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Purchasing a property in Malta or Gozo as a main residence, a holiday home or as an investment property to rent out is a common occurrence for both local and international buyers.
Buying property in Malta is generally a straightforward process, and the transfer of ownership can take anywhere from a few weeks to a few months depending on the transaction.
There are several costs involved when purchasing real estate in Malta, and part of these costs include taxes payable during the transfer process. In this guide, we will explain the taxes and fees you can expect when buying property in Malta.
Malta is considered one of the more favourable jurisdictions in Europe when it comes to property taxation. While there is no annual property ownership tax in Malta, certain taxes and administrative fees are payable during the transfer of real estate.
Typically charged at 5% of the property value.
Usually estimated at around 1% – 2.5% of the purchase price, depending on the complexity of the transaction and the notary involved.
Applicable to buyers who require an Acquisition of Immovable Property permit, typically certain non-residents purchasing outside Special Designated Areas.
Covering legal searches and registry documentation.
The exact amount payable depends on several factors including exemptions, incentives introduced by the Maltese Government, and the relationship between the buyer and seller.
Two legal terms often used when discussing property transfers in Malta are Inter Vivos and Mortis Causa.
Inter Vivos refers to a transfer of property between living persons, typically through a sale.
Mortis Causa refers to the transfer of property through inheritance following a person’s death.
This guide focuses primarily on Inter Vivos transfers, which apply when purchasing property in Malta or Gozo.
Stamp duty is the primary tax paid by buyers when purchasing property in Malta, while property transfer tax applies to the seller, not the buyer.
The standard rate is 5% of the property’s purchase price or market value, whichever is higher.
Property transfer tax applies to the seller, not the buyer.
This tax is typically charged at 8% of the property’s transfer value for properties acquired after 1 January 2004.
First-time buyers: First-time buyers purchasing their primary residence benefit from 0% stamp duty on the first €200,000 of the property value, with the standard 5% rate applying to the remaining amount.
Is this too much information all at once? Do not worry. Annabelle and our Client Services team can support you via phone or email, explain the process step by step and guide you personally.
To begin the purchasing process, the services of a notary public must be engaged. In many cases, both the buyer and seller may use the same notary to simplify the transaction, although each party may also appoint their own legal professional.
A Promise of Sale Agreement (Konvenju) is signed.
The buyer pays 1% provisional stamp duty to the notary.
The notary registers the agreement with the Office of the Commissioner for Tax and Customs within 21 days of signing.
The provisional duty is calculated based on the higher of the declared transfer value or purchase price.
After submission, the tax authorities issue a receipt confirming that the provisional duty has been paid and the Promise of Sale agreement has been officially registered.
| Description | Amount (€) |
|---|---|
| Sold Price Achieved | 400,000 |
| Transfer Amount / Value | 360,000 |
| Stamp Duty @5% | 20,000 |
| Provisional Stamp Duty (1%) | 4,000 |
The buyer pays 1% provisional stamp duty to the notary when the Promise of Sale Agreement is signed.
The provisional duty is calculated based on the higher of the declared transfer value or purchase price.
When the final Contract of Sale is signed, the notary publishes the deed and submits the required documentation to the tax authorities.
At this stage, the buyer must pay the remaining 4% stamp duty.
Receipts are usually issued within a few weeks following submission.
The authorities may also carry out a valuation review to ensure that the declared value of the property reflects the true market value. If a significant difference is found, additional duty and penalties may be applied.
The Maltese Government regularly introduces measures aimed at supporting property buyers and encouraging investment in the real estate sector.
Eligible first-time buyers may benefit from a government grant of €10,000, distributed over 10 years. This grant is typically applied towards home loan repayments for the buyer’s primary residence.
Buyers may benefit from exemptions from stamp duty and property transfer tax on the first €750,000 of the property value when purchasing qualifying properties.
First-time buyers purchasing their primary residence are eligible for 0% stamp duty on the first €200,000 of the purchase price.
Important: These schemes are typically extended through annual government budgets, so eligibility periods may change.
