After undergoing the Due Diligence check at the Residency Malta Agency, the government department responsible for the permanent residence program, and being preliminarily approved, the investor needs to rent or buy a property as specified in the program.
Conditions for renting and buying a property when applying for Malta permanent residence by investment:
- The residential property price should be at least €300,000 in the south of Malta or on the island of Gozo and €350,000 in the north. In the north, numerous resorts and a better-developed infrastructure result in higher property prices and a more liquid real estate market.
- In our experience, quite a few investors prefer to buy apartments and villas in resort complexes in the north of the country. After five years, the property can be sold, and the initial investment recovered. For those who select the option of renting a property instead of buying one, the minimum annual rent for a property in the south of Malta or on the island of Gozo is €10,000 and €12,000 in the north.
The investor must provide the program department with a rental agreement for at least one year. However, to maintain their permanent residence cards, investors need to continue renting a property as specified in the agreement for the first five years of permanent residence. Therefore, many participants who choose to rent the property immediately rent an apartment or a villa for 5 years.
Renting a house is much simpler and faster than buying one, as it can be rented in 2 weeks, whereas buying one can take up to 3 months. Investors who need to become permanent residents quickly prefer to rent so that they can fulfil the program conditions faster and complete the process.
In some cases, investors decide to change from renting to buying a property in the initial five-year period after being granted permanent residence. It is also permissible.
Searching and renting a property yourself
Investors can look for and rent property on their own. Sometimes, an investor has acquaintances who are experienced in renting suitable residential properties and rents an apartment through them. However, investors who do not have such acquaintances and plan to look for an apartment via the Internet should consider the following points.
Visit the property first. Photographs do not always correspond to reality; if an investor plans to move to Malta and live in an apartment, they should see it in person before signing a contract rather than signing an agreement based on photographs on the Internet.
If the applicant remains without a registered residence address for even one day in these five years, they may have their Maltese permanent residence revoked.
Head of the Maltese office, lawyer
Rental terms. In Malta, finding and renting an apartment for a short trip is easy. However, according to the terms of the investment program, the rental contract must be concluded for at least one year.
For the first five years after getting a permanent residence, the investor must submit a special form to the government once a year that confirms that all the conditions specified in the program, including the rental of a property, are being met.
Price. Some owners inflate the rent they are asking, knowing that the tenant is not local and unfamiliar with the local real estate market. To avoid this, you need to study the market and know local real estate prices.
Renting a residential property in Malta through a realtor
If you decide to rent a residential property through a real estate agent in Malta, you need to pay attention to the contract terms, including the small print.
Termination of a contract. For example, some owners prefer to sign a contract for 3 years as it is more convenient for them. However, if you do not have the opportunity to come and see the apartment in person before signing the contract, it is especially risky to enter into a relatively long contract based on photographs.
In any case, you should carefully study the terms of termination of the contract in order to understand your rights and obligations in the event of early termination of the contract or some other dispute.
Our client Alex signed a contract with a real estate agent in Malta without closely examining the terms on which the contract could be terminated. After 4 months, the agent asked Alex to move out of the apartment within two weeks, as the owner had decided to sell it. Under the contract terms, the owner had the right to do so.
Alex then had to urgently find a new apartment that met the conditions stipulated in the permanent residence program. Otherwise, his Maltese permanent residence could have been revoked.
We helped Alex cope with the problem. We found a suitable apartment for him to rent and registered him at his new address so that his permanent residence was not affected.
Head of the Maltese office, lawyer
Protect your deposit. A deposit equal to one month's rent is usually payable at the beginning of the tenancy together with the rent. Make sure that the conditions for returning the deposit are clearly stated in the contract, including the circumstances and the deadline by which it must be returned. Otherwise, you may lose your deposit.
Rent is paid directly to the owner. Agents or real estate companies are not responsible for receiving rental payments. It means that you must pay the owner directly. If an agent or rental company asks you to transfer payment through them, you should not do so.
Paul participated as an investor in a Maltese permanent residence program and rented a residential property through an agent he found. The agent asked Paul to pay the rent through his bank account without revealing the bank details of the owner. It made Paul suspicious, and he found the owner on social media.
It turned out that the owner had not been receiving the rental payments promised by the agent and wanted to terminate the contract with the agent as soon as possible.
