Why buy your future property in Malta?
The reasons for moving or investing in Malta can be very diverse: the English language, the lifestyle, the climate, the cost of living, the paradisiacal beaches, professional opportunities in sectors less developed elsewhere such as e-gaming… To all these reasons (a non-exhaustive list of course!) we can also add the good economic situation of the country, the absence of ISF, property tax, housing tax, the high return in case of rental investment and also, quite simply, the simplicity of the procedures for acquiring property.
For all these reasons, more and more foreigners decide to invest in real estate in Malta, whether it is a primary or secondary residence, or as a rental investment. To give you some pointers, My Little Malta and Global Cleanliness Guide explain the reasons for this phenomenon and break down the various possible cases.
Investing in Malta as a foreign national
Expatriates like to invest in Malta in cities such as Sliema, St. Louis JuliansGzira and Swieqi. Some have a preference for more quiet and greenery and are looking for a farmhouse in Gozo
The three cities are also sought after by some expatriates. A little further away from the economic heart of Malta, the atmosphere is more authentic and the prices are more affordable.
Given the significant increase in prices in popular areas, the offer in the north and south of the island is increasingly appealing to those looking for a permanent residence or a second home without seeking to realize a high capital gain on resale.
Throughout Malta and Gozo, Europeans can buy a primary residence and several properties for rental investment.
For non-Europeans, there are certain areas in which it is possible to buy and invest. These are the famous “specially designated areas” of which there are about fifteen, including Tigne Point, Portomaso, Cottoenra and Chambray.
What returns can we expect?
The average price of a square meter in tourist or densely populated areas is around 4,000€, and this price continues to rise.
The average rate of return for rental investment is 4.4%, which is a national average. This rate is much higher in the above-mentioned popular areas for expatriates.
Also note: Maltese laws are mostly ” pro-landlord ” which means that in case of litigation, the laws will be in favor of the landlord and not the tenant. Last but not least, rents and rent increases can be freely negotiated by both parties of the contract.
The costs of a purchase in Malta
Malta’s purchasing costs are considered to be in the “ moderate ” category compared to other countries in the world
– The basic taxes for any transaction in Malta are as follows:
– Stamp duties (transfer fees) which vary between 0% and 5% with some possibilities of partial or total exemption depending on the profile of the buyer.
– The real estate agency’s commission is charged to the seller. This varies between 1% and 5%.
Do not forget the notary fees of about 1% to 2% of the purchase amount.
Taxes related to owning property in Malta
The costs of owning a property in Malta are considered to be in the ” moderate to high ” category
– Net rental income is taxed at 15%, except in special cases of exemption.
– No capital gains tax on inheritance
For the seller, there is still a tax at the time of sale that varies between 0% and 5% of the value of the property. For rental property investments, this rate can reach 8%.
