Real maintenance in Malta: Ultimate Guide

1. Citizens of other countries, including the European Union, are usually allowed to buy only one property. The only exceptions are EU citizens who have lived in Malta for at least 5 years before the date they purchase the property.

2. A foreigner needs to obtain permission or an AIP permit to purchase real estate. The Ministry of Finance issues it, and the process usually takes 6‑8 weeks.

3. Only residential property can be rented out.

However, these restrictions do not apply to real estate located in special designated areas (SDAs), containing luxury complexes with their own infrastructure. Buildings in SDAs include a closed courtyard, a swimming pool, a gym, security, and sometimes a garden.

Foreign investors often prefer to buy property in SDAs as the process is simpler, faster, and more profitable:

• there are no restrictions on the number of properties bought or rented out;

• an AIP permit is not required;

• the property can be registered in the name of an individual and in the name of a company, which is challenging to do with properties outside the SDAs.

It is more profitable to buy real estate in an SDA than in other areas. The demand for housing in SDAs is constantly growing, their prices increase even in the construction stage, and the sale-purchase transactions are processed faster, in about two months instead of four to six months. Moreover, foreign investors are not restricted to one property but can buy any property.

Electricity and water bills. There are several different rates that apply, depending on the number of people living on a property — the more people registered at an address, the lower the utility costs. As a result, a family of three can pay almost half as much as a single-tenant who consumes the same amount of water and electricity. The bills are based on individual metre readings.

There are also monthly quotas that should be observed. If they are exceeded, the tariffs increase sharply. Tariffs in commercial buildings are twice as high as in residential properties.

Metres are located outside apartments, usually in a separate room on the ground floor. Inspectors sent by the utility companies take readings.

The average cost of electricity and water in an apartment is €100‑120 per month, and in a small house or villa, it is about €200 per month.

There is no central heating or hot water. Instead, air conditioners and heaters are used for heating and boilers for water. Each apartment has its own water tank on the roof. Water from the central water supply first enters the tank, is heated there, and only then enters the apartment.

No domestic gas networks. Gas can only be bought in cylinders for heating and cooking. A 15 kg gas cylinder costs €19.5 and is sufficient for 2‑3 months of cooking for two people. Most families use electric stoves.

Maintenance of the property and common area of the building. Maintenance costs for the lift, cleaning, repairs, security and swimming pool are paid once a year. For small buildings, the amount is determined at a general meeting of residents (housing committee), while for large residential complexes, it is set by the management company. The specific amount depends on the region, the type of property and its size, and the presence of a swimming pool and/or a garden. On average, it is €100‑150 per annum per property, and for elite properties, €500‑1000.

Garbage is collected free of cost; the state pays for the service. All waste must be sorted into categories: paper, plastic, glass, and metal. Items to be recycled must be clean, dry, and free of food debris. The main waste processing company in Malta is WasteServ Malta.

Garbage is usually collected once a week, and glass is once a month. Bags are simply left on the road in front of the house.

Internet, TV, and phone. Malta’s main providers are Melita, GO, and Vodafone. All three offer package deals that include internet, TV, unlimited calls, and mobile data. The cheapest tariffs cost €20 per month, and package offers for the whole family range from €50 to €100.

Cost examples. Utility prices depend on the area, size, and type of property. The difference in the cost of bills for a small apartment in different regions of Malta can amount to several dozen euros, and for a house, it can reach several hundred euros. For example, utilities for an apartment of 85‑150 m² in Sliema or St. Julians is €80‑150; for apartments in SDAs, €450+; and for villas or houses, €500‑1000.

Real Estate in Europe: Prices, Taxes and Maintenance Costs

If a residential property is empty, the owners should inform the relevant government department in writing. In this way the metre readings will be recorded just once a year and there will be no need to pay bills every two months.

Individual cost calculation for Maltese citizenship

Get the cost calculation

Automated Revenue Management Services (ARMS) owned by Enemalta and WSC, carries out utility bill management in Malta.

Most water and electricity metres are read twice a year, but bills are usually issued every two months. Customers can request an invoice at any time, check their billing history, or pay an invoice on the ARMS website. Water and electricity usage is charged through a single bill.

