St. Julians, Malta
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How to buy property in Malta: prices, associated costs, and sale-purchase contract

The Maltese real estate market contains luxury properties, including apartments, villas, castles, and palaces. In some cases, their price can increase by 18% per annum. We explain in detail how to select and buy property in Malta.

Buying real estate is one of the conditions attached to applications for a Maltese residence permit, permanent residence or citizenship for exceptional services by direct investment. Although investors also can rent real estate rather than buy it, buying a property can be a profitable investment.

Malta real estate investment: how much property costs and how to buy it

A feature of Malta's new residential real estate market is that almost all the properties are exclusive, luxury properties. They simply are not building anything else there at the moment. The cost per square metre ranges from €3,000 to €6,000 for new apartments in Malta. For example, a 220 m2 apartment located 2 km from the sea costs €740,000. Apartments that are a third of this size that are located next to the coast cost the same.

All new builds cost hundreds of thousands of euros, and investment in them allows you to participate in special government-sponsored property projects.

There are two residence permit programs for investors in Malta: temporary and permanent. Investors can also apply for Maltese citizenship by naturalisation for exceptional services by direct investment. You need to rent or buy real estate to participate in any of these programs. Some foreign investors prefer to buy a property rather than rent it to obtain a Maltese residence permit, permanent residence or Maltese citizenship and earn income from renting out the property and make a profit on its sale.

Cost of property in Malta

Maltese law allows citizenship by naturalisation for exceptional services by direct investment. In this process, the investor initially gets a residence permit and applies for citizenship a year or three years later.

To obtain a Maltese passport, an investor must undergo a strict Due Diligence check and fulfil three financial conditions:

  1. Buy a property worth at least €700,000 or rent a property for €16,000 per annum for five years.
  2. Make a non-refundable contribution of €600,000 to the National Development and Social Fund if the investor has been a residence permit holder for three years when they submit their citizen application, or a non-refundable contribution of €750,000 if the citizenship application is submitted one year after the investor became a residence permit holder.
  3. Make a non-refundable charitable contribution of €10,000.

The cost of real estate and applying for permanent residence. The government-sponsored Maltese permanent residence by investment program contains certain financial conditions, including buying residential real estate for at least €350,000 in the north of Malta or €300,000 in another region of the country or renting residential property for $12,000 or €10,000 per annum, depending on the area in which it is located.

The cost of real estate and a residence permit. To obtain a Maltese residence permit by investment, you need to buy a property worth €275,000 or €220,000 or rent a residential property for €9,600 or €8,750 per annum, depending on the region.

Real estate price growth in Malta

Housing prices in Malta are rising faster than in the EU. In the five years leading up to 2020, prices increased by 25%. According to the Malta Developers Association, prices rose 5-9% in 2020 alone, despite the pandemic.

The graph below shows that Maltese real estate is a liquid asset growing in value. At the development stage, apartments in business-class residential complexes are sold out in 1-1.5 years. The price difference between the construction stage and commissioning ranges from 18 to 25%.

Buy property in Malta: cost of an apartment in Malta
Maltese residential property price index in %, 2015 = 100
Source: Eurostat, 2021

Selecting real estate to buy in Malta

Apartments in SDA complexes are most in-demand among foreign investors, especially as foreigners cannot simply buy any property in Malta: special permits are required. As a result, business-class residential SDA complexes were built for foreigners next to the coastline with their infrastructure. Foreigners can buy them without applying for a special permit.

Apartments in an SDA complex

Malta property investment: apartments in a five-storey SDA complex

Apartments in a five-storey SDA complex with an area of ​​115 m2 cost €225,000 at the start of construction

The apartments will be rented out partially furnished, with air conditioning

Property in Malta: apartments in a five-storey SDA complex

The complex consists of 29 apartments, each with two or three bedrooms with double beds, one or two bathrooms, and a verandah

Buy property in Malta: apartments in a five-storey SDA complex

Residential complex on the coast in Marsascala, Malta, just 500 metres from the sea

Villas close to the beaches, especially in the resorts of Sliema and St. Julians, are also attractive to investors and cost more than 1 million euros. In terms of their price, they are suitable for investors applying for Maltese citizenship or residence permits. However, a foreign buyer needs to obtain permission and pay a special tax, pushing the price per square metre 20-50% higher than comparable apartments in an SDA complex.

