Property tax in Malta is almost entirely transaction-based: there is no annual property tax, no council tax, and no yearly bill tied to what your home is worth. You pay when you buy, when you sell, and when you earn rental income. The main charges are a 5% stamp duty on the purchase, a final withholding tax on the sale that ranges from 2% to 12%, and either a 15% flat tax or progressive income tax on rent received.
No Annual Property Tax
Once you close on a purchase and pay stamp duty, no recurring government tax attaches to the property. You can hold it indefinitely without any yearly assessment arriving. The only recurring cost that can be tied to the property itself is ground rent, and that applies only to properties held under emphyteusis rather than freehold. Ground rent is paid to a private landlord, not the state.
The practical effect for owners is straightforward: plan for the costs at purchase, the tax at sale, income tax if you let the property, and ground rent if the title requires it. Holding costs from the Maltese government are zero.
Stamp Duty When You Buy
Buyers pay stamp duty under the Duty on Documents and Transfers Act (Chapter 364) at a standard 5% of the purchase price or market value, whichever is higher.1Malta Tax and Customs Administration. Buying Property The Commissioner for Revenue collects it, with the notary responsible for making sure it is paid.
Payment is split in two. When the promise of sale (the konvenju) is signed, the notary pays a provisional 20% of the total duty, which works out to 1% of the property value on a standard purchase.2Malta Tax and Customs Administration. Promise of Sale The remaining 4% falls due when the final deed is signed. Late payment triggers interest, and the deed cannot be formally registered until the duty is settled.
First-Time and Second-Time Buyer Relief
First-time buyers of a residential property pay no stamp duty on the first €200,000 of the value.3Servizz.gov. First-Time Buyer – Stamp Duty Exemption (€200,000) On a €300,000 apartment, duty applies only to the €100,000 above the threshold, saving €10,000. Malta’s 2026 budget made this exemption permanent. A separate €1,000 annual grant payable over ten years is also available, and the Deposit Assistance Scheme now covers properties valued up to €250,000.
A second-time buyer scheme refunds stamp duty paid on the first €86,000 of a replacement home for owners who sell their primary residence and buy again within twelve months.4Malta Tax and Customs Administration. Guidelines on the Second-Time Buyers Scheme The refund threshold rises to €150,000 for buyers with a registered disability.
Property Transfer Tax When You Sell
Sellers pay a final withholding tax under the Income Tax Act (Chapter 123). The notary deducts it at closing and remits it to the Commissioner for Revenue, so the seller has no separate return to file. The tax is calculated on the transfer value rather than the profit, which removes the need for a capital gains calculation in most cases.
The rate depends on when the property was acquired and how it was used:5Malta Tax and Customs Administration. New Property Tax System – FAQ
- 8% is the standard rate and has applied to most transfers since January 1, 2015.
- 5% applies when the property is transferred within five years of acquisition and is not part of a development project. Development works during those five years generally lose the rate.
- 5% also applies to properties in an Urban Conservation Area, or scheduled buildings, where the seller completed restoration under a Planning Authority permit applied for on or after January 1, 2015.
- 10% applies to properties acquired before January 1, 2004, where no promise of sale or transfer notice was given to the Commissioner before November 17, 2014.
- 12% is a transitional rate for properties acquired before January 1, 2004, where such a notice was given before November 17, 2014. It is also available as an elective option on inherited or donated property, calculated on the gain between acquisition value and transfer value rather than the full sale price.
- 2% applies where the property was declared as the seller’s sole ordinary residence at purchase, the sale happens within three years of acquisition, and the seller owns no other residential property at the time of sale.
The 12% election on inherited or donated property is worth knowing because it is one of the few situations where tax is charged on profit rather than total value. A seller who inherited a property that has barely appreciated may pay less at 12% of the gain than at 8% of the full sale price.
Sole Ordinary Residence Exemption
Sellers who lived in the property as their main residence for at least three consecutive years immediately before the sale can be exempt from transfer tax entirely.5Malta Tax and Customs Administration. New Property Tax System – FAQ The disposal must happen within twelve months of vacating. The definition of “own residence” includes a garage attached to the home, or one no larger than 70 square meters within 500 meters, as long as both are transferred in the same deed.
