Malta – Property Taxes

What taxes and fees apply when buying a property in Malta?

In contrast to many other jurisdictions, Malta imposes a relatively short list of charges on property purchasers. There is no VAT on the acquisition of immovable property in Malta, and no form of local council or municipal tax to contend with. This gives the buying process a degree of simplicity that stands in marked contrast to countries like France or Italy, where buyers must navigate multiple layers of transfer levies, notarial taxes, and registration costs that can accumulate significantly.

The principal charge for buyers is stamp duty, levied at a flat rate of 5% on the consideration paid for the transfer. This total is split into two stages: 1% falls due at the time the Promise of Sale Agreement is drafted, with the outstanding 4% payable upon execution of the final Deed of Transfer. While the concept is broadly comparable to the UK’s Stamp Duty Land Tax, Malta’s rate structure is considerably more straightforward.

Notary fees generally fall in the range of 1% to 3% of the sale price, varying according to the notary engaged. In Malta, the notary occupies a central and legally mandated role in property transactions — conducting title research, drafting the Promise of Sale Agreement, and formally publishing the final deed. Both parties may share a single notary, or each may choose to instruct their own.

Buyers who have not been continuously resident in Malta for more than five years — whether Maltese nationals, EU citizens, or non-EU nationals — and who are acquiring property outside a Special Designated Area must obtain an AIP (Acquisition of Immovable Property) permit, which carries a fee of €233. Always confirm the current fee with the Malta Tax and Customs Administration (MTCA), as it is subject to periodic revision.

Further costs to budget for include an independent architect’s fee should you wish to commission a structural survey, and any estate agency charges — though in Malta these are typically borne by the seller rather than the buyer (confirm this arrangement at the outset). A modest land registry search fee may also apply.

Worked example: buying a €350,000 property in Malta (standard buyer, no special exemptions)

Expressed as a proportion of the purchase price, a standard buyer should anticipate total transaction costs of approximately 6.5%–7.5% (as of 2025). Always verify current figures with the MTCA and your appointed notary before exchanging contracts.

What taxes and fees apply when selling a property in Malta?

Vendors are required to pay a withholding tax — also referred to as the property transfer tax — which is deducted from the sale proceeds. This charge is ordinarily set at 8% of the value of the property being transferred, net of agency fees. It functions as a final settlement in place of capital gains tax; the following section covers the full range of applicable rates and exemptions in detail.

A fundamental characteristic of this tax is that it falls due regardless of whether the seller has made a profit. This distinguishes Malta’s system sharply from capital gains tax regimes in countries such as Canada or Australia, where only the net gain is brought into charge. In Malta, the calculation is based on the transfer value itself rather than any uplift in value — an arrangement that tends to favour sellers who originally acquired at a low price, but which can feel disproportionate for those selling close to their original cost.

Estate agent commissions in Malta customarily range from 3% to 5% of the sale price, though this varies between agencies and is open to negotiation. These fees are normally the seller’s responsibility. Notarial costs at the completion stage also typically fall to the seller unless the parties agree otherwise. As with all costs, current applicable amounts should be confirmed with your notary and agent before proceeding.

Once the transfer deed is executed, the notary publishing the deed is responsible for submitting the relevant DDT1 form to the Property Tax Directorate, accompanied by site plans, a copy of the Public Registry note, the stamp duty payment due from the buyer, the capital gains tax payment due from the seller, and Schedule 8 (in the case of residential property).

Is capital gains tax payable on property sales in Malta?

The property transfer tax — sometimes referred to as the final withholding tax or capital gains tax on real estate — applies at a rate of 8% for all properties acquired after 1 January 2004, and 10% for those purchased prior to that date. Crucially, unlike a conventional capital gains tax, this charge is computed on the gross transfer value rather than the net profit. It constitutes a final tax, meaning the seller incurs no additional income tax liability on the sale proceeds.