Paul then contacted us, and we helped him quickly find a suitable apartment that met the conditions specified in the program and sign a legally valid rental contract. Two days later, Paul was registered at that address as the tenant.
Head of the Maltese office, lawyer
What do Special Designated Areas (SDA) in Malta mean?
An SDA is a status that the Maltese government grants to residential and business property projects. Citizens of the EU and other countries can buy property in SDA complexes under the same conditions as Maltese citizens. It means that no pre-approval is needed when purchasing a property.
SDA properties are located in some of the most attractive locations in Malta. SDA complexes offer a wide range of properties, from studio flats to villas. Owners or tenants of properties in SDA complexes enjoy security, swimming pools, landscaped gardens and underground parking.
List of SDA complexes in Malta regions
|Region of Malta||SDA complex|
|St. Julians||Portomaso Development plus Extension IPender Place and Mercury House Site, plus Extensions I, II, III, IV, and V|
|Gozo, Ghajnsielem||Fort Chambray|
|Gozo, Marsalforn||Vista Point|
|Gozo, Mellieha||Tas-Sellum Residence Southridge Mistra Heights|
|Gozo, Triq ir‑Rokon||Kempinski Residences San Lawrenz|
|Gzira||Manoel Island Metropolis Plaza|
|Madliena||Madliena Village Complex|
|Marsaskala||Ta' Monita Residence|
|Mriehel||Quad Business Towers|
|Sliema||Fort Cambridge Zone Tigne Point|
The advantages of buying property in SDA complexes in Malta
Buying property in SDA complexes in Malta can be a successful investment, regardless of whether the property is intended to be residential or rental.
The property purchase in SDA does not require AIP permits, irrespective of the buyer's citizenship. Under Maltese law, property outside the SDA requires the purchaser to obtain an AIP permit.
It takes 2 to 3 months to buy a property in an SDA. The time required to purchase a non-SDA is 4—6 months. It saves the buyer at least half the time.
Properties in SDA complexes can be rented out and generate rental income. Rental property in Malta is taxed at the rate of 15%. If a property is purchased through an AIP permit in Malta, it cannot be sublet.
property in Malta
The investment yield is higher. A buyer can buy several properties in SDA complexes. The liquidity and profitability of these smaller properties are higher than that of a single, more expensive property. In comparison, investors can only buy a single property if they buy properties other than SDAs.
Property prices in SDA complexes are rising on average twice as fast as prices in non-SDA complexes. On average, properties in SDA complexes purchased during the construction phase increase in price by 9%. In comparison, property prices in non-SDA complexes are rising by 3—5% on average.
Opportunities to obtain permanent residence in Malta. Buying a property in an SDA in Malta also helps investors qualify for a residence permit, permanent residence permit and citizenship in Malta if the conditions are fulfilled.
How Immigrant Invest can help to select Maltese property and obtain a permanent residence permit
Immigrant Invest is a licensed agent of the Maltese permanent residence by investment program. Although we do not find properties for our clients ourselves, we advise our clients to contact our partner real estate agents or give them details of properties from their database.
Once the investor finds a suitable property, our lawyers, who are experienced in international and economic law, check that the transaction and the sale-purchase contract are legally valid.
Immigrant Invest’s role in a property sale-purchase or property rental transaction:
Step 1. Preliminary selection of properties. We send the investor information on several suitable properties from the database of our partner realtors based on the criteria specified by the investor or ask the investor to contact our partner real estate agent directly. For example, if an investor wants to rent a two-bedroom apartment within walking distance of the sea, they choose one or more of the options sent to them for further consideration.
Step 2. Final selection of the property. If the investor does not have the opportunity to view the recommended properties in person, our representatives in Malta prepare a video and photographs of the properties for the client and discuss the pros and cons of each property.
At this stage, the investor usually narrows down the choice to one or two properties and travels to Malta to inspect them in person. Immigrant Invest helps organise the trip and our employees and partners take the investor to the properties to help them decide.
When the investor selects the property they want to rent, we prepare the rental contract.
Step 3. We check the legal validity of the transaction and prepare the rental contract. Immigrant Invest's lawyers support the transaction in every possible way. They check the rental agreement and ensure that it contains the provisions required to protect the investor's interests.
We prepare an inventory of the property before the investor moves into it. We change the notice period for terminating the rental contract if it does not suit the investor. We study the contract thoroughly so that the investor will not face any surprises later on.