The three-year clock runs from actual occupation, not from the date on the deed. Move out more than a year before completing the sale and the exemption is lost, regardless of how long you lived there.
Tax on Rental Income
Landlords choose between two treatments. The simpler is a 15% final withholding tax on gross rental income, available for both residential and commercial lets.6Malta Tax and Customs Administration. Rental Income Taxed at 15% – Article 31D of the Income Tax Act Choosing 15% means no deductions, no set-off, no refund, and no further tax. Rentals between related parties are excluded from this option.
The alternative is to declare rental income on a standard return and pay tax at progressive rates, with deductions allowed for expenses under specific rules.7Malta Tax and Customs Administration. Manual on the Taxation of Rental Income The progressive route can be cheaper for landlords with significant maintenance or financing costs, but it requires proper records and annual filing. Most small landlords choose the 15% flat rate for its simplicity.
Duty on Inherited Property
Malta has no standalone inheritance tax, but a causa mortis duty applies to immovable property transferred on death. It is charged on property in Malta and Gozo regardless of where the deceased lived or the heir’s nationality.8Malta Tax and Customs Administration. Exemptions – Inheritance Several exemptions reduce the burden for close family:
- A surviving spouse is exempt on their share of the couple’s sole residence.
- Children inheriting a parent’s residence are exempt if the causa mortis declaration is filed within one year of the date of death.
- Heirs with a registered disability are exempt on all property inherited from parents.
Malta’s 2026 budget introduced a reduced 3.5% rate on the first €400,000 of an inherited property’s value, up from a previous €200,000 threshold. When an heir later sells inherited property, the elective 12% rate on the gain remains available in place of 8% on the full transfer value.
Ground Rent on Emphyteusis Property
A significant share of Maltese property is not freehold. It is held under emphyteusis: the emphyteuta owns the building and pays an annual ground rent (ċens) to the dominus, who retains underlying rights to the land. This is not a government tax, but for buyers it functions as the one recurring cost that can be tied to the property itself. Ground rent comes in four types:
- Perpetual non-revisable: a fixed annual payment. It can be redeemed at any time by paying 20 times the annual rent. A €50 rent buys out for €1,000.
- Perpetual revisable: the annual payment increases periodically under the original contract. Redemption is only possible within twelve months following each revision date, at 20 times the revised amount.
- Temporary non-revisable: a fixed payment for a set number of years. Redemption must be negotiated with the landlord; there is no statutory formula.
- Temporary revisable: both increases periodically and expires after a fixed term. Redemption is also negotiated.
Check the type before signing. A small perpetual non-revisable rent is a minor cost that can be permanently eliminated for a modest sum. A perpetual revisable rent can grow meaningfully over decades, and redemption is restricted to narrow windows. The ground rent type and terms are set out in the property’s deed.
Rules for Non-EU Buyers
EU citizens can generally purchase in Malta without special authorization. Non-EU citizens face restrictions under the Immovable Property (Acquisition by Non-Residents) Act (Chapter 246) and must obtain a permit from the relevant authorities.9Malta Tax and Customs Administration. Acquisition of Immovable Property in Malta by Non Residents A non-EU citizen buying a primary residence can obtain a permit but cannot already own other immovable property in Malta. Purchases for business use are approved only where the property supports an industrial, tourism, or economic development project. Secondary residences require prior authorization. These permits do not change the tax rates; stamp duty and transfer tax apply the same way as for Maltese or EU buyers.
Other Costs at the Deed
Notary fees typically run 1.5% to 2.5% of the purchase price, split between the promise of sale and the final deed. The notary handles due diligence, drafts both contracts, and ensures all tax obligations are met before registering the transfer.
Sellers must supply an Energy Performance Certificate before completing a sale. The Building Regulations Office charges a €75 registration fee per certificate, and the assessor’s professional fee is separate. An EPC is valid for ten years, and failing to produce one when required can carry a fine of up to €5,000.
Estate agent commissions on residential sales run at 5% of the sale price plus 18% VAT, usually paid by the seller. A sole-agency arrangement for a defined period can bring the commission down to around 3.5%. The sale and lease of immovable property are exempt from VAT, so no VAT applies to the purchase price itself, only to professional services such as agent and assessor fees.