While 8% is the standard property transfer tax rate, a number of specific circumstances attract different rates:

• A reduced final withholding tax of 5% applies where the property is disposed of within 5 years of acquisition and does not form part of a development project.
• A 5% final withholding tax also applies where the property, having been acquired after 1 January 2016, is situated within an Urban Conservation Area or is a scheduled building that has undergone restoration works.

An important exemption exists in relation to a seller’s primary residence. Where the property has served as the seller’s main home for at least 3 consecutive years and the sale takes place within 1 year of the seller vacating it, the disposal may be exempt from the transfer tax altogether. This serves a broadly similar purpose to Principal Private Residence relief in the UK and Ireland, though the qualifying conditions differ — always confirm the current criteria with the MTCA or a locally qualified tax adviser before proceeding.

Non-residents are subject to the same final withholding tax rates as residents when selling Maltese property. Because the tax is collected at the point of transfer by the notary, there is no mechanism by which non-residents can defer or sidestep the liability by remaining outside Malta.

Practical example: selling a property purchased for €250,000, sold for €350,000

Note that the tax is applied to the full €350,000 transfer value, not the €100,000 gain. Verify current rates and qualifying conditions with the MTCA before completing any transaction.

Are there annual property taxes in Malta?

Malta levies no local council or municipal property tax of any kind. This places it in a distinct position relative to the rest of Europe: French property owners, for instance, face an annual taxe foncière; Spanish homeowners are subject to the IBI (Impuesto sobre Bienes Inmuebles); and in the United States, annual property taxes routinely account for 1%–2% of a home’s assessed value every year. Malta simply has no equivalent ongoing charge on residential property ownership.

Property owners do contribute to local council (kunsill) services — such as refuse collection — through a modest annual fee, but this typically amounts to no more than a few dozen euros and bears no resemblance to a conventional property tax. There is no wealth-based levy on property holdings, no surcharge for owning a second home, and no imputed rental income tax on owner-occupied residences.

The absence of any recurring annual property charge makes Malta an especially appealing destination for buy-to-hold investors and retirees who wish to own property over the long term without facing an escalating annual tax burden. As policy can always evolve, confirm the continued absence of such levies with the MTCA before finalising any purchase.

How is rental income from property taxed in Malta?

Rental income derived from property in Malta is chargeable to income tax, and landlords may choose between two main methods of taxation. For long-term residential lettings, a flat-rate final withholding tax option is available, which considerably eases the compliance burden. As of 2025, this rate stands at 15% of gross rental income — no expenses may be deducted, but the tax is treated as a final settlement, relieving the landlord of any obligation to include the income in a general tax return. Confirm this rate with the MTCA, as it is subject to change.

As an alternative, landlords may elect to have their net rental income assessed under the standard progressive income tax rates, allowing deductions for legitimate expenses such as maintenance, repairs, and associated costs. This route can be more beneficial for landlords with substantial deductible outgoings, though it demands more rigorous record-keeping and the submission of an annual tax return.

The letting of immovable property is generally treated as exempt without credit for VAT purposes, meaning that no VAT is charged on the rent but the landlord is equally unable to recover input VAT on related expenditure. This is a material consideration for landlords undertaking significant renovation or furnishing works.

Short-term lettings — such as those arranged through platforms like Airbnb or Booking.com — are treated differently from standard residential tenancies. Accommodation let on a short-term basis through licensed premises falls within Malta’s travel and tourism legislative framework, attracting a distinct VAT and licensing regime. The 15% flat-rate option may not apply in the same manner. Landlords operating short-term tourist lets should register with the Malta Tourism Authority (MTA) and take specific tax advice.

Non-resident landlords earning rental income from Maltese property remain liable to Maltese income tax on those receipts. The same flat-rate or progressive options are broadly available, but non-residents should examine any double taxation agreements between Malta and their country of tax residence to understand how their overall liability may be affected.

All landlords — resident or non-resident — are required to register their rental agreements and meet applicable reporting obligations. Failure to register a tenancy agreement can attract penalties. Verify current registration requirements with the MTCA or the Housing Authority.

