Property Taxes in Malta 2025

As of 2025, Malta’s property taxation system remains one of the most favourable in the European Union. The absence of an annual property tax makes Malta an attractive jurisdiction for private investors and foreign companies purchasing residential or commercial properties.

The main mandatory payments relate to the acquisition, transfer or sale of real estate. When purchasing real estate, a stamp duty equivalent to 5% of the property’s value is levied. However, certain categories of buyers are eligible for exemptions. For instance, first-time buyers using the property as their primary residence may be exempt from stamp duty on amounts up to €200,000. Similar concessions apply to properties in Urban Conservation Areas and to buildings over twenty years old that have been derelict for at least seven years. In these cases, duty may be reduced to 1.5% on the first €200,000. Other cases where concessions apply include when property is transferred between spouses or gifted to children for their residence.

In addition to the duty, the buyer pays for notary services, an architectural report and a real estate agency commission. If necessary, there is also a fee for obtaining a purchase permit for a foreigner. Typically, the notary fee ranges from 1% to 3% of the transaction value, the architectural report costs around €300, and the agency commission amounts to up to 5%.

Property owners do not pay annual property tax. However, if the property is located on state-leased land, an annual ground rent of between €40 and €250 may be charged. Owners also bear the costs of utilities, building maintenance, and management company fees, if applicable.

When selling real estate, a final transfer tax (property transfer tax) is applied, replacing the classic capital gains tax. In most cases, this is 8% of the transaction value. For properties sold within the first five years of purchase, this rate may be reduced to 5%. If the property has been used as a primary residence and is sold within three years, the rate may be as low as 2%. Separate rules apply to the transfer of property by inheritance or gift, with rates ranging from 7% to 12%, depending on the circumstances and the date of the original purchase. If the owner has lived in the property for at least three years and left no more than a year ago, no tax is levied.

Tax rates and rules for foreign investors are the same as those applicable to Maltese citizens. However, benefits associated with using real estate as a primary residence are only available if the investor actually lives in the property. All preferential schemes, including zero duty for first-time buyers, are valid until the end of 2025, provided the relevant documents are submitted within the specified timeframe.

Thus, Malta retains its status as a country with a transparent and predictable tax system in the real estate sector. The absence of an annual property tax, flexible buyer benefits and moderate transfer rates make the country’s real estate market attractive for long-term investment and stable rental income.

 Taxes when buying property in Malta

When buying property in Malta, the main mandatory tax is stamp duty. This is paid by the buyer upon completion of the transaction and is calculated based on the cost of the property purchased. The base rate is 5% of either the contract price or the property’s market value, whichever is higher. Payment is made in stages: 1% upon signing the preliminary purchase agreement, followed by the remaining 4% upon execution of the notarial deed.

Certain categories of buyers are eligible for benefits and reduced rates. Under the first-time buyer programme, the stamp duty rate on amounts up to €200,000 may be 0%, provided the property is used as the main residence. For buyers purchasing a second property for their own use, as well as for those buying property in historic or restoration areas (Urban Conservation Areas), the rate may be reduced to 1.5% on the first €200,000.

Special concessions apply to family transactions, such as the transfer of property between spouses or gifts to direct descendants for residential purposes. In such cases, stamp duty may be significantly reduced or even waived.

In addition to stamp duty, buyers incur additional costs associated with the transaction. These include notary services, architectural expertise, state registration, possible agency commissions, and administrative fees. On average, notary fees range from 1% to 3% of the transaction value, architectural expertise costs around €300, and real estate agency services can cost up to 5% of the property’s value.

If the buyer is a foreign citizen, they may need to obtain an Acquisition of Immovable Property Permit to purchase real estate. This permit is required if the property is not located in a Special Designated Area where foreigners can purchase property freely. While the cost of obtaining a permit is minimal, the process requires the submission of documents to confirm the investor’s identity and the source of their funds.

Thus, taxation on the purchase of real estate in Malta is transparent and moderate. By choosing the right scheme and complying with the eligibility criteria, it is possible to significantly reduce the amount of stamp duty, particularly if the property is intended as a personal residence or is located in an area that encourages investment in and restoration of historic buildings.

