR per month, and going to a restaurant costs 20 EUR per person.
2. Limited career prospects: Malta is a small country with a narrow labour market. It is more difficult for highly qualified professionals to find work, especially in specific fields.
3. Slow pace of life: bureaucracy and a leisurely pace can be a challenge for those used to the fast-paced life of big cities.

Malta’s climate and nature: a Mediterranean idyll

The warm sun, turquoise sea and mild climate are some of the main reasons why expatriates choose Malta to live and invest in. The pros and cons of living in Malta in the context of climate and nature deserve special attention as these factors directly affect the quality of life.

Peculiarities of the Maltese climate:

1. Hot summers and mild winters. The average temperature reaches +30°C in summer and rarely drops below +15°C in winter. This climate is suitable for those who cannot tolerate frost and want to enjoy the sun all year round.
2. More than 300 days of sunshine a year. The bright sun shines for most of the year, which is especially attractive for people suffering from vitamin D deficiency in northern countries.
3. Humidity and aridity. Summers in Malta are accompanied by high humidity, which can be difficult for people with respiratory problems. Winters are humid but mild.

Nature:

1. Beaches and coastline. Sandy beaches in the north of the island and rocky coves in the south create a variety of holiday conditions. Popular beaches include Golden Bay, Mellieha Bay and Paradise Bay.
2. Landscape and flora. The island nature offers beautiful views of terraced fields, olive groves and Mediterranean shrubs.

Taxes and cost of living: what to consider

Financial aspects here play a key role when moving and buying a property. The pros and cons of living in Malta depend largely on an understanding of the tax system and the level of expenditure.

Income Tax. Progressive scale of taxation:

1. Income up to 8500 EUR per year – 0%.
2. Income from 8,500 EUR to 14,500 EUR – 15%.
3. Income over 60,000 EUR – 35%.

Property Taxes:

1. Property transfer tax: 5% of the value of the property.
2. There is no annual property tax, which attracts investors.

Taxes for companies. The corporate tax rate is 35%, but there are refunds for non-residents, which reduces the effective rate to 5%.

Property in Malta: what does the island nation have to offer?

The pros and cons of living in Malta are largely determined by the opportunity to invest favourably in a home while earning a stable income or citizenship.

Types of property:

1. Flats and flats. The most popular type of property among foreigners. Modern complexes offer comfortable conditions for living and recreation. The average cost of a one-bedroom flat in Valletta or Sliema is from 250 000 EUR. In more remote areas, such as Birgu or Marsascala, you can find options from 180 000 EUR.
2. Townhouses and old houses. Malta’s old towns have many historic buildings with authentic architecture. Prices for such houses start from 350 000 EUR and depend on the condition and location.
3. Villas and penthouses. Luxury villas with sea views are available in the St Julian’s, Mellieha and Gozo area. The average price of a villa is from 700 000 EUR and penthouses from 500 000 EUR.
4. Commercial property. Investors can purchase business premises, offices and hotels. The cost starts from 400 000 EUR and higher.

Residence permit, permanent residence permit and citizenship: ways to stay legally

The pros and cons of living in Malta for foreigners depend on the type of residence permit that can be obtained.

Ways of obtaining a residence permit (VNZh):

1. Investments in property: purchase of a home from 275,000 EUR.
2. Worker’s residence permit: when employed by a Maltese company.
3. Study residence permit: for students studying at local educational institutions.

Conditions for obtaining permanent residence (PML):

1. Continuous residence in Malta for 5 years with a residence permit.
2. The investor programme allows you to obtain a residence permit through the purchase of real estate and investment in the country’s economy.

Malta Citizenship Programme through property investment:

1. Investments from 600 000 EUR and living on the island for 12 months.
2. The investment amount may increase depending on the number of family members.

Conclusion

The pros and cons of living in Malta allow you to consider all the nuances of moving and investing. The country attracts with its security, warm climate, stable economy and the possibility to obtain residence permit or citizenship through investments. However, the high cost of living, limited labour market and bureaucracy require careful preparation and a balanced decision.

For an investor, the answer to the question of what commercial property is, is the key to understanding a powerful financial instrument. Here, every square metre is active: it generates stable income, increases capital and serves as a reliable shield against inflation. Unlike the residential sector, business real estate requires deep business thinking, careful analysis and precise calculations, but its returns are incomparably higher. It is not just a purchase, but a strategic investment in the growth of your wealth.

What is commercial property?

Unlike residential, it doesn’t just “live” – it works. Rental income, value growth, inflation protection – each unit of space becomes an economic lever.

By definition, commercial facilities include premises used to generate profit: office, retail, industrial, warehouse and street retail formats.

The main distinguishing feature is the use of the space for income generation, rather than residential purposes. Hence, the key difference between residential and commercial property is its functional purpose and the way it participates in the economy.

Types affecting the strategy

The type of property determines not only the yield, but also the asset management strategy. The operating format affects the lease term, liquidity and exit scenario of the investment.

