Authored by the expert who managed and guided the team behind the Malta Property Pack
Everything you need to know before buying real estate is included in our Malta Property Pack
Are you considering investing in Malta’s real estate market? What are the legal steps, tax implications, and cultural differences you need to understand before making a purchase? What challenges do foreign investors typically face, and how can you overcome them?
These are the questions we hear most often from foreign investors because we’re actively connected to this market. We’ve spent time working with local agents, developers, and investors, so we know what works—and what doesn’t. That’s why we’ve written this article: to provide a clear guide that answers the questions we get asked daily.
Our goal is to help you, as a foreigner, to navigate the property buying process with confidence. If you think there’s something we missed or want more details, let us know (please do!). Your input helps us refine and improve our advice for everyone.
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1) Consider buying in Malta's Special Designated Areas (SDAs) for unrestricted foreign investment and a strategic advantage
Malta's property market offers a unique opportunity for foreign investors through its Special Designated Areas (SDAs).
These SDAs are special zones where international buyers can purchase property without the usual restrictions, making the process as straightforward as it is for locals. This setup provides a strategic advantage for investment, as it bypasses the need for special permits, which can be a hassle elsewhere in Malta.
In 2023, the Property Price Index revealed a 7.1% increase in property prices, largely due to high demand in popular areas like Sliema, St Julian’s, and Valletta. However, properties in SDAs have been appreciating even faster, with an average annual growth of 10%, compared to the overall market's 3-6% growth. This rapid appreciation highlights why investing in SDAs is a smart move.
The simplified transaction process in SDAs is another major attraction for foreign buyers. In 2023, foreign buyers accounted for about 20% of all property transactions, with most of these occurring in SDAs. The ease of buying in these areas, without needing an Acquisition of Immovable Property permit, makes the process quicker and more efficient, typically taking just 2-3 months.
For those considering a property purchase in Malta, understanding the benefits of SDAs is crucial. These areas not only offer a hassle-free buying experience but also promise a potentially higher return on investment due to their rapid appreciation rates.
Sources: Frank Salt Real Estate, Dhalia Real Estate, Immigrant Invest, Global Property Guide
2) Focus on short-term rentals in tourist areas, but ensure compliance with local regulations and licensing requirements
Malta is seeing a surge in tourist numbers, especially in 2023 and 2024.
In the first half of 2024, there was a 23.4% increase in tourists compared to the same time in 2023. This boom is a golden opportunity for short-term rentals, particularly in hotspots like Sliema, St Julian’s, and St Paul’s Bay. These areas are buzzing with visitors, making them prime locations for property investment.
Tourists are increasingly choosing short-term rentals over hotels. In Valletta, these properties are in high demand, with a median occupancy rate of 84%. This means hosts are seeing substantial income, especially since many tourists aged 25 to 44 prefer this type of accommodation. It's a trend that's reshaping the hospitality landscape in Malta.
To make the most of this opportunity, you need to understand and follow local rules. Malta has a regulatory framework for short-term rentals, with around 6,000 licensed properties as of summer 2024. Staying compliant is crucial, as ignoring these rules can lead to fines. The government is actively helping property owners through workshops and educational programs, ensuring everyone knows what's required.
Sources: Hubpy Malta, Business Now, Airbtics
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Malta versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you’re planning to invest there.
3) Be aware that Malta’s citizenship-by-investment program can drive property demand and prices in specific areas
You might find it surprising that Malta's property market is influenced by its citizenship-by-investment program, which can drive demand and prices in certain areas.
In 2023, the Maltese Exceptional Investor Naturalization (MEIN) program brought in €1,500 million, with 2,511 new citizens joining the island. This influx has led to a noticeable uptick in property purchases, especially in spots favored by foreign investors. Areas like Urban Conservation Areas (UCA) and Gozo are particularly popular, seeing significant growth thanks to this foreign interest.
The Central Bank of Malta noted an 8.3% rise in the property price index nationwide in 2023, outpacing the euro area's house price inflation. This trend highlights how international buyers, many drawn by the citizenship program, are pushing property prices higher. It's not just about numbers; it's about the changing landscape of Malta's real estate.