You can pay bills by credit card, check by mail, at suppliers' offices, or at ATMs. The payment must be made within 15 days of the invoice date, although no fines or penalties are charged as long as the bill is paid within 45 days. In case of non-payment, there is a penalty of €35 and a fine of 6% per annum.

If you do not plan to live in the property you purchased, you can conclude an agreement with a management company to monitor it, pay bills on your behalf, or rent it out.

Enemalta Corporation supplies electricity and bottled gas, Water Services Corporation (WSC) supplies all of Malta’s water and wastewater, and Liquigas and Multigas supply gas.

George, 32

A businessman from Ukraine

Permanent residence in Malta: common-law marriage

George and Catherine dreamed about obtaining status in the European Union and relocation, but there were two nuances. ⁠

Firstly, the couple lived in an unregistered marriage, and they had to prove their relationships to participate in the investor’s program. Secondly, both of them had children from previous marriages and wanted to acquire legal status in the EU for them as well.⁠

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The owner must pay taxes when buying or selling a property and an annual tax on the land on which it is located. Rental income is also taxed.

Taxes in Malta

Taxes payable when buying or selling a property:

1. Stamp duty: 5% of the property value (2% in Gozo).

2. Notary fee: 1 to 2% (+18% VAT) of the property value.

3. Agency fee: 1% (+18% VAT) of the property value. This commission must be paid to a private agent if they helped find the property. If the property was found through a registered agency, the seller would usually pay the fee.

4. AIP permit (if needed): €233.

The payment of stamp duty can be avoided by current and former spouses, widowers, and heirs of a deceased spouse.

Until the end of 2021, the stamp duty rate was reduced to 1,5% on €400,000 of the cost of the property and 5% on the remaining part of the property cost. This was one of the economic stimulus measures taken during the coronavirus pandemic.

Annual property tax: not charged in Malta.

Tax on the land on which the property is located (ground rent). When an investor buys a property but rents the land around it, they pay the land’s ground rent of €40‑250 per annum. When investors also buy the land around a property, they need to pay a one-time "ground rent" equivalent to 20 ground rents. If the previous owner of the property bought the land around the property and paid tax on it, then the new buyer must purchase the land from them by paying them the equivalent ground rent value.

Taxes on real estate that is gifted or inherited in Malta: there is no tax charged.

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

When selling real estate: the seller pays a capital gains tax of 8% of the sales price or the market value, whichever is higher. Until March 2021, this tax had been reduced to 5%, provided that the property had been owned for at least 5 years.

In some cases, the capital gains tax is charged at lower rates. For example, if you bought a property in Valletta before December 31, 2018, and restored it, the rate is 5%; if you sell your only property less than 5 years after purchasing it, the rate is 5%; and if you sell your only property less than 3 years after buying it, the rate is 2%.

There is no capital gains tax in the cases given below and in several other specific cases.

• transfer property to your spouse, children or grandchildren;

• donate it to a charitable organisation;

• resell the property to your own company.

The Government of Malta has entered into double tax treaties (DTTs) with several other countries. A DTT is created between two countries which defines the tax rules concerning tax residents of both countries.

The provisions of the DTT between Malta and other countries affect the following investors:

• they are tax residents of Malta and receive dividends or interest from foreign companies;

• they are tax residents of another country that has signed a DTT with Malta and owns a Maltese company.

The insurance costs depend on the type and size of the property and the value of the property. On average, it costs €100‑200 per annum for an apartment with several bedrooms or €500 for a house.

A property can be insured against robbery and any accident, for example, fire, floods, earthquakes, and broken water pipes.

The sum insured must reflect the value of all movable property in the insured apartment or house and not the property’s market price. In other words, the insurance should cover the cost of new furniture, appliances, doors, windows, solar heaters, air conditioners, alarms, etc.

Amir, 47 years old

Car dealership owner

Extending a Malta residence permit a year after getting it

Amir and his family moved to Malta under the Malta Global Residence Program. The family received a residence permit by investment in Malta. A year later, they now have to renew it.⁠

Two months before the expiry date of the residence permit, Immigrant Invest’s lawyers called Amir and reminded him that it was time to renew his family’s residence permits.⁠⁠

We then helped Amir and his family extend their Maltese residence permits before expiry.⁠

⁠

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⁠

We calculate the cost of maintaining an apartment in Valletta and a villa on the coast. This calculation assumes that the owner lives on the property.

