Retiring in Malta?
Why retiring to Malta is such a good choice!
Malta is renowned world-wide as a picturesque and historic island location in the Mediterranean, situated at ancient trading crossroads between Europe, Africa and the Middle East. It has long been a favourite destination of retirees, looking to spend their golden years for several reasons: due to its geographical location, the country not only offers a temperate climate year round but it is very affordable when it comes to the costs of living. Malta has excellent healthcare and it is a very, very safe place to live. As if all of these factors are not enough, it gets even better when we look at investing in real estate and the country’s beneficial tax regime. When it comes to ticking all the right boxes, it is thus no wonder that Malta has been a favourite destination of many tens of thousands of expats from all over the world to retire to. We will be looking at the capital appreciation of real estate, taxes, healthcare and different residency options available to those who one day want move to Malta with an eye on retiring in this dreamy location. In brief, here are those all-important points at a glance:
Language and communication
As a primary concern for almost anyone moving to a different country, the good news is that English is one of the country’s official languages along with Maltese. English is primarily the business language in Malta, with most contracts drawn up in English. Most of the native population speaks English, Maltese and a large percentage can also speak Italian.
Located slap bang in the middle of the Mediterranean, Malta has on average more than 300 days of sunshine a year: ideal for anyone who loves any kind of water activities such as scuba diving, yachting, sailing, jet skiing, snorkelling or just good old fashioned swimming.
Often earning a top spot in world rankings, Malta is regarded as one of the safest countries in the world to live. This is taking either political or natural threats into account. The country’s towns and villages are very safe for adults and children alike, even at night.
When settling in Malta, numerous tax advantages are available for residents from other countries. Besides very beneficial internal tax policies, this is made even more attractive due to double-tax treaties Malta has with more than 70 jurisdictions and countries. Average taxes levied on foreigners are around 15% on income up to €5million. Income sourced from outside Malta’s borders (this includes capital gains) is completely tax-free.
Malta has no wealth taxes. Taxes are only paid on income generated in Malta, capital gains generated on Maltese property or income that is generated abroad and remitted to Malta.
If you are an expat retiree in Malta, pension from private schemes are tax exempt and capital gains realized abroad are completely tax free, even if the proceeds are remitted to Malta. With the many residency programmes available in Malta, there could even be more savings in stock, depending on which programme you fall under. This includes interest earned abroad and remitted to Malta.
Malta also has no council tax, no inheritance tax but there are different tax rates if you work: for singles, married couples and parents personal income tax rates in Malta are generally calculated on a progressive sliding scale starting at 0% for singles who earn less than €9,100 p.a., 0% for married couples who earn less than €12,700p.a. and the same for parents who have children younger than 19 years old.
When it comes to withholding taxes, non-residents who have economic interests locally have no deductions at source and this also applies to interest, dividends or royalties that are earned in Malta.
The best news of all is that capital gains tax does not apply in Malta, but the usual stamp duty is 5% for buyers and sellers have to pay 8% of the sales price achieved. Income from rental properties can either form part of your “normal” income tax or you can choose to pay a flat rate of 15% on all rental amounts gained.
Malta has a clear-cut set of rules and where the tax regime is exceptionally favourable to foreigners, more so than any other EU country.
With English as one of the 2 official languages, along with Maltese, it is very easy for anyone who speaks English to get around, work and to do business. Malta also has excellent IT infrastructure throughout the entire country and it is a high-income country with an innovation-driven economy, making Malta very stable as a financial base. The currency is the Euro (€) and Malta has a very high employment rate.
Cost of living
Malta’s quality of life is very high and the cost of living is low: offering value for money. Malta is considered cheaper than Italy but slightly more expensive than Spain.
A popular choice for retirement
In a recent report by International Living, Malta was placed at number three in the top five global retirement destinations for expats.
Current life expectancy for Malta stands at 82.91 years, a 0.19% increase from 2021.
Malta was in 5th place with best healthcare globally, as rated by The World Health Organization! This was out of more than 100 countries who took part in the survey according to internationalliving.com.
As a legal resident in Malta who contributes to the Social Security System, you will have full access to free healthcare. For those that come from the UK, should you have a registered S1 form and legally lived in Malta prior to 1 January 2021, your access to healthcare will remain the same as before. If you are planning to retire in Malta, several options such as using your GHIC card or using an RHA Entitlement card will do for short stays, otherwise once settled here, your best option is to get affordable private health insurance from one of the many companies on the islands.
