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Malta’s real estate market is vast and varied, with properties available to suit all requirements. Yet making a large purchase or investment in order to obtain a dream home may require financial assistance. Various types of home loans are available in Malta, with banks such as HSBC, Banif, BOV and APS offering specialist service at competitive prices.

Property Bank Loans in Malta

Loans are developed according to the needs of the individual, so whether one aims to purchase a shell property or plot of land that is to be developed, or even a property that will serve as a second home or rental, it is possible to obtain a loan relatively conveniently.

For Maltese citizens, a home loan may offer up to 90% of the property’s total value, with the other 10% normally paid out of the buyer’s pocket as a deposit on the property. Loan repayment conditions may be spread over the course of many decades. Typically it is up to 40 years depending on the individual’s age, or up to the age of 65, and normally do not exceed 25% of the individual’s gross income.

The amount that can be loaned by the bank is calculated depending on gross annual income or joint annual income if a couple is applying, pre-existing loans and debt, affordability and expenditure. In addition to these factors, a life insurance policy and building insurance policy are compulsory in order to cover the replacement cost of the property.

First time buyers

First time buyers typically receive the most profitable home loan rates. There are specific loans that provide many benefits, including advantageous interest rates, deductions for multiple legal fees and a loan amounting to up to €150,000 which is repayable over 40 years. In addition to the home loan, but depending on the specifications of that particular loan, first time buyers are eligible to supplementary loan packages, which include the purchasing of furniture and appliances.

What is required to apply for a property loan in Malta?

The requires are different for Maltese citizens and non-Maltese residents.

Property loan for Maltese Citizens

For Maltese citizens, the following items are required:

• ID card or passport.
• Proof of income, such as tax returns or FS3 forms.
• Documentation of existing financial obligations, such as unrelated loans or credit cards.
• Documentation pertaining to life insurance policies, investments, assets and bank account statements dating back three years.
• An architect’s evaluation report of the property, including plans, permits and evaluation of costs.
• The deed of acquisition or preliminary agreement.

Property loan for non-Maltese residents

Non-Maltese residents are welcome to apply for local loans, and up to 80% of the property’s value can be covered. Typically, loan repayments do not exceed 30% of an individual’s gross income and may also be repaid over a period of 40 years (depending on one’s age) or up until the age of 65. Life insurance and building insurance policies are also required when applying for a loan.

The following must be provided when applying for a loan:

• Passport.
• Proof of income, including three income tax returns or three months’ pay slips.
• The deed of acquisition or preliminary agreement.
• An architect’s evaluation report of the property, including plans, permits and evaluation of costs.
• A banker’s reference.
• Any pre-existing mortgage, loan or current account statements.

Every individual has different circumstances concerning their case, so additional documentation might be necessary. Read more about the Legal Process for buying a property in Malta

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Malta is one of the few countries where the state funds public healthcare for all citizens through taxation and weekly national insurance contributions paid for by employers and employees. One may find both private and public healthcare sectors and presently, free healthcare is offered in 42 clinics, which are housed in 8 health centres.

Malta’s healthcare services

Malta’s main public hospital, Mater Dei, is the largest and most technologically advanced hospital in the country. It boasts over 800 beds, 25 operating theatres and a new oncology centre which is set to open in 2014.

The most recognized private clinic is St. James Hospital, which has numerous clinics offering a variety of services. These include cosmetic surgery, dentistry, eye surgery, obesity treatment and access to both general and specialized medical practitioners. All patients seeking private healthcare are required to cover the necessary payments, this can be done either through direct payment or private local health insurance policies.

Medical tourism has been growing steadily and is closely linked to private healthcare, offering both simple and complex treatment. Medical tourists normally enlist private services in order to avoid waiting lists. Given the high level of expertise offered by Malta’s most qualified specialists, together with its competitive prices and favourable climate, Malta is an idyllic place for treatment and recuperation. Choosing what type of care is needed depends on the individual’s desires, costs and waiting times.

How non-Maltese nationals can use Maltese health services

Most visitors to Malta buy private health insurance, but European Union nationals visiting Malta who are in possession of a European Health Insurance card (EHIC) may make use of public health services at no cost if they are injured or become ill. The EHIC does not cover persons travelling to Malta purely to seek medical treatment. Neither does it cover the medical transportation fees.

UK and Australian nationals who are in Malta for less than 30 days are also entitled to receive free healthcare. This is possible via a reciprocal health care arrangement between the countries.

Non-European Union residents or visitors to Malta who do not possess residency or do not pay national insurance will be responsible for covering all the costs of their treatment. It is advised that both EHIC and non-EHIC holders apply for Maltese health insurance. This is to guarantee full medical insurance coverage, especially in connection with medical expatriation, which can be very costly.