Most Maltese live in their own apartments or houses. Housing is rented mainly by foreigners and young couples. Villas and houses are often bought, as renting them are not as profitable. Renting a villa with several bedrooms costs €8,000‑10,000 per month, while buying one costs at least €500,000.

Malta is divided into 5 administrative regions: Gozo, North Malta, Central Malta, Southeast and South Malta, and the capital Valletta.

Central and Northern Malta are the most popular regions. Most often, foreigners buy property in the island’s centre: in Sliema and St. Julians. Most of the SDA complexes are also located here. However, real estate prices here are also the highest in Malta: renting an apartment costs €600 to 2,000 per month. In cheaper areas, such as St. Paul’s Bay, Bugibba, Marsaskala, and Birzebbuga, apartments can be found for €500.

A three-room apartment by the sea in Sliema costing €300,000 can yield rental income of about 7% per annum. Similar apartments in Gzira or St. Paul’s Bay worth €200,000 can be rented out for a yield of at least 5%. However, the same yield can be obtained by buying a two-room apartment for €110,000 in San Gwann. Apartments in Marsaskala costing €150,000‑180,000 can be rented out for a yield of 4% per annum.

Features of the contract and the rental process. Rental contracts in Malta are mandatory.

The tenant also pays a deposit equal to one month’s rent to cover unforeseen costs and any damage caused to the property by the tenant through neglect and another deposit to cover unpaid utility bills. Deposits are returned, net of any outstanding bills or costs of repairing damage attributable to the tenant, on the day the rental contract is terminated.

Costs related to renting a property. There are no additional costs, apart from the rent, related to renting a property. However, you have to pay for their services if you are renting through an agency. Usually, this is half of one month’s rent plus 18% VAT.

The landlord or the tenant can pay utilities in Malta, depending on your agreement. Most often, for short-term rentals of up to 4 months, the landlord pays them, and their cost is included in the rent. For long-term rental agreements, utilities are usually paid by the tenant.

We also recommend that you insure the property to cover unforeseen situations, such as flooding by neighbours or fire.

Tax on rental income: 15% of the rental amount. The rate is the same for both residents and non-residents of Malta, residential and non-residential premises, and individuals and companies. There is no deduction applicable to this tax. If you rent out more than one property, you must pay a tax of 15% of the total rental income from all the properties rented out.

Energy Performance Certificate. All real estate transactions, including renting, require an Energy Performance Certificate (EPC), which has to be obtained by the property owner.

The certificate assesses the energy efficiency of an apartment or building and contains recommendations for improving it. The certificate is renewed every 10 years.

A licensed appraiser and costs issue the certificate €200‑300 for an apartment and €500+ for a house. The penalty for not having a certificate when renting or selling real estate ranges from €500 to 5,000.

Non-residential premises, buildings under construction, dilapidated buildings, detached houses smaller than 50 m², and houses recognised as cultural heritage objects do not need a certificate.

Real estate in Malta is a profitable investment with average price growth and rental income growth of 5‑10% per annum.

Buying property in Malta is a profitable investment, but it also allows the owner to apply for a Malta residence permit, permanent residence or citizenship. A Malta citizen can live and work in any country in the European Union. At the same time, with a Malta residence permit or permanent residence, the holder can travel visa-free throughout the world, including Europe.

Malta citizenship by naturalisation for exceptional services by direct investment can be obtained by investing €800,000, including purchasing residential real estate for €700,000 or renting it for €18,000 per annum for 5 years. Citizenship can be obtained for the whole family and passed on to your children and grandchildren.

It is possible to buy and maintain the property in Malta at a reasonable cost. Utilities cost €100‑150 per month for an apartment and €400‑500 for a house or villa. There are no annual taxes on the property itself, although a land tax ranges from €40 to 250 per annum. Insurance costs €40‑200 per annum. There is also a tax of 15% on rental income.