 Cost of legal services when purchasing real estate in Malta

When buying property in Malta, the costs of legal support and notary services are an essential part of the transaction and must be factored into your budget planning in advance. The main cost is for the services of a notary, who verifies the legality of the property, draws up the purchase agreement, prepares the documents for state registration, and supervises the transfer of ownership. Notary fees typically amount to between 1% and 3% of the property’s purchase price. In addition to this percentage, a fixed fee may be charged for due diligence, searching the land registry, and publishing the transaction. On average, these additional costs amount to around €600.

If the property is purchased by a foreign citizen outside an area open to free purchase, a purchase permit (AIP permit) is required. The state fee for processing this permit is approximately €233. Investors should also budget for the costs of translating and legalising documents, notary fees and an architect’s report on the property’s condition, which can range from €300 to €800 depending on the complexity of the transaction.

Overall, it is advisable to budget for legal costs amounting to between 1.5% and 2.5% of the property’s value, covering all administrative fees and preparatory procedures. In some cases, such as when purchasing historic buildings, properties with multiple owners or inherited properties, the cost of legal support may be higher due to the need for a more detailed review of the legal status.

Foreign investors are strongly advised to engage experienced lawyers who are familiar with local procedures and the specifics of transaction processing — especially if they plan to obtain an AIP permit. Comprehensive support from a lawyer and notary ensures the security of the transaction, prevents delays in registration, and mitigates the risks associated with potential legal restrictions or encumbrances on the property.

 Cost of notary services when purchasing property in Malta

The cost of notary services for buying property in Malta depends on the property’s total cost and the transaction’s complexity. On average, notary fees amount to between 1% and 3% of the property’s purchase price. For a property costing €300,000, for example, the buyer should expect to pay between €3,000 and €9,000.

The final amount is determined by various factors, including the number of documents, the scope of the legal review, the presence of encumbrances, the specifics of the property’s ownership, and the number of parties involved. If the property is located in a historic building, forms part of an estate or requires additional verification in the land registry, the cost of services may be closer to the upper limit of the specified range.

Typically, payment for notary services is made in two instalments: one upon signing the preliminary purchase agreement and the other upon signing the final notarial deed. Additionally, the notary may charge fixed fees for registering the transaction, checking land registry entries, and publishing the contract, which usually increases costs by several hundred euros.

To enable reliable budget planning, it is recommended that the total costs for notarial support and transaction processing are estimated at around 2% of the property value. Therefore, when purchasing a property worth €300,000, the total notary fees would be around €6,000, including all administrative and registration fees.

 Cost of real estate agent services when purchasing property in Malta

The cost of real estate agent services when purchasing property in Malta is usually around 5% of the property price. In the case of an exclusive (sole-agency) contract, where the agent is granted exclusive rights to sell the property, the commission may be around 3.5% of the property value. VAT (18%) is added to this amount.

It is important to note that the commission is most often paid by the seller of the property, but this can be taken into account in the agreement between the parties, and in fact, part of this amount can be transferred to the price of the property, which is paid by the buyer.

 Taxes on property ownership in Malta

The fact that property ownership in Malta is not subject to an annual property tax makes the country one of the most attractive jurisdictions in Europe for long-term investment in residential and commercial real estate. The absence of a regular ownership tax means owners are not required to make annual payments simply for owning the property.

The only regular expenses associated with ownership are operating and administrative fees, which are set by the management company or residents’ association if the property is located in a residential complex or building with communal areas. These payments cover infrastructure maintenance, cleaning, lift maintenance and security systems, and can range from a few hundred to one or two thousand euros per year depending on the property’s location and level.

In some cases, owners of properties located on state-leased land are required to pay an annual ground rent fee for the use of the land. This usually ranges from €40 to €250 per year and may be fixed or subject to revaluation in the long term.

In addition, property owners pay for utilities, property insurance, and maintenance costs. If the property is rented out, the income received is taxed at 15% for resident and non-resident individuals if the preferential regime applies, or at the general rate of 35% if the owner conducts commercial activities or rents out the property through a company.

Thus, the absence of an annual property tax makes Malta particularly attractive for long-term investors. Property owners’ expenses are limited to operating payments and land rental fees only if rental income is received, ensuring stability and transparency of the tax burden.