Health Insurance in Malta

Health insurance may be purchased from multiple local insurance companies. Prices are competitive, so researching and comparing costs are vital in securing the best policy per individual. It should be noted that this insurance does not cover pre-existing conditions.

In the case of a medical emergency, all patients are admitted and treated. Once the patient is stabilized, then measures will be taken to either prove their right to no cost care or to provide private insurance details or coverage.

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Modelled on the British system, the education system adopted by the Maltese island comprises two compulsory stages: primary education (from age five until age eleven) and secondary education (from age twelve until age sixteen). Following completion of secondary education, youths are free to choose whether to complete their education at a post-secondary, and eventually tertiary level; or they may opt to join Malta’s workforce. Almost every locality in Malta features at least one primary school, and most localities also feature secondary schools.

Types of Educational Institutions in Malta

There are three kinds of educational institutions in Malta and Gozo  which cater for compulsory education – private schools, government owned schools and church run schools. The benefits of private schooling in Malta is that your child will receive more individual attention to cater for his or her specific needs, as these schools tend to have more resources available than either state owned schools or church schools.

Secondary education includes a number of compulsory subjects, including mathematics, English, Maltese (for Maltese nationals), at least one science subject and one foreign language, and environmental studies. A number of elective subjects are also available, including various foreign languages and subjects across both the humanities and sciences.

MATSEC examinations

At the end of their compulsory education, before deciding whether to continue studying, students  sit for the matriculation certificate – known as the MATSEC examinations (a system based on the British O’level system). Similar exams at an advanced level are held should students choose to further their education at a sixth form, and are a pre-requisite for entrance to many courses at the University of Malta. You can find more information about MATSEC and A’level examinations here.

Post-secondary Education

Malta boasts one of the highest levels of post-secondary education in Europe, with over 11,000 registered students at the University of Malta alone. There are six sixth form colleges in Malta – St. Martin’s College; St. Edward’s College; St. Aloysius College; De La Salle College; G.F. Abela Junior College and Giovanni Curmi Higher Secondary School. There is also a state run sixth form in Gozo – Sir M.A. Refalo Post Secondary School.

Alternatives to sixth form is the Malta College of Arts, Science and Technology (MCAST), which offers higher education at various levels ranging from part-time evening courses, to university level degree course; or the Institute of Tourism Studies.

The University of Malta

Following completion of post-secondary education, many students opt to continue their studies at a tertiary level, where a number of options are available. The largest tertiary education institution is the University of Malta, boasting over 11,000 students at undergraduate, postgraduate and doctoral levels. Education at an undergraduate level is free of charge for all Maltese and EU nationals. Other tertiary level institutions include St. Martin’s institute for higher education and the European Institute for Education, as well as a number of smaller, privately run degree courses.

More and more students in Malta choose to complete their education at a Master’s level. Although many courses of which are available at the University of Malta, it is becoming common practice for students to seek higher education abroad – as the reputation of the University of Malta paves the way for admittance into an almost limitless number of postgraduate programmes.

Malta’s Government Education Incentives

Malta’s Government has always remained committed to furthering education levels, offering a large number of incentives to subsidise the cost of continuing education at a level required to maintain the country’s socioeconomic development across a huge range of sectors. This is evident in the consistently growth in the  number of annual graduates across all levels of education.

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Their ideal location in the centre of the Mediterranean Sea has given the Maltese islands an extremely diverse collection of cultures and traditions, stemming from the influences of the various groups who have occupied the archipelago. In today’s day and age, Malta remains a culturally diverse nation, due to the high levels of emigration (especially from continental European expatriates).  In order to accommodate for all the varying cultures that call this melting pot of nations home, there are many ways to satisfy all sorts of lifestyles.

Maltese Art and Architecture

For the artistically inclined, there is an abundance of art and architecture that the island has to offer – ranging from the ancient city of Mdina with its largely baroque style of architecture, to the parallel streets of the Capital, Valletta; for such a physically small nation there are many museums housing beautiful works of art to suit anyone’s taste, regardless of artistic inclination.

The majority of artworks and traditions in Malta draw their influence from Malta’s strong religious roots. The superb architecture of the churches of Malta are a must see – each of Malta’s 365+ churches is unique in its own way and has something different to offer its visitors.

Maltese Summer Feasts

The strong religious ties are especially seen in summer, where each week a different parish hosts a feast, paying tribute to their own respective saint. These feasts feature traditional music and games, dating back hundreds of years, typical Maltese cuisine and an astounding fireworks display – with each parish competing to outdo the others.