Real estate agents are buzzing about the increased interest from those involved in the citizenship program. This surge in demand is not just a statistic; it's a real shift in the market dynamics. The MEIN program's revenue isn't just sitting in a vault; it's funding projects that benefit the Maltese people, showing its broader impact on the local economy.
Looking back at 2023 and 2024, it's evident that the citizenship-by-investment program has been a game-changer for Malta's real estate scene. The program has not only attracted new residents but also reshaped the property market, making it a hot topic among potential buyers and investors.
For those considering buying property in Malta, understanding these dynamics is crucial. The citizenship program is more than just a gateway for new citizens; it's a catalyst for change in the property market, influencing where and how investments are made.
Sources: RIF Trust, Latitude World, Global Property Guide
From this video, we realize that Malta's citizenship-by-investment program impacts the property market and influences property demand and prices.
4) Consider buy-to-let properties in Malta, as the rental market is booming with demand from expatriates and digital nomads
You might be surprised to learn that Malta's rental market is booming due to a high demand from expatriates and digital nomads, making buy-to-let properties a lucrative option.
Over the past decade, Malta has seen a 546% increase in non-EU citizens, with numbers jumping from 15,000 in 2012 to 97,000 in 2022. This influx has created a high demand for rental properties, making buy-to-let investments particularly attractive. The island's charm and strategic location in the Mediterranean are big draws for those looking to relocate.
Malta is a hotspot for digital nomads, ranked as the 3rd best destination for digital professionals by Forbes. The island boasts a strong telecommunications infrastructure and modern coworking spaces, essential for remote work. This has drawn many digital nomads to the island, further boosting the demand for rental properties.
High occupancy rates are a norm in Malta, especially in popular areas like Sliema and St. Julian’s. These areas not only offer attractive rental yields but also maintain steady long-term value. The thriving tourism industry and growing expat community contribute to this stability, making these locations prime spots for property investment.
Investors are particularly interested in Malta's rental market because of its year-round appeal. The island's mild climate and vibrant culture attract tourists and long-term residents alike, ensuring a consistent demand for rentals. This makes it a reliable choice for those looking to invest in property.
Malta's government has also been proactive in supporting the property market, offering incentives for foreign investors. This has further fueled interest in the island's real estate, making it a favorable environment for property investment. The combination of government support and high demand makes Malta an attractive option for potential buyers.
Sources: ETIAS, Portico and Bridge, Property Market MT USA
Our team found this video where the rental market dynamics in Malta are explored, specifically addressing the growing demand from expatriates and discussing the benefits of buy-to-let investments.
5) Consider buying in Gozo for lower prices and a relaxed lifestyle, attracting a different buyer segment
In 2023 and 2024, Gozo emerged as a more affordable option for property buyers compared to Malta.
While the average price per square meter in Malta hovered around €4,000, Gozo offered a more budget-friendly rate of about €2,500. This price gap made Gozo an attractive choice for those seeking affordable real estate. The island's charm lies not just in its prices but also in its unique lifestyle.
Living in Gozo is about 15% cheaper than in Malta, according to the Cost of Living Index 2023. This includes savings on housing, food, and transportation, making it a haven for those looking to stretch their euros further. Many who moved to Gozo shared stories of enjoying a more affordable lifestyle, which is a big draw for potential buyers.
Beyond the financial benefits, Gozo offers a slower pace of life. A survey by the Gozo Tourism Authority revealed that 70% of respondents favored Gozo's tranquility over the hustle and bustle of Malta. This preference for a peaceful environment is a major selling point for the island.
Gozo's appeal isn't just about cost; it's about a lifestyle change. The island's relaxed atmosphere attracts a different kind of buyer, one who values peace and quiet. This shift in buyer preference is evident in the growing interest in Gozo's real estate market.
For those considering a move, Gozo presents a unique opportunity to enjoy a more relaxed lifestyle without breaking the bank. The island's combination of affordability and tranquility is hard to resist for many potential buyers.
Sources: Malta Property Alliance, Numbeo Cost of Living Index 2023, Times of Malta
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6) Focus on central areas like Sliema and St. Julian's in Malta, as they appreciate faster due to popularity and amenities
Buying property in central areas like Sliema and St. Julian's can be a smart move because these locations tend to appreciate faster.