Does inheritance tax apply to property in Malta?

Malta does not operate a conventional inheritance tax or estate duty of the kind found in countries such as the UK (Inheritance Tax), France (droits de succession), or the United States (federal estate tax). That said, the transmission of property on death does give rise to stamp duty obligations under the Duty on Documents and Transfers Act, which is administered by the MTCA.

In principle, stamp duty at 5% is chargeable on heirs who inherit immovable property. However, meaningful exemptions exist for close family members. No duty is imposed where immovable property passes on death to a surviving spouse or cohabitant, where property is transferred upon the death of a parent or legal guardian to a disabled individual, or where a dwelling house passes on death from a parent to a direct-line descendant.

With effect from 28 October 2025, the threshold below which a reduced stamp duty rate of 3.5% applies upon the inheritance of a dwelling house that was occupied as the ordinary residence of the transferees was raised to €400,000 (up from €200,000). This enhancement is of considerable benefit to heirs inheriting the family home.

Where a surviving spouse inherits the deceased spouse’s share of their sole residence, that surviving spouse is fully exempt from stamp duty. Likewise, children are exempt when inheriting their parents’ residence, provided the causa mortis declaration is submitted within 1 year of the date of death.

Non-resident and foreign heirs are subject to the same Maltese duty rules as residents in respect of property situated in Malta — there is no additional surcharge based on the heir’s nationality or place of residence. Nevertheless, heirs may also face obligations in their own country of tax residence, for example where that country taxes worldwide inheritances. Malta maintains an extensive network of double taxation agreements — consult the MTCA’s international agreements page to identify whether a treaty exists with your country of residence, and take qualified advice in both jurisdictions.

Does gift tax apply to property transfers in Malta?

Malta does not impose a standalone gift tax. However, when immovable property is transferred by way of donation, it is subject to duty under the provisions governing donations and gratuitous transfers. The applicable rates depend on the relationship between the donor and recipient, with exemptions available for transfers between spouses and direct descendants up to specified values.

No stamp duty is chargeable on the first €250,000 of the value of immovable property donated by parents to their children for residential use by the children. Duty at the reduced rate of 3.5% continues to apply to any value exceeding this threshold. This renders lifetime property transfers from parents to children a comparatively tax-efficient mechanism in Malta.

Where a gift does not attract a specific exemption — for instance, a transfer between more distant relatives or between unrelated parties — standard stamp duty rates apply, calculated by reference to the market value of the property rather than any nominal consideration. Where the transfer is treated as equivalent to a sale, stamp duty is assessed on that market value.

The donor may also carry a final withholding tax obligation where the transfer constitutes a disposal for income tax purposes. The interaction between gift duty and income tax can be intricate, and the precise treatment will depend on the relationship between the parties and the nature of the property involved. Professional advice from a locally qualified Maltese notary or tax adviser should always be obtained before proceeding with any lifetime property transfer.

Are there any tax advantages or incentives for buying property in Malta?

The Maltese government offers a variety of property purchase incentive schemes, a number of which have been extended or enhanced in successive budget rounds. The most significant measures target first-time buyers, second-time buyers, and those acquiring heritage or long-vacant properties.

First-time buyers

Purchasers who have never previously owned property and who intend to occupy the acquisition as their primary and sole residence benefit from a stamp duty exemption on the first €200,000 of the purchase price. The standard 5% rate applies to any amount above this threshold. The first-time buyer exemption covers transfers completed up to 31 December 2025, with supporting documentation required by 28 February 2026. Check with the MTCA regarding any extension of this scheme beyond that date.

Second-time buyers

Where a person sells their existing home and purchases a replacement within 12 months, they may be entitled to a refund of the stamp duty paid on the first €86,000 of the new property’s value. The scheme is designed to encourage property owners to move into new residential properties and stimulate activity in the market.

