Что такое жилье премиум-класса: разбор для новичков

The small country has long attracted investors from all over the world due to its stable economy, favourable taxation system and favourable climate for living and doing business. However, before buying property in Malta, it is worthwhile to understand in detail what taxes you will have to pay in order to avoid unexpected expenses.

Any transaction comes with certain obligations, which include:

• property taxes;
• stamp duty;
• acquisition and rental fees if the object is purchased for investment purposes.

The taxes an investor must pay when buying a home depend on many factors: the nationality of the buyer, the type of property purchased, its value and the purpose of the purchase. In this article we will consider these issues in detail.

Specifics of taxes when buying property in Malta

Any property purchase in the country is accompanied by mandatory tax transfers. The buyer pays taxes when buying a property in Malta, including stamp duty and transfer of ownership.

Stamp duty is a set tax payable by the buyer. The standard rate is 5% of the price of the property, but there are a number of conditions that can reduce this amount.

If the buyer is a resident of Malta and is buying his first home, the rate is reduced to 3.5% for an amount up to €200,000. Additionally, there are incentives for investors buying property under investment programmes. Stamp duty is payable to the tax office in two instalments: 1% on signing the preliminary sales contract and the remaining 4% within 15 days of the completion of the transaction. Late payment may result in penalties.

There are also additional costs for the buyer to consider:

• notary fees (about 1-2% of the transaction value);
• government fees;
• legal support.

Importantly, certain types of property are subject to tax relief. For example, property located in designated investment zones may be subject to lower tax rates.

What taxes an investor pays when selling Maltese property

During the transaction, the owner will have to pay Capital Gains Tax, which is 8% of the contract amount. If the property has been owned for more than three years and used as a permanent home, no tax is due.

For resale investors, it is important to consider additional taxes, including duty on the proceeds from the sale of commercial property. The contribution rate can vary from 5% to 12% depending on the nature of the sales contract.

Tax on renting out accommodation to tenants

If a property is used for rent, its owner must pay tax on the income received. In the territory of the country, the percentage fee is 15% of the total amount of rental income. If the owner is registered as an individual entrepreneur or a legal entity, the duty may be calculated at different rates. The tax is payable annually to the Malta Revenue Authority and investors can deduct certain expenses (repairs and maintenance of the property) to reduce the tax base.

When you need an AIP Permit in Malta and how much it costs

For non-residents, the acquisition of property in Malta requires a special AIP Permit. The document is mandatory for all non-EU citizens. The permit costs €233 and takes 6-8 weeks to process.

AIP Permit is required for the purchase of residential property, but there are exceptions. Investors purchasing property in specially designated investment zones are exempt from the need to obtain this document.

Is it worth investing in buying property in Malta?

Malta remains one of the most promising property investment destinations. High demand for housing, stable price growth and well-developed infrastructure make the market attractive.

Investors can choose from a variety of strategies: buying for long term rental, resale and participation in government programmes such as Citizenship by Investment. Malta’s property taxation system is one of the most favourable in Europe in terms of purchase taxes.

Due to the growing demand for rentals, especially amongst expatriates and tourists, property investments in Malta provide stable returns. Before purchasing, it is important to carefully analyse tax liabilities and possible unforeseen expenses in order to plan your investment strategy as effectively as possible.

Conclusion

Buying property in Malta involves the payment of certain taxes which should be carefully analysed when planning the transaction. The main charges include stamp duty, notary and registration fees, as well as capital gains tax levied on the sale of property used for investment purposes and on rental transactions.

Liabilities can be optimised by applying preferential rates, obtaining tax residency status and strategic tax planning. In order to minimise financial risks and maximise investment potential, it is best for the investor to consult a qualified tax advisor who is well versed in Maltese real estate.

The main myths about investing in real estate in Malta create an illusion of easy income and guaranteed profit. In fact, the actual growth in property prices in 2024 was 6.3%, but local price reductions often go unnoticed. Misguided analysis leads to wrong steps, and stereotypes reinforce distortions of perception.

Main myth #1 about real estate investments: investments always bring income

Misconceptions often claim that renting guarantees stable income. In reality, rental yields in Valletta, Sliema, St. Julian’s range from 4-6% per year, and in the suburbs, it’s up to 2.5%. Earnings from real estate depend on location, quality of the contract, and proper planning. In the absence of demand, properties remain vacant, and risks increase.