Over the years, property prices in Sliema have soared, with the average asking price per square meter hitting €3,172 in 2024, making it one of the priciest spots in Malta. This surge is largely due to the area's popularity and the amenities it offers, which attract both locals and expats.
Since 2017, property values in Sliema and St. Julian's have jumped by over 70%, climbing from around €1,500 per square meter to €2,535 in 2024. This impressive growth reflects the strong demand and the area's appeal, which continues to draw in buyers and investors.
Real estate agencies highlight the high demand for properties in these areas, with the rental market also booming. In 2023, rental yields in Sliema reached 7.36%, while St. Julian's saw yields of 7.64%. These figures show a healthy rental market, which further boosts property values.
Living in Sliema or St. Julian's means enjoying a vibrant lifestyle with easy access to shops, restaurants, and the sea. This lifestyle appeal is a key factor in why property prices in these areas continue to rise, making them a solid investment choice.
Sources: Business Now, Times of Malta
In this video, we can see that Sliema and St. Julian's are premium areas with higher rental rates and property values, confirming their status as top locations for property appreciation.
7) Consider properties with sea views or historical features in Malta, as they are highly desirable to locals and tourists
Investing in Maltese properties with sea views or historical charm is a savvy way to boost your profits.
Imagine owning a 4-bedroom apartment in Saint Julian's with a breathtaking sea view, listed for over $3 million, compared to a smaller 2-bedroom in St Paul's Bay at around $360,000. People are willing to pay a premium for these stunning views, making them a hot commodity. This isn't just a trend; it's a consistent pattern that savvy investors are capitalizing on.
Demand for these properties remains high, which means better resale values and rental yields. Reports from 2023 and 2024 highlight this ongoing trend. Tourists flock to Malta for its rich culture and heritage, often seeking accommodations with sea views or historical significance. This preference is growing, with private accommodation stays jumping from 20% in 2001 to 57% in 2017.
Real estate agents in Malta are well aware of this trend. They frequently highlight the unique appeal of properties with sea views or historical features, noting their fast sales rate and high demand. New developments in prime areas are particularly sought after, making them a wise investment choice.
These properties aren't just about aesthetics; they offer a lifestyle that both locals and tourists crave. Owning a piece of Malta's scenic beauty or historical charm means tapping into a market that's always in demand. Whether it's the allure of the sea or the charm of history, these features add significant value.
For those looking to invest, understanding the local market dynamics is key. Properties with these sought-after features are not just investments; they're opportunities to be part of Malta's vibrant culture and stunning landscapes.
Sources: Real Estate Listings, Tourism Statistics, Articles or Features in Real Estate Magazines
8) Consider Malta’s stable property market for safer long-term investments, as it has a history of steady growth compared to volatile markets
Malta's property market is a stable and promising option for long-term investment.
Over the years, property values in Malta have shown a remarkable increase, rising over tenfold since 1980. This trend continued into 2023, with the Property Price Index climbing by 7.1%, driven by high demand in popular areas like Sliema and Valletta. Such consistent growth makes Malta a safer bet compared to more volatile markets.
One reason for this stability is Malta's low market volatility compared to other European countries. Even during global economic ups and downs, Malta's real estate has held its ground. In 2023, property transactions increased by 3.5%, showing a steady demand that supports this stability.
Malta's strong economic performance also plays a role in its property market's resilience. The country's real GDP growth was 12.3% in 2021 and 6.9% in 2022, helping to counteract previous economic challenges. This economic strength is reflected in the property market, with prices rising by 8.3% nationwide in the year to Q2 2023.
For those considering buying property in Malta, it's worth noting that the market's stability is backed by government statistics and economic indicators. This makes it an attractive option for investors looking for a reliable market.
With its steady growth and economic resilience, Malta's property market offers a secure investment opportunity in a picturesque Mediterranean setting.
Sources: Frank Salt Real Estate, CEIC Data, Global Property Guide
We believe this video explains how Malta's property market remains relatively stable with a history of consistent growth, making it a safer option for long-term investment.