Several incentives exist to encourage the restoration of traditional properties and the preservation of historic areas.
Owners who restore qualifying properties may also benefit from a VAT refund on restoration works, subject to conditions and approved expenditure thresholds.
First-time buyers purchasing qualifying traditional or vacant properties may benefit from a €15,000 grant for qualifying properties located in Malta.
First-time buyers purchasing qualifying traditional or vacant properties may benefit from a €40,000 grant for qualifying properties located in Gozo.
Note: The refund applies only to approved restoration expenditure and is subject to scheme caps and certification requirements.
First-time buyers and individuals selling their existing home to purchase another primary residence may qualify for certain stamp duty benefits, subject to scheme conditions.
Individuals selling their existing home to purchase another primary residence may qualify for a stamp duty refund, typically up to €3,000, subject to scheme conditions.
First-time buyers purchasing their primary residence are eligible for 0% stamp duty on the first €200,000 of the purchase price.
This can result in savings of up to €10,000 compared with the standard duty rate.
Previously, buyers purchasing property in Gozo could benefit from a reduced stamp duty rate of 2% instead of the standard 5%.
However, this incentive was discontinued and is no longer applicable, meaning that property purchases in Gozo are now generally subject to the standard 5% stamp duty rate, the same as elsewhere in Malta.
Certain incentives may still apply for properties located in Urban Conservation Areas (UCAs) or vacant properties undergoing restoration, which can qualify for separate tax exemptions and grants.
Compared with many European countries, Malta remains attractive to property investors due to its relatively low transaction taxes and the absence of an annual property tax.
While buyers pay transaction costs such as stamp duty, Malta does not charge an annual property ownership tax.
| Country | Buyer taxes / fees | Annual property tax note |
|---|---|---|
| Malta | Standard stamp duty is typically charged at 5% of the property value. | No annual property ownership tax in Malta. |
| Austria | Buyer pays approximately 7.6% – 10.6% in taxes and fees. | Annual property tax applies based on cadastral values determined by municipalities. |
| Belgium | Buyer pays approximately 16.7% – 27.6% depending on property type. | Annual property taxes also apply. |
| Bulgaria | Purchase costs range between 2.8% – 7.6%. | Annual property taxes range between 0.1% – 0.45%. |
| Hungary | Buyer taxes typically range from 4% – 10%. | Some resort areas apply annual property taxes. |
| Germany | Purchase costs range from 7.2% – 12.8% depending on the federal state. | Annual property tax applies. |
| Greece | Buyer taxes generally range from 3% – 24% depending on property type and VAT applicability. | Annual property taxes also apply. |
| Spain | Purchase costs range from 6% – 10.5%. | Annual property tax applies based on cadastral value. |
| Italy | Purchase costs can range between 9% – 33% depending on the type of property. | Annual property taxes also apply. |
| Cyprus | Buyer taxes generally range from 3% – 8%, with VAT applying on certain new properties. | Annual property tax position depends on the property and local charges. |
| Portugal | Buyers pay approximately 12% – 15% in taxes and fees. | Annual municipal property tax is also payable. |
| France | Buyer taxes typically range from 6% – 23% depending on property type. | VAT applies to new properties. |
| Croatia | Buyer taxes typically range from 6.1% – 9.3%. | VAT replaces transfer tax for new developments. |
Below is a general comparison of taxes and fees payable when purchasing property in several European countries.
Looking at Malta versus the countries above, one can surmise that property taxes are an essential component of any country’s economy, contributing significantly to a government’s revenue and Malta is no exception. However, the systems in place in Malta are designed to be fair and equitable, with taxes and fees calculated on a property’s value while also remaining relatively favourable compared with many other European jurisdictions.
What makes the difference in Malta when it comes to real estate and business investments is the country’s overall advantageous tax regime, coupled with the initiatives offered by the government and the strong demand for property in recent years.
If you are interested in finding out more about buying and selling residential and commercial real estate in Malta or want to discuss the possible savings in taxes that may be available to you, email us on [email protected] or simply fill in the form below and we will contact you as soon as possible!
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