When we have prepared and checked the rental agreement, the investor and the owner sign it.
Step 4. We acquaint our client with the owner of the property. It simplifies the lines of communication and makes it easier to resolve everyday issues as they arise.
If any unexpected problems arise, we are always available and prepared to help resolve them.
Maria and her husband Alex were lucky: the owner of the apartment they were renting was extremely helpful and kind. She had prepared everything in advance for their first visit to Malta. She had cleaned the apartment, placed fresh towels in the bathroom, put out clean bed sheets, turned on the water heater and air conditioner, and brought drinking water and some food. She did all this out of goodwill and kindness even though she had no obligation to take care of these little details.
The couple resolves any domestic issues with the hostess directly; however, if required, we are always there to help.
Head of the Maltese office, lawyer in international and economic law
When choosing an apartment, if we see that the owner is not helpful, we let the investor know about this and recommend looking for a different property.
We discuss the costs incurred by property owners and tenants in Malta in our article “Maintaining real estate in Malta: costs and features”.
Obtaining Malta’s permanent residence permit. Purchasing real estate worth 350,000 € or more allows property buyers to apply for Malta Permanent Residence Program. Property can be sold after 5 years.
Immigrant Invest lawyers compile a list of required documents and help the investor prepare them. The lawyers compile the investor’s welfare history, translate documents into English, certify copies through a notary and correctly fill out application forms. The lawyers apply to the Residency Malta Agency when the documents are ready.
Due Diligence is a mandatory step in the Malta Permanent Residence Program. Its results define whether the investor will get the status or not. Immigrant Invest has its own Compliance Department. Its preliminary Due Diligence reduces the rejection risk to 1%.
How to avoid problems when buying or renting a property in Malta
You can find and rent a property in Malta on your own or through a real estate agency. In both cases, you need to pay attention to the wording and terms of the contract, the conditions under which a rental contract can be terminated, and the terms of the financial calculations. It is also important to get to know the landlord.
We put investors in touch with reliable real estate agencies, check all the legal aspects of the transaction, inspect the apartment together with the investor, and help resolve all issues on the spot.
If a foreign investor plans to buy a property, they need to consider the restrictions that apply to foreigners. We discuss them in our article "Property in Malta for investors: where to buy and on what terms".
Buying and renting a property in Malta: taxes and fees
When buying a property, in addition to the price, the buyer has to pay the following taxes and fees.
|Property tax||5% of the property value|
|Stamp duty||2—7% of the property value|
|Notary fee||1—2% of the property value|
|Agent's fee||1—2% (+18% VAT) of the property value|
|Permit to purchase a property, AIP||€350|
|Architect's confirmation that the property complies with the regulations||€300|
Property tax is payable only once upon signing the contract of sale. There is no annual property tax in Malta like in other countries.
Stamp duty. Its amount depends on the area where the property is located and is usually 5%. The buyer pays 1% of the stamp duty when signing the contract of sale and the remaining 4% when drawing up the deed of property transfer.
A property permit fee, AIP, is charged when buying a non-SDA property. Otherwise, no permit is required.
Agent's fees are payable if the buyer purchases the property with the agent's assistance. Otherwise, you are not required to pay the fee.
If the property is rented out, the owner pays tax on rental income — 15% of the rental value.
Frequently asked questions
The Maltese government allows citizens of other countries, including the European Union, to purchase only one property in Malta. A permit will be required to purchase the property. There are no restrictions on the purchase of property for Maltese citizens and EU citizens who have resided in Malta for at least 5 years before the property’s purchase date.
Yes, you can. Buying or renting Maltese property allows you to apply for residency, permanent residence and citizenship by naturalisation for exceptional services by direct investment in Malta.
Yes, it is. Property prices in Malta are rising by 3—7% a year. Malta’s average price growth rate is higher than in many European countries. The property price in the new SDA complex can increase by 18% a year.
Buying or renting Maltese property allows you to apply for residency, permanent residence and citizenship by naturalisation for exceptional services by direct investment in Malta.
The property tax rate in Malta is 5% of the property’s value. Property tax is payable only once upon signing the contract of sale. There is no annual property tax in Malta like in other countries.
A foreign buyer can take 4 to 6 months to complete the sale. Most of this time, 6 to 12 weeks is taken to obtain a property permit.
It takes 2 to 3 months to buy a property in an SDA. It saves the buyer at least half the time.