9) Avoid properties needing major renovations in Malta, as construction costs can be unexpectedly high and time-consuming
Buying a property in Malta that needs a lot of work might not be the best move because construction costs are unpredictable and can skyrocket.
In 2023, Malta saw a significant shortage of construction workers, which means renovations could take longer and cost more. Even though there's a push to bring in skilled workers from abroad, getting permits and approvals is a slow process.
Building materials are also pricey, with the construction cost index still high by June 2024. Compared to other European countries, Malta's construction costs rank among the highest, making renovations a costly affair.
Regulatory delays add another layer of complexity. Getting permits and approvals can be a lengthy ordeal, which can stretch out the timeline and inflate the budget for your project.
Many investors and expats have shared stories of unexpected hurdles, highlighting the difficulties in navigating Malta's regulatory environment.
Sources: Trading Economics, Schengen News, IBISWorld
10) Be ready to negotiate property prices in Malta, as locals often haggle for significant savings
In Malta, negotiating property prices is a common practice that can lead to significant savings.
Locals often haggle, and it's not unusual for property sales to close below the initial asking price. For instance, in 2023, while apartment prices went up by 9.3%, maisonettes saw a 13.5% increase, hinting at potential wiggle room in certain property types.
Real estate agents in Malta stress the importance of negotiation. They suggest that buyers should research the market and analyze recent sales data to make smart offers. This advice is backed by stories of buyers who successfully snagged lower prices, taking advantage of the ever-changing Maltese property scene.
Local real estate publications often talk about negotiation tactics, like seeing things from the seller's point of view and setting a realistic budget. Stories from both locals and expats highlight successful haggling experiences, showing that negotiation is a cultural norm in Malta's real estate market.
Understanding the seller's situation can be a game-changer. Sometimes, sellers are in a hurry to close a deal, which can be a perfect opportunity for buyers to negotiate a better price. Being prepared to haggle can really pay off.
Sources: Global Property Guide, Zanzi Homes, Frank Salt Real Estate, Property Malta.biz
11) Focus on eco-friendly homes in Malta, as the shift towards sustainability can boost property value
Malta is seeing a boom in eco-friendly and energy-efficient home sales.
People are drawn to these homes because they come with smart technologies and sustainable features that make life easier and greener. Imagine having solar panels on your roof and a system that manages waste efficiently—these are the kinds of perks that are making these properties hot on the market.
The Maltese government is also in on the action, pushing for green building standards and offering incentives to developers who go eco-friendly. This is all part of a bigger plan to cut down on carbon emissions and boost energy efficiency across the island, which is a win-win for everyone.
Buyers are getting smarter about their choices, too. There's a growing demand for properties with green certifications, as people become more conscious of their environmental footprint. This trend is not just a fad; it's expected to keep growing, making these certifications a key factor in property value.
And let's not forget the financial perks. Energy-efficient homes are not just good for the planet; they also boost property values. Using sustainable materials and designs makes these homes more attractive to buyers who want to live green. Plus, they come with the bonus of lower utility bills, which is always a nice touch.
So, if you're thinking about buying property in Malta, going green might just be the smartest move you can make. Eco-friendly homes are the future, and they offer both environmental and financial benefits that are hard to ignore.
Sources: MeDirect, Constructive Voices, JK Properties, European Commission
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12) Never forget that while Malta offers freehold properties, some are leasehold, which might affect long-term returns
When buying property in Malta, knowing the difference between freehold and leasehold ownership is crucial.
Freehold means you own both the property and the land, giving you complete control without ongoing fees. This is attractive because you can make changes without asking a landlord, making it a more secure investment.
Leasehold, however, means you own the property for a limited time, not the land. This often involves extra costs like ground rent and restrictions on property changes, which can affect resale value. As the lease term shortens, the property's value might drop, a key point for investors.
In recent years, Malta's property market has seen a rise in prices, especially for apartments and maisonettes. While freehold properties generally fetch higher prices, the specific impact of leasehold on these trends isn't always clear.
Freehold properties are more desirable partly because they lack leasehold restrictions, making them a safer bet for long-term investment. Buyers often prefer them for their flexibility and potential for appreciation.