Myth #2. Real estate in Malta protects against inflation

Malta’s economy heavily relies on tourism. In 2020, rental demand dropped by 30%, incomes decreased, and payback periods increased. Investing in foreign real estate without considering prices, taxes, repairs, and utility payments creates financial risks.

Myth #3. Quick profit is standard

Erroneous stereotypes about investing in real estate often create an illusion of rapid capital growth. In reality, the average price growth is 4-5% per year. The secondary market often shows a decline in value due to the condition of properties. Developers set the initial price, but the actual cost increases by 10-15% due to taxes, registration, and utility connections. A resale strategy rarely yields the expected income without long-term planning.

Myth #4. Reselling real estate in Malta is a simple investment procedure

The developer sets strict deal conditions. The contract requires detailed scrutiny. Without analyzing the legal aspects, one may acquire encumbered property. Laws restrict purchases by foreigners outside special zones. Checking property ownership cleanliness is necessary.

Myth #5. Novices can easily enter investments

Investments require a precise strategy, financial analysis, and understanding of the tax system. Developer, contract, taxes, finances, legal details—all require professional assessment.

Stages of successful investments:

1. Analysis of profitability, expenses, taxes, utility payments, repair costs.
2. Assessment of demand, prices, development projects.
3. Verification of legal cleanliness, contract, property rights.
4. Calculation of tax obligations, financial consequences of sale.
5. Development of strategy: rental, sale, long-term ownership.

Thoroughly working through each step helps minimize risks and avoid common mistakes inexperienced investors face. Only a comprehensive approach allows turning a purchase into a truly profitable capital investment.

Myth #6. Malta’s real estate market always grows

Erroneous notions about investing in real estate imply constant price growth. In 2019, growth was 10%, in 2020—only 1.6%, in 2022—5%. Demand and supply depend on seasonality, demographics, and the economy. A sound strategy relies on regular monitoring and detailed analysis, not stereotypes. Risks increase during periods of reduced tourist flow and rising interest rates.

Myth #7. Specialists are not needed in the deal

Malta’s laws require strict compliance. The contract must include all legal details, including the absence of debts on utility payments and compliance with building standards.

Income tax from rent for non-residents is 15%. Utility payments and insurance contributions fall on the owner. Finances, taxes, and detailed analysis of mandatory expenses determine the effectiveness of the strategy. To ensure successful income, collaboration with lawyers, tax consultants, and professional developers is required.

Myth #8. Any investments bring profit

Stereotypes claim that any property is profitable. Only liquid locations ensure high income: Valletta, Sliema, St. Julian’s, Gzira. The average price of an apartment in Sliema starts from 350,000 euros, in the suburbs—from 180,000 euros. Risks increase when buying old properties without renovation and developed infrastructure.

In old buildings, utility payments often exceed the norm due to wear and tear. Repairs require additional investments. A thorough analysis of demand, building condition, and the area eliminates misconceptions and minimizes financial risks.

Myth #9. Income in Malta is only possible through rent

Purchasing a property with subsequent sale after 5 years allows avoiding increased capital gains taxes. The flexibility of the strategy allows combining rental and sale, choosing the optimal moment depending on the market conditions.

Successful earnings are based on considering the legal contract conditions, tax rates, and market dynamics. Combining rental and sale increases overall profitability.

Myth #10. Entry into the Maltese market is only for large capital

Misconceptions create an illusion of a high starting point. In practice, the market offers affordable options: apartments in the suburbs—from 150,000 euros, studios in tourist areas—200,000–250,000 euros.

Financial planning, tax optimization, choice of developer, and analysis of utility payment costs allow efficient entry into the market. The developer offers flexible payment schedules, discounts at the early purchase stage up to 15%. The right strategy and careful analysis help minimize risks and achieve stable income.

Features of the Maltese market

Prices start from 3,000 euros per square meter in Sliema and reach 6,500 euros in premium areas. In the suburbs, the cost starts from 2,000 euros. Demand is concentrated in business and tourist zones with yields up to 6% per year. Profit decreases in other areas.

State laws regulate transactions. Purchase tax is 5%, capital gains tax on sale is 8-12%. Utility payments range from 120–180 euros per month. The developer must provide full documentation and confirmation of the absence of debts. Legal aspects of the transaction require the involvement of a licensed lawyer.

Myths about real estate investments in Malta: key takeaways

Myths about real estate investments in Malta simplify perception and create false expectations. In-depth analysis, financial planning, legal verification, offer assessment, continuous market monitoring dispel misconceptions and create real investment decisions. Any investments require active management, a sound strategy, and precise calculation at each stage.