In which region is it advisable to buy a property in Malta?

Regions of Malta: where is it advisable to buy real estate?

The north of Malta is more developed than the rest of the country. The high density of coastal development ensures that properties are always linked to a modern infrastructure system. There is little chance of buying a property in the north of Malta, even in a small town, without adequate infrastructure.

St. Julian's, Sliema, Mellieha, Aura, Marsascala, Pembroke, and Kalkara are all coastal towns that have expanded into one another. Each town has its schools, public transport facilities, marinas, shops, restaurants, and medical clinics.

The south of Malta and the island of Gozo have a less well-developed infrastructure. Investors interested in high-value real estate rarely choose these areas.

Buy property in Malta for rent

Many investors buy real estate to rent at 3 to 5% of the purchase cost per annum. There is strong demand from tenants to rent apartments ranging from 75 to 120 m2, designed for a family of three or four people.

These apartments have two or three bedrooms and at least two bathrooms. They also have a spacious living area combined with an open plan kitchen and dining room and a terrace. There is more than enough space on the terrace to spend the evening with your family and a couple of guests.

Apartments that are sought after by tenants

Malta real estate investment: apartments in Zabbar

Apartments of 80 m2 cost €185,000

Buy property in Malta: apartments in Zabbar

One bedroom apartment with two bathrooms and a terrace. For an additional fee, you can also buy a garage

Buy property in Malta: apartments in Zabbar

Five-storey residential complex consists of 14 apartments: two maisonettes, nine apartments, and three penthouses

Malta real estate investment: apartments in Zabbar

The apartments are located 4 km from the sea ​​and 7 km from the airport

How much do villas in Malta cost?

Investors who want to buy a private, secluded residence for their family and live quietly without interference from noisy neighbours prefer to buy a villa. It is difficult to estimate the average cost of a villa, as it depends on how close it is to the sea and its size and how comfortable it is to live in.

In popular resorts, houses with three bedrooms and city views cost €500,000 to €950,000. A house with 2-3 bedrooms in a town not oriented toward tourists costs €200,000 to €400,000. Villas with 5-6 bedrooms at some distance from the sea cost at least €1,000,000 and those with sea views cost at least €1,500,000.

Malta real estate investment: villa
Villa with two bedrooms located 2-3 km from the sea costs €500,000

Elite villas in Malta. Elite villas in Malta can be priced at €10,000,000. The architecture of these villas is beautiful, and they have an area of ​​2500 m2. They are located near the sea, usually at about 100 m. These villas often have four to six bedrooms and bathrooms, two or three storeys, a large private swimming pool, and an orange garden. Of course, the price includes ownership of the surrounding area, a private marina for a yacht, and a breathtaking view of the sea.

How much do castles and palaces cost in Malta?

The mild climate in Malta has helped keep castles from the 16th century and palaces from the 18th century in a perfectly preserved state. Before being sold, they are renovated and modernised to elite standards, while at the same time, their original architectural features are maintained. The interiors of these forts and castles combine modern comforts and conveniences with their original architectural beauty.

These castles and palaces are lower than the cost of new luxury villas. On average, those with sea views are sold for 4 million euros. Their living area can be as large as several thousand metres, they are built over 3-4 storeys, and have 10-15 rooms. These castles and palaces also have a landscaped area on their territory. 

Malta property investment: palaces and castles
Fort Ricasoli in Kalkara is not for sale: it is a historical site that is protected by the state. However, there are similar forts that are for sale.

Mortgages in Malta

Although foreigners are allowed to take out mortgages from a Maltese bank, real estate purchased with a mortgage does not meet the conditions of government-sponsored residence permits and permanent residence programs in Malta. If a foreign investor plans to purchase real estate and participate in the program, they must buy the property with their own money.

Mortgages can be issued to foreign buyers by Maltese banks under the following conditions:

  • the investor must be between 21 and 65 years old;
  • the loan can be up to 70% of the appraised value of the property;
  • the investor must pay a downpayment equivalent to at least 30% of the property value;
  • the mortgage cannot be issued for a period longer than 35 years;
  • the annual interest rate is 4.5-5%.

Taxes that arise when buying and selling property in Malta

The owner must pay taxes on the purchase and sale of the property and annual tax on the land on which it is located. You must also pay tax on the rental income if you rent out the property.