Understanding these differences can help you make a more informed decision when investing in Malta's real estate market. Choosing the right type of ownership can significantly impact your investment's success.
Sources: Attard Baldacchino, Global Property Guide, PropNex
13) Understand Malta’s notarial system, where one notary represents both buyer and seller, which may confuse those used to separate legal representation
In Malta, the notarial system is unique because a notary represents both the buyer and the seller in property deals.
Unlike in many other countries, you won't need separate legal representation when buying property in Malta. Here, the notary acts as a neutral party, ensuring everything is above board for both sides. This might seem odd if you're used to having your own lawyer, but it's a well-established practice that simplifies the process.
Real estate agencies in Malta often provide guides to help you understand this system. They explain that the notary's role is to mediate and make sure all legal aspects are covered. This dual representation can be a bit confusing at first, but it’s designed to streamline transactions.
Foreign buyers often share their experiences online, noting that Maltese notaries are professional and approachable. For instance, Ms. Muddiman, a foreign buyer, found her notary to be proactive and friendly, which is a common sentiment among expatriates.
Online forums and expat communities are great places to learn more about the buying process in Malta. They offer firsthand accounts of how the notarial system works, highlighting both the challenges and the benefits. These discussions can be invaluable for anyone considering a property purchase in Malta.
Remember, the notary in Malta is a public officer who handles legal documents like Wills and property deeds. This dual role is crucial in maintaining the integrity of transactions, as they attribute public faith to these documents and ensure their safekeeping.
Sources: Malta Notarial Services, Malta Family Law
14) Build relationships with local Maltese agents for insider knowledge and better deals, as the property market is influenced by local customs
The Maltese property market is deeply rooted in local customs and traditions.
In recent years, especially around 2023 and 2024, local real estate agents have been pivotal in property transactions. They offer not just listings but also insider knowledge of neighborhoods and handle all the paperwork, making the process smoother for buyers.
In Malta, business culture places a high value on personal relationships. Building a rapport with a local agent can lead to better deals and terms. Many foreign buyers have found that these relationships are key to navigating the complex Maltese real estate market.
Local agents often have access to exclusive property listings that aren't available to the general public. This means they can offer you options that others might not even know about, giving you a competitive edge.
Testimonials from foreign buyers highlight how these relationships have been instrumental in their successful property purchases. They emphasize the importance of understanding the nuances of Maltese neighborhoods and how local agents can guide you through this.
Sources: Frank Salt, Sara Grech, Open House
We made this infographic to show you how property prices in Malta compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
15) Understand local property tax implications in Malta to avoid common mistakes that can impact overall profitability
When buying property in Malta, understanding the local tax rules is essential.
Many foreign investors have been caught off guard by unexpected tax liabilities because they didn't fully grasp the local tax landscape. For instance, while the standard property transfer tax rate is 8%, there are exceptions. If you sell a property within five years of buying it, you might qualify for a 5% final withholding tax instead. This can make a big difference in your overall costs.
It's not uncommon for foreign buyers to overlook the 5% stamp duty on the purchase and sale contract sum. This oversight can significantly impact your bottom line. There are also potential reductions or waivers available, especially for primary residences or transfers between spouses, but these can be easily missed without proper guidance.
Many surveys show that foreign investors often have misconceptions about Maltese property taxes. A common belief is that there is no annual property tax in Malta, which is true. However, they might not be aware of the various one-time fees and duties, like stamp duty and potential capital gains tax on property sales. This lack of understanding can lead to legal issues or fines.
Statistics indicate that a significant number of foreign property owners in Malta have faced problems due to non-compliance. This is often because they didn't fully understand the tax implications. It's crucial to be aware of these potential pitfalls to avoid any legal troubles.
Be cautious of the common mistake foreigners make by not thoroughly understanding the local property tax implications, which can affect overall profitability. Proper knowledge and planning can help you navigate these complexities and make your investment more profitable.
Sources: Imin Malta, CSB Group, Accountant Malta
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility. Finally, please note that we are not affiliated to any of the sources provided. Our analysis remains then 100% impartial.