Maltese traditions and lifestyle

Despite its geographic limitations, Malta plays host to various different cities and towns – ranging from the metropolitan town of Sliema, to the more traditional fishing villages such as Marsaxlokk. In an area smaller than most major cities in Europe, Malta plays host to many different traditions and lifestyles depending on which part of the island you’re in.

Traditionally, towards the north and south of the island you’re more likely to find people interested in relaxing and enjoying the culture that this sun-kissed island has to offer. In the centre live the more urban people, preferring to adopt a metropolitan lifestyle, engaging in work in the tertiary sectors and living more fast-paced lives than the relaxed lifestyles of the north.

Malta, the Pearl of the Mediterranean

Life in Malta can be very laid back – with its warm summers, the constant concerts by local talent such as world renowned tenor Joseph Calleja, the annual Isle of MTV music festival, the different traditions, easy access to the beach, the more exclusive areas such as Portomaso or Tigne Point – it can be seen as the ideal place to retire.

There is someone for everyone, regardless of age, nationality or lifestyle choice – everyone feels at home in the small, warm and inviting island. Language is not an issue – since Malta is a bilingual country almost 90% of the population speaks English, and other spoken languages include Italian, French and German.

No matter where you’re from, you’re almost certain to meet someone from your home country. The almost perennial sunshine, the friendliness of the Maltese people and the abundance of things to do attract thousands of visitors each year, with many choosing not to return home once they’ve had a taste of what is often called the pearl of the Mediterranean.

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Its ideal strategic location in the middle of the Mediterranean sea has ensured that Malta has always been a hub for transport and transit stops. This hasn’t changed in modern times – whether it is a stop on a cruise, or a transfer stop for long international journeys, Malta plays host to hundreds of ships and planes on a monthly basis.

Travelling to and from Malta

Serviced by most major European airlines, Malta International Airport has won several international awards for its service and business management. There are direct flights from most major European cities – flights which become extremely frequent in the peak summer months. Servicing flights from major airports such as Frankfurt, Dusseldorf, Munich, Zurich and many others, it is also very easy to catch a connecting flight to Malta. Malta International Airport also hosts several low cost airlines, such as Ryanair and Easyjet – so travelling to and from Malta is now easier than ever, and there is now the option to get a low cost flight back home for the weekend.

With its many ports and harbours, air is not the only way to travel to and from Malta – the beautiful island welcomes many cruiseliners throughout the year. Several daily ferry services run between Malta and Sicily via catamaran. There is also the option to sail in on your own private yacht and berth in one of the many marinas around the island.

Do you need a Visa to travel?

Travelling to Malta is very simple. As it forms part of the European Union, people travelling from an EU member state do not require a visa. Malta also forms part of the Schengen area and as such even passports are not required for those travelling from countries forming part of the agreement– a regular form of identification such as an ID card or a driver’s licence will suffice for entry into the country. Traveller’s visas from the United States or Canada can last up to 90 days before renewal is needed.

Quality of life in Malta

Malta does not have any local diseases, and as such immunisation is not required for entry. However, it is always advisable to consult the World Health Organisation’s International Travel and Health document, which can be downloaded from here. Malta remains a relatively safe country in terms of crime rates, however it is advisable to always book travel insurance as a precautionary measure. Travellers from the European Union are also advised to have with them an European Health Insurance Card: as emergency health care is only free to residents of the Maltese islands (both Maltese, as well as permanently placed foreign nationals holding a Maltese identity card).

Read more on moving to Malta and enjoy its Mediterranean lifestyle through the Malta Key Employee Initiative (KEI) and the Malta Nomad Permanent Residence

Why Malta?

Malta is one of the few civil law jurisdictions that not only has developed its own domestic law but also recognizes the judiciary of foreign law.  The act of the setting up is regulated by the Maltese Trust and Trustees Act of 2005 and which incorporates within its provisions the Hague Convention on the Law Applicable to Trusts and on their recognition, which Malta has ratified.

A trust can be created in various ways: via a unilateral decision, an oral agreement, by a judicial decision, an instrument in writing and even by operation of the law.

Setting up a Maltese Trust

A trust under Maltese law is described as a legal agreement between two parties: the settlor and the trustees. The settlor places assets (bank accounts, real estate, stocks and bounds, furniture or art) under the power of the trustee for the welfare of a beneficiary or for charitable purposes.

The main advantages of Maltese trusts are the country’s reasonable set-up and maintenance costs (50% cheaper than competing EU domiciles), the support offered by the MFSA (Malta Financial Services Authority), the flexible regulatory and legal structure, and the fiscal benefits for the fund and fund manager, the investors and the administrator to business organisations and high net worth individuals.