The market categorises assets by purpose and operating format:

1. Office space concentrates demand from IT, consulting, development and other smart industries. Class A office space yields up to 12% per annum in Moscow if occupancy levels are high.
2. Commercial property focuses on retail: from supermarkets to shopping malls. One anchor tenant at the Lenta or Magnit level will stabilise the cashflow for years.
3. Warehousing gives minimal maintenance costs with the growing demand for fullfillment and logistics. For 2023, vacancy in the segment did not exceed 1.5% – a record for the last decade.
4. Production facilities provide stability, especially when placed under a specific operator. Rental rates are lower, but the lease term is above the market average.
5. Free-use premises can be flexibly adapted for salons, clinics, mini-offices. Minimal conversion costs – maximum variability.

What commercial property is, the very structure of the offer suggests: type, location and tenant determine the income model and the degree of risk.

How a square metre earns

Earning money from commercial property is not limited to renting. An investor uses several channels:

1. Rental model – monthly receipts that generate passive income from commercial property. Yields range from 7% to 18% depending on the segment and region.
2. Value growth – capital appreciation through inflation, improvements and locational renovation. A property on the outskirts may increase in value by 35% after the opening of a new transport interchange.
3. Redevelopment – repurposing an obsolete building for new functionality, for example, from a warehouse to loft offices.
4. Equity – purchase at the excavation stage and exit on completion at a 30-50% premium in 12-18 months.
5. Buy to let – the sale & leaseback model eliminates downtime, with the tenant signing a long-term contract before the transaction.

Yield depends on the segment, condition of the facility, and geography. For example, in Kaliningrad, retail premises of the “district centre” format yield 14% per annum, while an office in the centre of St. Petersburg yields about 9%.

Pros and cons in numbers and details

Investing in for profit properties is traditionally thought of as a ‘safe haven’, but what is commercial property without sorting out the pros and cons?

Pros:

1. The yield is higher than that of housing (by 3-7 p.p. on average).
2. Contracts of 3-10 years fix the rate, providing stability.
3. Capital depreciation is minimised – property is indexed faster than inflation.
4. Ease of scaling – buying a second, third facility does not require reorganisation of the business.
5. Professional management companies take care of the routine completely.

Minuses:

1. The starting threshold is higher – entry from RUB 8 million, even in the regions.
2. High correlation with economic activity – the residential sector suffers faster in a crisis.
3. Difficulty in finding a tenant – downtime can be as long as 4-6 months.
4. Difficulties in conversion – conversion requires permits and investment.
5. The disadvantages of commercial property are magnified when there is a lack of diversification.

Rookie mistakes boil down to buying without analysing: ignoring location, condition, legal encumbrances and target model. For example, buying an office in a class “C” business centre without a tenant is not an investment, but a lottery.

How to avoid mistakes and increase profitability

Newcomers often seek quick results, ignoring strategic planning. To maximise profitability, it is important to consider not only the commercial property, but also who the end tenant will be. What maintenance costs will be required and what growth potential the property has.

Example: the acquisition of free space near a future metro station can increase capitalisation by 20-40% within 2 years. Analysis of transport accessibility, density, competition and infrastructure is critical. Street retail at the exit from the metro brings a rental flow higher by 25-30% than a similar space deeper into the neighbourhood.

An investor who uses professional tools – from legal due diligence to traffic analysis – minimises risks and gains a competitive advantage. A reliable contract, a quality tenant and a long-term strategy stabilise passive income from commercial property.

Examples of international strategies

The question of what constitutes commercial property becomes particularly relevant when entering foreign markets. One example is property investment in Malta. The island offers stable legislation, an English-speaking environment and a growing demand for office and retail properties. The rate of return is around 6-7% per annum, but with high capital protection and the possibility of a residence permit for purchases from €300,000.

In Lisbon, office space has increased in value by 43% over the last 5 years. In Dubai, retail properties show high liquidity due to the influx of tourism and a favourable tax system. But both there and in other locations the rule applies: without a deep analysis of the market and specifics – do not invest.

When it is most profitable to invest

The ideal moment to enter is not during a period of hype, but at the moment of correction. For example, in the second quarter of 2023, the market for industrial premises in the Moscow region showed an increase in rates by 7% due to limited supply – this was a signal to buy. That said, it is not “when” but “where” that is more important.

Commerce does not tolerate spontaneous decisions. An assessment of liquidity, projected profitability, the technical condition of the property and legal restrictions is a mandatory stage. A simple warehouse without heating can turn into a loss, while a properly zoned office in a promising location can become an asset with a yield of 15% or more.

What to consider when selecting a site

What is commercial property without a systematic approach to selection? A potential investor analyses:

1. Tenant Target Audience.
2. Neighbourhood Infrastructure.
3. Segment Competition.
4. Facility condition and hidden costs.
5. History of the property and encumbrances.
6. Prospects for the development of the territory.

Example: a coffee shop space near the university exit will provide steady traffic, but will require noise insulation, a storefront facade, and food profile approval. Lack of attention to detail is a direct path to mistakes and losses.

What is commercial property: conclusions

What commercial property is a tool for sustainable capital growth. The object generates income, increases the value of investments and reduces inflation risks.

The market requires calculation rather than intuition. Only strategy, analysis and understanding of risks turn the area into an asset, not an encumbrance.