 Taxes on short-term property rentals in Malta

Income from short-term property rentals in Malta is subject to taxation, depending on ownership and use. Individuals who rent out a property directly without registering a business can take advantage of a special tax regime providing for a fixed rate of 15% on gross rental income. In this case, tax is paid on the full income, and expenses for property maintenance, repairs or servicing cannot be deducted. This option is convenient for private owners who rent out accommodation to tourists via online platforms or short-term contracts.

However, if the property is rented out as part of a registered business, the income is considered commercial and is subject to the standard corporate tax rate of 35%. However, legal entities can reduce their tax burden by deducting recognised expenses, including depreciation, repair costs, utility bills, and intermediary fees. After deducting all expenses, the effective tax rate for companies can be reduced to 5–10% thanks to the tax refund system provided for by Maltese law.

Owners renting out property on a short-term basis must register with the tourist registry and obtain an MTA (Malta Tourism Authority) licence. Without this licence, renting out accommodation to tourists is illegal and may result in administrative fines. Owners must also pay an eco contribution of €0.50 per guest per night, up to a maximum of €5 per stay.

Rental income must be declared in tax returns, regardless of whether the owner is a Maltese resident. Foreign investors receiving rental income are subject to the same tax regulations as local owners. The rental agent or management company may withhold tax when transferring the income.

Thus, the main tax burden for short-term property rentals in Malta consists of a fixed tax of 15% for individuals and a standard corporate tax of 35% for companies, as well as mandatory contributions to the licensing system and tourist fees. This approach ensures regulatory transparency and encourages the legalisation of rental relationships in the tourist accommodation sector.

 Taxes on long-term property rentals in Malta

Income from long-term property rentals in Malta is subject to a simplified tax regime, making renting out property an attractive source of stable income. A special tax regime applies to individuals, providing for a fixed rate of 15% on gross rental income. This tax is paid on the total rental income received, without the need to provide detailed records of maintenance or repair expenses. At the same time, the owner independently submits a tax return and pays the tax by the established deadline.

This regime only applies to properties rented for a period of more than six months and registered in accordance with legal requirements. Long-term rental agreements must be in writing and registered with the Housing Authority. Failure to register means the owner cannot apply the preferential rate and may be charged additional tax at the standard rate.

If a legal entity rents the property, the income is included in the company’s total taxable base and is subject to corporate tax at a rate of 35%. However, corporate structures can offset the costs associated with maintaining and servicing the property against their tax liability, which reduces their tax burden in real terms. When distributing profits among shareholders, part of the tax paid may be refunded and the effective tax rate is reduced to between 5% and 10%.

Foreign property owners who are not tax residents of Malta are taxed at the same rates as local citizens. Rental income must be declared and, when using the services of a management company, tax may be withheld at source.

In addition to tax obligations, landlords are responsible for paying utilities, property insurance, and if necessary, administrative fees for maintaining the residential complex. Rental agreements for long-term stays are not subject to tourist tax, which only applies to short-term rentals.

Thus, Malta’s tax system creates favourable conditions for property owners who rent out their properties on a long-term basis. The application of a fixed rate of 15% makes the taxation process simple and transparent, while the availability of flexible corporate mechanisms enables companies to optimise their tax burden when using real estate for investment purposes.

 Taxes on the sale of real estate in Malta

When selling real estate in Malta, a special tax regime known as Property Transfer Tax applies instead of the traditional capital gains tax. This tax is deducted from the sale price and constitutes a final payment, exempting the seller from any subsequent taxation on the proceeds of the sale.

The standard rate is 8% of the property’s sale price or market value, whichever is higher. This rate usually applies to properties purchased after 1 January 2004. However, certain exemptions and reduced rates apply depending on the length of ownership and the property’s intended use.

For example, if the property is sold within the first five years of purchase, the tax rate may be reduced to 5%. For a property used as a primary residence that is sold within three years of purchase, the tax rate is 2%. In cases of inheritance, gift, or intra-family transfer of property, the rate can range from 7% to 12%, depending on the original purchase date and the nature of the transaction.

When selling a property that has been owned and used as the owner’s primary residence for more than three years, tax may not be levied if the property is sold within one year of vacating it. Concessions may also be granted for the sale of restored properties in Urban Conservation Areas, provided that the owner has invested in the property’s restoration.

