Appealing tax and residency programmes, international business cachet and a balmy year-round climate, Mediterranean bijou Malta has plenty to shout about. Non-EU citizens in search of a second home and/or flexible residency platform in Europe would be foolish not to consider this historical island. We outline your routes to owning property there.
Malta might be the European Union’s smallest Member State by surface area and population, but it’s one of the most attractive to third-country nationals, which includes UK and American citizens, looking for a foothold in Europe.
In recent years, tax perks and accessible residency programmes combined with a quality lifestyle and English as a main language have helped the island evolve into an international finance hub, particularly in fintech, wealth management, investment funds and insurance. The island’s tax refund system can effectively reduce corporation tax to 5% for some companies. And being a territorial based jurisdiction means residents are generally not taxed on foreign-source income not remitted to Malta. Currently, the European Commission predicts that Malta will be one of the EU’s best performing economies in 2025.
Meanwhile, the island continues to attract increasing numbers of foreigners. “Tourism in Malta already exceeded the pre-pandemic levels in 2023 and continues to grow,” reported the Commission this month [November]. “Between January and August 2024, the flow of tourists was 21.1% higher than the corresponding period of 2023, matched by a similar overall tourism expenditures growth.”
The Republic of Malta is an archipelago and includes the smaller inhabited islands of Gozo and Comino. To control its limited space, much of which is protected, Malta’s property market is regulated. So, whether buying as a holiday home, investor or as part of a residency programme, take on board these pointers.
Sunset over Malta’s capital, Valletta
1. Permits and rental
Malta controls foreign home ownership using permits, minimum purchase prices and rental restrictions.
There are exceptions, which we cover below, but by default under Maltese law non-EU citizens are subject to minimum purchase prices when buying in the archipelago. As of 2024, these are €174,274 for a flat or maisonette and €300,619 for any other immovable property. Once a non-EU buyer has found a property and signed a preliminary contract, they must then apply to the Maltese government for an Acquisition of Immovable Property (AIP) permit, which comes with a €233 fee. Not meeting the price thresholds will mean refusal of an AIP and no purchase. Under AIP rules, which apply to primary residences and second homes, non-EU citizens can only own one property in Malta, they may not rent it out and they are not permitted to sub-divide it.
EU citizens must apply for an AIP permit only when purchasing a second home and don’t need to at all if they’ve resided in Malta more than five years. Of course, both your property agent and independent lawyer will assist you AIP process and meeting the required conditions to become a legal property owner in Malta.
2. Special Designated Areas
Thankfully, not the whole of Malta is subject to AIP permits and the rules outlined above. To ensure the island remains attractive to the international market, the Maltese government permits certain developments to be exempt from any restrictions, so foreign nationals have the same ownership rights as a local Maltese person. This means there is no limit on the number of properties a foreign national can own in one or more SDAs and rentals are permitted. Known as Special Designated Areas (SDAs), they tend to be upmarket residential developments in desirable locations, close to commercial and/or entertainment centres, with modern on-site amenities, including pools, gardens, a gym, underground parking and even a marina. Prices tend to be higher than conventional properties outside of SDAs.
It is possible for a foreigner to own one property with an AIP permit but also buy within an SDA development.
Malta’s most developed area, home to most commercial centres and international businesses is around Sliema and St Julian’s, next to the ancient capital Valletta. There is a good choice of SDAs in and around there, including the landmark project Tigne Point Residences, Fort Cambridge, Pender Gardens, Mercury Towers and Portomaso, with others on the other side of Valletta in the Three Cities area. Elsewhere, other options can be found in St Paul’s Bay, Gzira, Marsascala, Mellieha, Naxar, Rabat and the island of Gozo.
Marsaxlokk, Malta
3. Residency by investment
Malta has a choice of residency and visa programmes for non-EU citizens, offering a gateway to the European Union and potentially a passport. Purchasing property within an SDA can be a worthwhile option for applicants of the Malta Permanent Residence Programme (MPRP). It enables overseas applicants to meet the property investment condition by investing in upmarket property, which they can use personally but also have the option to rent out. It could also rise in value, generating capital value. More to come on residency options in Malta!
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