Health clinics can be found all over Malta and the main hospitals are:
- Mater Dei Hospital: An Acute General Teaching Hospital
- Sir Anthony Mamo Oncology Hospital : An Oncology Hospital
- Karin Grech Hospital: Rehabilitation Hospital
- Sir Paul Boffa Hospital: A Specialised Hospital for Oncology, Palliative Care and Dermatology
- Vincent De Paul Residence: Long-term Care
- Mount Carmel Hospital: A specialised Psychiatric Hospital
- Zammit Clapp Hospital: Nursing Home
- Gozo General Hospital
The quality of Malta’s Primary Education is extremely high and it is based on the UK model. Public schools are free for children of residents but many church and private schools are available for those that prefer this option, but it is not free. Malta also has over 40 English language teaching schools and many thousands of youngsters come to Malta each year to master the use of the language.
Property investment and capital appreciation
Malta’s property sector has been untouched by the economic global crisis of 2008 and more recently, Covid-19. More properties were sold in the last two years than ever before. It is a very big part of the economy and according to t The National Statistics Office of Malta as reported on 8 July 2022, the Property Price Index (PPI) for the period Q2/2021-Q1/2022 (the first quarter of 2022) stood at 139.52, a rise of 6.7 per cent when compared to the corresponding quarter of 2021.
For foreigners that attain residency in Malta, whether through being self-employed, work or retirement, the advantages are numerous. Malta is part of the EU and the Schengen Zone and having residency in Malta means you will get border-free travel access to the rest of Europe. The bonus is that most major European cities are only a two hour flight away from Malta’s International Airport.
Tailor-made residency programmes
Many residency programmes are available to suit any person wishing to come and live, work or retire in Malta. This ranges from work visas to acquiring Citizenship through investment and can all be viewed in detail the Frank Salt Real Estate website. We look at them in brief:
Malta retirement programme
If you are interested in taking up this programme, you will benefit from a tax rate of 15% on any income arising outside Malta which is received in Malta by the beneficiary and it may be possible to claim relief of double taxation.
Under this visa you have to actually live in Malta for a minimum of 180 days per year. One can benefit by transferring one’s tax jurisdiction from a high to a lower tax rate country (Malta) and this is available to EU/EEA and Non-EU/EEA persons.
This status or residency may be granted to those that have legally resided in Malta for 5 continuous years, given certain criteria are met.
If you are staying in Malta for less than six calendar months per year and have no intention of establishing residence in Malta, you will not be taxed on foreign income or gains whether it is remitted to Malta or not.
Visa for education and study purposes
Through applying for this, the candidate or student will get residency for the whole period of attending a private school, the University of Malta or a College.
Citizenship by direct investment
If you are interested in acquiring Maltese Citizenship through means of investment, this is the option for you. It is officially called The Malta Citizenship by Naturalisation for Exceptional Services by Direct Investment.
Malta permanent residence programme (MPRP)
This is a residency by investment programme that will allow the beneficiary a right to settle, stay and reside in Malta permanently and also allows for immediate members of the main applicant’s family to join.
Malta global residence programme
This allows people who buy or rent a property in Malta under the required minimum amounts and simultaneously direct their income over a certain required limit to qualify for a residence permit.
- Malta residence programme for EU Nationals
This residence programme is aimed at high net worth nationals who want to make Malta their home.
Driving and driver’s licenses
Driving in Malta is on the left side of the road. Most foreigners from Non-EU countries will have their license honoured for a period of one year, where after you will have to get a Maltese driving license. Those from the EU do not need to exchange their licenses but are encouraged to do so. Nationals from Australia, Switzerland and the United Arab Emirates (only in case of Maltese or UAW nationals) can also be exchanged for a Maltese driving licence). Any Non-EU National will have to sit and write the theory and do the practical exams after one year.
Retiring and buying a property
Non-EU Nationals will need to buy a property under an AIP (Acquisition of Immovable Property) permit like anyone else who has not lived in Malta for the past five years. This only applies if you buy outside one of the Approved Designated Areas. Should you buy a property in a designated area, you can buy as many as you like and even rent them out without the need for any AIP permits. A wide range of locations, property types and styles are available that will suit any budget.
Bringing your pets to Malta
You will have to make sure your pet complies with all the rules required to import your pets to Malta. This is a lengthy process and can take more than 3 months of preparations.
Interested in retiring to Malta? Contact us!
Frank Salt Real Estate covers the whole of Malta and Gozo. We know the market and we have the properties, whether you want to buy or are looking to rent with an eye on retiring here. With more than 50 years of experience in the local real estate market, you are guaranteed of wise and sound investment advice.