Vacant and heritage properties

A stamp duty exemption on the first €750,000 of the transfer value is available to buyers acquiring property situated in an Urban Conservation Area, property constructed more than 20 years ago that has stood vacant for over 7 years, or newly developed property built in a traditional Maltese architectural style. This exemption on the first €750,000 of transfer value for qualifying vacant or Urban Conservation Area properties has been extended through to 31 December 2025.

VAT refund on restoration

Owners and prospective purchasers of qualifying properties may be eligible for a VAT refund of up to €54,000 on the first €300,000 of expenditure on refurbishment works. The scheme reimburses eligible costs relating to the restoration and completion of privately owned residential properties within Urban Conservation Areas, properties over 20 years old that have been vacant for more than 7 years, and newly built properties constructed in accordance with approved criteria reflecting traditional Maltese architectural features.

Gozo incentives

Reduced stamp duty rates for property purchases on the island of Gozo have featured in a number of previous budget cycles. Confirm with the MTCA whether any Gozo-specific incentive is in force at the time of your purchase, as these are time-limited measures subject to periodic renewal.

Do different rules apply to foreign buyers or non-residents purchasing property in Malta?

Malta is open to property acquisition by foreign nationals, but certain rules apply that distinguish non-residents from those already established on the island.

The AIP (Acquisition of Immovable Property) permit, which costs €233, is required for any buyer — Maltese, EU, or non-EU — who has not been continuously resident in Malta for more than five years and who wishes to purchase property outside a Special Designated Area (SDA). SDAs are specific premium developments where foreign buyers may purchase freely, without the need for an AIP permit, and are additionally permitted to own more than one property. Outside SDAs, non-resident buyers are generally limited to acquiring a single property for their personal use.

EU citizens who can demonstrate more than five years of continuous residence in Malta enjoy broadly the same property rights as Maltese nationals and are not required to obtain an AIP permit. Non-EU nationals face somewhat greater restrictions on the type and location of property they may acquire outside SDAs, irrespective of the length of their Maltese residency.

A meaningful stamp duty concession is available to Maltese nationals and EU citizens who have maintained continuous residence in Malta for more than five years: the duty rate reduces to 3.5% on the first €150,000 of the purchase price. Non-EU buyers, and those who have not yet accumulated five years of continuous residence, do not qualify for this reduced rate.

In respect of the seller’s final withholding tax, non-residents are charged at the same rates as residents on the transfer of Maltese property. There is no additional levy on non-residents at the point of sale. Non-residents should nonetheless consider their overall tax position in their home jurisdiction — particularly where they are treated as tax-resident elsewhere — and should seek advice from both a Maltese tax adviser and a qualified adviser in their country of residence before selling.

Those seeking to acquire Maltese residency through property investment may wish to explore the Malta Permanent Residence Programme (MPRP), which sets out specific property ownership or rental requirements alongside associated fees. This programme operates independently of the general property purchase process, and prospective applicants are advised to obtain specialist immigration advice.

Step-by-step: how to complete a property purchase in Malta

1. Appoint a notary — Engage a Maltese notary (and optionally an independent lawyer) to carry out title searches and advise on the transaction. Your agent can recommend qualified notaries.
2. Check AIP requirements — If you have not been resident in Malta for more than 5 continuous years and are buying outside a Special Designated Area, apply for an AIP permit (€233 as of 2025) from the MTCA before proceeding.
3. Sign the Promise of Sale (Konvenju) — This preliminary agreement commits both buyer and seller. Once signed, the Promise of Sale must be presented at the Property Tax Directorate within 21 days, at which point a provisional stamp duty of 1% is paid by the purchaser.
4. Carry out due diligence — Your notary researches the title, checks for encumbrances, and confirms the property is free of outstanding charges. Commission an independent architect’s report if required.
5. Arrange finance — If purchasing with a mortgage, ensure your mortgage offer is confirmed. Maltese banks and international lenders both operate in the market.
6. Sign the final deed of transfer — Both parties sign before the notary. The buyer pays the remaining 4% stamp duty, and the seller pays the applicable final withholding tax. The notary submits the DDT1 form at the Property Tax Directorate together with site plans, stamp duty payment (buyer) and capital gains tax payment (seller).
7. Register the transfer — The notary registers the deed with the Public Registry. Receipts are normally issued no later than 3 weeks from the date of submission of the notice of transfer.