Associated costs when buying real estate in Malta. In addition to the price agreed for the property, the investor must pay the following fees and duties.

Property tax
only needs to be paid once at the time of signing the contract of sale
5% of the property value
Stamp duty
It depends on the area where the property is located
2—7% of the property value
Notary fee1—2% of the property value
Agent's fee1—2% (+18% VAT) of the property value
Permit to purchase a property, AIP.  
If the property is located in a CDA complex, no permit is required
€350
Architect's confirmation that the property complies with the regulations€300

For example, if you buy an apartment for €700,000, the associated costs will be approximately 7—15% of the property's price, and the total cost will be €851,000.

Taxes on real estate that is gifted or inherited in Malta: no tax is charged. But in some instances, there is a state fee and capital gains tax on the inheritance of immovable property. In particular, in the event of the owner's death, his heir is obliged to pay tax on the transfer of property and real estate at that time.

Tax on rental income: 15% of the rental amount.

Tax on the land on which the property is located (land rent). When an investor acquires a real estate, but rents land around it, they pay the land's rent of €40-250 per year. If investors also buy land around the property, they must pay a flat amount of "land rent", equivalent to 20 land rents.  

If the property's previous owner purchased the land around the real estate and then paid tax on it, the new buyer must buy the land from him by payment of the equivalent value of the land rent.

When selling real estate: the seller pays a capital gains tax of 8% of the sales price or the market value, whichever is higher. 

If the property was owned for non-residential purposes, the tax would be:

  •  5% of the total value if the property has been owned for less than 5 years; 
  •  8% if the property has been owned for more than 5 years; 
  • 12% if the property has been owned for 10 years or more.

If the property has been purchased for residence, as stated in the sales contract, and has been owned for 3 years, stamp duty is not payable only by the purchaser when selling the property. If the property has been owned for less than 3 years or if the property is not residential, 5% stamp duty is payable by the owner.

The process of buying real estate in Malta

A sale and purchase transaction takes one to two months to complete in four stages. Although an investor can independently purchase property in Malta, we recommend using the services of a lawyer when buying real estate. Immigrant Invest’s lawyers are also qualified and experienced in such transactions and can ensure that it is legally valid and there are no “hidden” conditions attached.

1
1—2 weeks
Selection of property
Preliminary written agreement of terms and price prepared by investor’s lawyer
2
1 week
Preliminary contract
Signing an agreement to reserve the property and payment of 10-15% of the price agreed
3
6—12 weeks
Permission received
Permission is not required to buy property in an SDA-complex
4
1 week
Sale-purchase contract
Payment of the remaining 85-90% of the property's price. The buyer and the seller receive notarized copies of the contract

1. Selection of property. The investor selects a property from the properties they had previously chosen as potentially suitable properties. The investor's lawyer then contacts the property owner's lawyer and formally informs them of their client's interest in buying the property. After receiving a positive response, the two parties can start negotiating the price and terms of the sale, also exclusively in writing. All negotiations must be documented.

2. Preliminary contract. When the buyer and seller agree on the price, a preliminary contract needs to be signed and the buyer must make a downpayment of 10 to 15% of the price agreed.

The preliminary contract specifies the obligations of the current owner and the buyer and the details of the property. At this stage, the buyer can apply for a mortgage.

However, taking out a mortgage means that the buyer cannot use this property to participate in Malta's government-sponsored residence permit and permanent residence programs. Properties bought with a mortgage do not qualify for citizenship by naturalisation for exceptional services by direct investment..

3. Obtaining permission. The preliminary contract is valid for three months. During this time, the legal validity of the transaction is checked. The buyer or their lawyer also receives permission to purchase the property selected from the Ministry of Finance of Malta. However, this permission is not required for properties in an SDA complex.

4. Sale-purchase contract. After checking all outstanding points in the contract and obtaining permission (if required) the parties sign the sale-purchase contract. The investor pays the outstanding balance of the purchase price by transferring it to the account of the notary acting as an intermediary.

The buyer and the seller both receive a notarized copy of the agreement. The original contract is stored in the National Archives of Malta.

Buying a property and moving to Malta

Some investors buy a property in Malta to spend several months of the year there. For example, when their child is taking a course at a local language school or to spend the winter in Malta. As a result, the purchase of real estate is often combined with obtaining a residence permit or second citizenship.