This distinctive structure is additionally strengthened by the widespread use of the English language in the legislation, education and business enterprises. There are currently 130 licensed trust management companies (both local and foreign) offering global trust and trustees services.  Our Managing Director is a director of a leading trust company Claris Capital.

The Benefits of Malta-registered Trusts

Domestic Issues:

• Avoiding expenses and delays relating to Malta or overseas probate processes
• Conserving assets until minors reach the age of maturity
• Protection in the event of the settlor or the beneficiary’s incapability
• Allocation of assets to the settlor’s heirs without the assets being transferred immediately upon the settlor’s death

Tax Issues:

• Minimizing estate taxes
• Assets can be hidden from third parties
• Moving considerable tax burdens onto beneficiaries with more advantageous tax impositions

Practical Issues:

• To have investments under one roof and overseen by specialists
• Aiding charities

Tax Implications of a Trust

Under Maltese law the stipulated rule is that tax liability emerges when at least one of the trustees of the trust resides in Malta. The tax is determined in relation to the income attributable to the trust. This would compromise the total income tax under Maltese law, which would result from or are derived by the trustee at any stage in the life of the trust.

However, the inclusion of a transparent model in Malta’s tax laws allow in certain circumstances, for the tax authorities to inspect the trust and to either tax the transaction or absolve it, depending on the different factors that would attribute jurisdiction to tax in Malta or otherwise.

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Buying Property in Malta

Property in Malta has always been a sound investment securing moderate capital growth even in the worst of times.  Over the years numerous government initiatives have contributed towards various tax advantages directed at foreign businesses, professionals and retirees, making Malta a tempting destination and in turn this has had a positive effect on the demand for property be it for rental, residence or even investment. Here is an introduction to the legal process for buying property in Malta.

Procedures For Buying Property in Malta

1. Together with a professional and reliable real estate agent the client’s requirements are established.
2. A property is selected that reflects the client’s needs and a price is agreed with the seller.
3. A legal aid is sought for the inspection of the property and contractual portion of the purchase.
4. A Preliminary Agreement (locally known as a konvenju) is drawn up and signed. This agreement is typically valid for three months.
5. A deposit of 10% of the value of the property is normally paid when signing the above agreement on account of the purchase price.  In most cases this deposit is held by the Notary public on behalf of the buyer and transferred to the seller once the root of title of the property has been satisfactorily established.
6. Both parties i.e. the vendor and the purchaser are legally bound by the agreement.
7. Once the root of title has been established a final deed is signed and the new owners of the property receive the keys.

Expenses To Expect when Buying Property in Malta

Stamp duty fees in Malta, reductions and when it is not applicable:

Stamp Duty fee in Malta

Stamp duty fees amounting to a maximum of 5% of the purchase price are applicable when purchasing a property in Malta and payable by the purchaser  as follows:

• An initial stamp duty equivalent to 1% of the value of the property is paid to a Notary on signing of the  Preliminary agreement (konvenju).  This fee  is then submitted to the Inland Revenue Department and a receipt verifying payment is given.
• The final 4% of the value of the property is paid on the day of the final deed. The Notary then submits the deed to the Inland Revenue Department and a receipt from the IR Commissioner is given.

Stamp Duty on Immovable Property in Malta

Stamp duty is only chargeable on Immovable Property and is not paid on any movable items (furniture and fittings) being transferred together with the immovable property.

When the property being purchased is to be used as the purchaser’s ordinary place of residence a reduction in Stamp duty fees applies.  In this case Stamp duty is charged as follows:

• 3.5% on the first €150,000 of the value of the property; followed by
• 5% on the value of the property exceeding €150,00

AIP Permit for Non-Maltese Nationals

When acquiring property in Malta, Non-Maltese nationals require an AIP (Acquisition of immovable property by a non-resident) permit. The purpose of this permit is to ensure that the applicant/purchaser is a person of good standing. This restriction does not apply to properties located in areas termed Special Designated Areas or to EU citizens when purchasing property which is to serve as their primary residence. Special Designated Areas (SDAs) are established top-end residential areas that possess no acquisition restrictions. Therefore when a property is located in a Special Designated Area both EU and non-EU permanent residents may buy property with the same rights as Maltese citizens.

Taxes when Selling Property in Malta

When selling a property in Malta the tax to be paid (if any) depends on two factors:

Main Residence factor

Capital gains taxes are not applicable if a property that is used as a primary residence is owned for at least three years, on the condition that is it sold within one year of the owner leaving the property. Or:

Investment Property

• 12% final tax of the property’s value; Or
• Where the property has been owned by the same person for less than 12 years, one may opt out of the above rule and apply tax equivalent to 35% on the profit.

