Letting for Landlords
Some landlords may think that letting a property means simply advertising it and taking prospective buyers or tenants around to the house or apartment. There is much more to it than that.
The risks incurred when placing your property on the market can be numerous. You have to ensure that you do not over-price or under-price your property. Our letting consultants at Frank Salt Real Estate know the prevailing market conditions and will be able to guide you. We will also advise you as to how you can make the property more rentable, as well as the procedures to follow to ensure a smooth rental agreement with prospective tenants.
Every day, each of our 16 branch offices receives dozens of enquiries by people who are looking at renting out a property. Due to this constant supply of clients, by placing your property on our database of properties to let, we can help you let it faster.
It is important for you to know that you will pay no fees whatsoever unless all our efforts lead to the successful let of your property.
Once you register your property with us we will include its details on our database and make it accessible to all our consultants. We will market and promote your property throughout local and overseas media, websites and exhibitions that we participate in. We will bring clients to view your property, advising you in good time of our visit. We will forward offers to you and help to negotiate the best deal possible to conclude a successful let.
Legal Letting Requirements
Are you a landlord or considering renting out your apartment or house in Malta? Thanks to the current booming economy and increasing demand for quality properties, there has never been a better time to invest in buy-to-let properties.
If you do invest in a rental property, it is important that you also take into consideration the legal requirements, in terms of Licences, VAT, Tax implications and EPC. The following information should help regarding legal requirements, however, please always refer to the respective authorities, Email us or Contact us on (00356) 2379 4796 for more details.
INCOME TAX IMPLICATIONS ON LONG TERM PROPERTY RENTALS
Landlords have two options of what tax procedure to follow:
- pay a flat rate of 15% as final tax on the gross rental income; or
- pay at the progressive tax rates, less the deductions provided for by Maltese tax legislation, which include any ground rent paid on the property, licence fees and interest on loan and a further deduction equal to 20% of the net rental income.
Owners of more than one property must tax all the properties at the same option.
INCOME TAX IMPLICATIONS ON HOLIDAY LETS (SHORT-STAY RENTALS)
Holiday rentals refer to the rental of a property for short periods, usually for furnished premises for any period less than 6 months. In such instances, tax is payable on the net rental income. This is determined after deducting any expense incurred in the production of income derived from such activity, given that upon demand, the taxpayer would be in a position to present to the Inland Revenue Authorities supporting documentation. Deductible expenses include amongst others, license fees, ground rent payable on the property, as well as renovation and maintenance costs.
Tax is payable according to the tax progressive rates applicable to the individual. One may also qualify for a preferential rate of 15%, applicable on rental income up to
€12,000, with any additional rental income being charged according to the tax progressive rates.
Landlords in Malta are not required to charge VAT. Exceptions to this rule include:
- letting for the purposes of holiday or short let accommodation, in which case the chargeable rate is 7%.
- letting of property by a limited liability company to another tax-registered person to carry out an economic activity. VAT chargeable on such transaction will be 18%..
The process to obtain this license is a simple one, which would also require that a representative from MTA visits the property to vet its standards. Subject to fulfilling the quality requisites, the license will be issued at a nominal fee. The landlords are normally also required to be VAT registered, bar some exceptions:
- has applied for the citizenship scheme, otherwise known as the Malta Individual Investor Programme (MIIP)
- would have signed an employment contract for at least one year. Therefore, the tenant will be working on the Maltese Islands with proof of contract for a year or more.
- is a student who has joined a university course which is longer than one year.
- has been in Malta for a minimum period of 12 months.
- holds a Maltese ID Card or Passport
The above-mentioned information should help, however, please always refer to the respective authorities for clarification on legal requirements, or contact a member of our property letting team for more details.
Energy Performance Certificate (EPC) Requirements
All property owners having their property for sale or for rent need to have an Energy Performance Certificate (EPC) issued by the Building Regulation Office (BRO).
The EPC is a certificate which calculates the building’s energy efficiency. This is very similar to the energy label on household appliances.
There are many ways which one can improve to become more energy efficient.