If the seller is a legal entity, the income from the sale is included in the company’s total tax base and is subject to corporate tax at a rate of 35%. However, thanks to the tax refund system provided for by Maltese law, the effective rate can be reduced to 5–10%, depending on the profit distribution structure.

The rules are similar for foreign investors: the tax rate is determined by the same principles as for Maltese citizens, regardless of tax residency. The tax is withheld by the notary or buyer at the time of the transaction and transferred to the tax authorities on behalf of the seller.

Thus, when selling real estate in Malta, the tax burden remains moderate and predictable. The flexible rate system takes into account the term of ownership, the purpose of the property, and the status of the owner, making Maltese jurisdiction advantageous for long-term investments and subsequent real estate sales with minimal tax costs.

 Taxes on the sale of real estate by individuals in Malta

The sale of real estate by an individual in Malta is subject to property transfer tax, which replaces capital gains tax. This is a final, fixed payment withheld from the transaction amount. This tax is calculated on the full sale price, unless the market value of the property is higher, in which case the market value is used instead.

The standard tax rate is 8%, which applies to all properties purchased after 1 January 2004. However, preferential rates are available under certain conditions relating to the length of ownership and use of the property. For example, if the property is sold within the first five years of purchase, the tax rate may be reduced to 5%. If the property was used as a primary residence and is sold within three years of purchase, a minimum rate of 2% applies.

Individuals selling real estate are exempt from paying tax if they have owned the property for at least three years and have used it as their primary residence, provided the sale takes place within one year of vacating the premises. Exemption is also possible when selling a property located in a historic heritage area, provided that the owner has invested in its restoration and received the necessary confirmation from the relevant heritage protection authorities.

If the property was inherited or gifted, a separate taxation procedure applies. In these cases, the rate can range from 7% to 12%, depending on the date of acquisition and the nature of the transfer. At the same time, heirs and close relatives (spouses, children and parents) can claim partial or full tax exemption when registering intra-family transactions.

It is important to note that individuals do not have the right to reduce the tax base by the cost of repairs, maintenance or improvements to the property — tax is levied on the full amount of the transaction. The notary withholds the tax at the time of signing the deed of sale and transfers it to the tax authorities, eliminating the need for subsequent declaration of income from the sale.

Thus, Malta’s tax system for individuals is simple and transparent: it has fixed rates and the possibility of benefits when owning a property for a certain period, as well as exemption when selling one’s own home. This makes real estate transactions understandable and predictable for private investors and homeowners alike.

 Taxes on the sale of real estate by a company in Malta

The sale of real estate by a company in Malta is subject to a different tax regime to that applied to individuals. In this case, the transaction is considered a commercial activity and any profit received is included in the legal entity’s taxable base.

The standard corporate tax rate in Malta is 35% of the profit received from selling real estate. However, tax is not calculated on the total transaction amount, but on the difference between the sale price and the documented costs of acquiring and improving the property. These expenses include the purchase price, notary and legal fees, repair and restoration costs, architectural fees, and administrative costs.

If the property has been on the company’s balance sheet for a long time and has been used for operating activities, the tax base may be adjusted to allow for depreciation. This reduces the actual amount of tax payable.

Malta’s corporate tax system provides a mechanism for refunding part of the tax to shareholders when profits are distributed. Depending on the company’s structure and the nature of its activities, investors can recover between 60% and 85% of the tax paid, reducing the effective tax rate to between 5% and 10%. This mechanism makes Malta one of the most competitive European jurisdictions for real estate transactions carried out through corporate structures.

However, if a company sells real estate that was used as an investment asset rather than as part of its core business, transfer tax may be levied at a fixed rate of 8% of the sale price. However, this only applies if certain conditions are met, and it is more common for passive investment companies than for developers.

Foreign companies registered in Malta are subject to the same tax rates and rules — the country does not distinguish between resident and non-resident legal entities if the property is located in Malta. At the same time, tax obligations arise when the transaction is registered with a notary, who is obliged to withhold and transfer the corresponding amount to the state budget.

Thus, when a Maltese company sells real estate, a rate of 35% is applied, with the possibility of subsequently refunding part of the tax paid — making the effective tax burden moderate. Thanks to its transparent structure and favourable tax refund mechanism, corporate real estate transactions in Malta remain one of the most rational instruments for international investors and developers.