Frequently asked questions: property taxes in Malta

Is there any VAT payable when buying a property in Malta?

The purchase and sale of immovable property in Malta carries no VAT implications whatsoever. Such transactions are treated as an exempt without credit supply, meaning no VAT is chargeable on the transfer. This contrasts with the position in several other EU member states — Spain and France among them — where the purchase of a newly constructed property attracts VAT.

Do I need a lawyer as well as a notary when buying property in Malta?

The notary undertakes the legal due diligence and formally completes the transfer, so appointing a separate lawyer is not a legal requirement. That said, particularly for buyers from outside Malta who may be unfamiliar with local practice, retaining an independent legal adviser alongside the notary is widely regarded as prudent and is strongly recommended. Both parties to a transaction may instruct the same notary, or each may choose to appoint their own.

What happens if the MTCA disputes the declared value of the property?

An internal departmental board has the authority to determine whether an architect should be appointed to inspect the property and establish its market value. Although professional valuations are conducted with care, they are inherently subjective. Maltese law permits a 15% margin between the declared transfer value and the figure determined by the department’s architect. Should the MTCA’s valuation exceed this tolerance, additional duty may be levied. It is therefore important to ensure that the price declared in the deed accurately reflects the genuine market value of the property.

Can I claim any relief if I sell my main home in Malta to buy another one?

Subject to the satisfaction of specified conditions — including that the seller does not hold any other property — where a person disposes of their residential property and acquires a replacement home, the duty paid on the first €86,000 of the value of the new property will be refunded. This measure has been extended to acquisitions made up to 31 December 2026. Confirm eligibility criteria and documentation requirements with the MTCA.

Are there any taxes I need to pay if I inherit property in Malta as a non-resident?

Non-resident heirs inherit Maltese property subject to the same stamp duty framework as resident heirs. The principal exemptions — including those for surviving spouses, children inheriting a parent’s residence, and certain disabled individuals — are available regardless of where the heir is domiciled or resident. Heirs should additionally review their obligations in their own country of tax residence, as some jurisdictions tax worldwide inheritances. Malta has concluded a network of double taxation treaties — the MTCA website provides details of the countries with which such agreements are in place.

Is rental income taxed at the same rate for residents and non-residents?

Maltese income tax applies to rental income derived from Maltese property whether the landlord is resident or non-resident. The flat-rate 15% final withholding tax option (as of 2025) is accessible to both groups in respect of long-term residential lettings, simplifying reporting obligations considerably. Non-residents must also consider their disclosure requirements in their country of tax residence and examine whether any applicable double taxation treaty affects the overall position. The MTCA or a locally qualified tax adviser can assist with specific situations.

Are first-time buyer exemptions available to foreign nationals?

The first-time buyer stamp duty exemption — which eliminates duty on the first €200,000 of the purchase price as of 2025 — is not restricted by nationality. It is available to any qualifying purchaser, provided the property will serve as the buyer’s primary and sole residence in Malta and the buyer has not previously owned property. The scheme is also subject to a validity deadline and specific conditions. Always verify current eligibility requirements and scheme status with the MTCA before placing reliance on this exemption.

Where do I go to pay stamp duty and register a property transfer in Malta?

Stamp duty and related charges are administered by the Property Tax Directorate, which forms part of the Malta Tax and Customs Administration (MTCA) and is located at 63, Old Mint Street, Valletta. In practice, your notary manages all submissions and payments on your behalf, so there is no requirement for the buyer or seller to attend in person. The official MTCA website is mtca.gov.mt.