Buying Property Through a Company

Buying a property through a company is done typically to use retained earnings within the company directly. Distribution from the company to the shareholder is non-existent and consequently there is no dividend tax. This may be utilized for the purpose of protecting assets. Get in touch with us to learn more about the legal process for buying property in Malta

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This overview of Malta’s personal taxation of Maltese residents applies to persons taking up residence under European freedom of movement rules, under any immigration rights or residence programme as well as under the Maltese Citizenship by Exceptional Services rules.

Personal Tax Connecting Factors

Under Maltese law, the connecting factors determining the taxability of individuals are domicile and residence, remnants of Malta’s British colonial history dating back to the 1940s.

Citizenship is not a factor that effects the taxation of individuals and therefore acquiring Maltese citizenship by exceptional services does not, alone and in itself, give rise to any tax consequences.  Contact us for Maltese tax advice on the tax implications of the residence required by the Maltese citizenship rules, to assess the extent to which it may result in tax residence and to plan all remittances required under the investor citizenship route.

Permanent resident status under immigration law, particularly the Permanent Residence Programme Regulations of 2021, is not equivalent to Maltese tax residence.  Accordingly, Maltese permanent residence permits issued under these Regulations do not automatically result in residents being considered tax resident in Malta given that this immigration programme does not require any minimum physical presence in Malta in any given year.  Contact us for a consultation on the requirements, implications and planning of tax residence in Malta.

Tax Resident Status

Tax resident status is not an automatic consequence of acquiring permanent residence in Malta. Tax resident status results from a residence in Malta of over 183 days, or where residents have spent less than the 183 days in Malta, they may demonstrate various connecting factors evidencing their intention to reside in Malta ordinarily.  Permanent residents of Malta requiring formal confirmation of their tax residence status in Malta are able to obtain this through a separate procedure – prior legal advice is recommended.  Contact us for a tax consultation.

Taxation of Non-Malta residents

Non-tax residents are only subject to tax on local source income, that is income arising in Malta including salaries, local business profits, rental income and pension income.

Malta Tax of Foreign Domiciled Residents of Malta

Tax residents of Malta enjoy a remittance basis of taxation, often referred to as res non-dom taxation, whereby they are only subject to Maltese tax on their foreign income only to the extent remitted to Malta.  Res non-doms are not subject to Maltese taxation on their foreign source capital gains, whether remitted to Malta or not.   The enjoyment of the res non-dom tax regime by persons having incomes sources abroad exceeding €35,000 are subject to a minimum annual tax of €5,000.

Taxation of Income in Malta

Income is taxable in Malta only if it arises in Malta.  Income arising abroad, is only taxable in Malta if a person is tax resident in Malta and only on that portion that is remitted to Malta.  Capital gains are taxable in Malta only if arising in Malta but are subject to various exemptions.  Capital gains arising out of Malta are not subject to tax, nor are they reportable, whether remitted to Malta or not.

Other Maltese taxes

Malta has no wealth or capital taxes, no wealth reporting obligations, no inheritance taxation, no property taxes, no dividend taxes, and no system of rates.

Learn more on Malta Tax Domicile.

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Comparing Malta to London, Berlin, Copenhagen or the sort, especially with regards to geographic size and commerce won’t get you anywhere close to measuring Malta’s worth. Malta is an island in the middle of the Mediterranean Sea, The term ‘location is everything’ was coined with Malta in mind.

Why buy property in Malta

Property in Malta has always been a good investment and a great idea for a place to live. Malta offers a vibrant lifestyle, rich in culture, great weather and a good reputation for hospitality. Malta’s relatively small size means it is accessible by all and consequently makes each part of the island a ‘good’ place to invest.

Over the years Malta has earned the reputation of being an attractive tax and cost-efficient Eurozone location attracting many individuals to take up residence and corporate entities to set up operations.  In addition, a stable political situation and economy, a highly skilled multi lingual work force with English being an official language, low crime rates, high education, an established health care system and much more makes Malta an attractive place to live fueling the demand for more property. Last but not least, Malta’s cosmopolitan lifestyle, coupled with its Mediterranean climate, led to it being voted best in the world in International Living Magazine’s quality of life index for 2011.

To fully understand why Malta is an option in terms of relocation you must be aware of the benefits a business or an individual may gain by choosing Malta.  If you decide to buy property in Malta we can assist with your requirements putting you in touch with the right people able to provide a valued and professional service.

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