Benefits for an investor who buys a property in Malta and applies for a residence permit or citizenship:

  • a high-yield investment, as real estate prices in Malta are increasing rapidly;
  • visa-free entry to the Schengen countries for Maltese residence permit holders and visa-free entry to 186 countries, including the United States and the United Kingdom, for Maltese citizens;
  • the ability to travel to Malta even when tourists with a valid visa are not allowed to enter, for example, during a pandemic;
  • an opportunity to live in a country with a high standard of living and a developed healthcare system;
  • a European education for children;
  • the magnificent Mediterranean climate means that you can take a holiday there all year round;
  • open accounts in European banks and keep savings in hard currency;
  • optimal and transparent conditions for international business.

Frequently asked questions

How much does residential property cost in Malta?

The residential real estate market in Malta is an elite market and all new builds are classified as business class. A one-bedroom apartment costs at least €150,000.

An apartment with two bedrooms and two bathrooms in a new residential complex near a beach costs about €700,000.

The most expensive properties are luxurious villas with private swimming pools and piers costing about 10 million euros. A modern villa at a distance from the sea can be purchased for 1-3 million euros.

In Malta, you can also buy a castle with 10-15 rooms with a plot of land attached to it for a third of the price of the most expensive villas.

How profitable is it to invest in residential property in Malta?

Property prices in Malta are growing at an average rate of 5% per annum, faster than the average price growth rate in the rest of the European Union. Furthermore, the price of apartments in the new SDA complex can increase by 18% per annum.

Where are the best regions to buy property in Malta?

If your main goal in buying a property is to acquire a liquid asset whose value is rapidly increasing, we recommend you look for a property in the northern part of Malta

The best beaches and promenades are concentrated there and the infrastructure is well developed. There are many ferry crossings, shopping centres, markets, schools, universities, medical institutions, and restaurants in the north. Northern Malta is considered the more attractive part of the island.

However, for those looking for privacy, the south of Malta and the island of Gozo are better suited. Real estate prices in these areas are about 25% cheaper than in the north of Malta.

How quickly can you buy a residential property in Malta?

For a foreign buyer, the execution of a purchase and sale transaction can take up to four months. Most of this time is spent obtaining a special permit to purchase a property from the Ministry of Finance of Malta, which generally takes 6 to 12 weeks.

It is easier for foreign investors to purchase a property in SDA complexes. These are special business-class condominiums in which foreigners can buy apartments without having to ask permission from the Ministry of Finance. In this case, a property can be purchased in about two months.

What are the benefits of buying real estate in Malta for an investor?

The investor is effectively buying a liquid asset. If they rent out the property, they can earn a rental income of 3 to 5% of the property price per annum. Furthermore, real estate value can easily increase by 25% over five years

Having invested €1,000,000 in five years, the investor can receive €250,000 in rental income and sell the property for €1,250,000: a return of €500,000 or 50% over five years.

An additional potential advantage for investors in Maltese real estate is that it gives them the option to participate in government-sponsored residence permits and permanent residence programs. Participating in these programs requires the applicant to buy or rent a property

In order to be eligible to participate in the residence permit program, the property must cost at least €275 000 in the north of Malta or €220 000 in the south or on the island of Gozo. In order to participate in the residence permit program, the value of the property must be at least €350,000 in the north and €300,000 in the south or on the island of Gozo.

Investors can also apply for Maltese citizenship by naturalisation for exceptional services by direct investment. In this case, the property must be worth at least €700,000. 

Can foreigners buy property in Malta?

There are some restrictions on property purchases by foreigners in Malta, including those from European Union countries. As a rule, they are only allowed to buy one property. An exception is EU citizens who have lived in Malta for at least 5 years before purchasing the property. 

In order to buy a property, the foreigner must obtain a permit or AIP, which the Ministry of Finance grants, and the process usually takes 6-8 weeks.

However, these restrictions do not apply to properties located in luxury SDA complexes.

How much is property tax in Malta?

Property purchasers in Malta pay a one-off purchase tax, stamp duty and special charges. Together, the associated costs will amount to between 8% and 15% of the value of the purchase agreement.

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How to buy property in Malta: prices, associated costs, and sale-purchase contract