Real estate investment in Malta has become increasingly popular, not only as a means of obtaining the coveted Maltese passport but also as a lucrative investment opportunity.

Known for its breathtaking landscapes, mild climate, and popularity as a location for film shoots, Malta beckons tourists and immigrants alike. 

As a member of the EU, Malta provides incredible access to a uniquely European tourist and lifestyle experience. 

If you’re serious about navigating the Maltese property market and gaining potential citizenship by investing in the country, stay with us as the WorldPassports team unravels all you need to know to purchase real estate in the country. 

*Disclaimer: All amounts mentioned in this article were correct at the time of publication and might have shifted since.

What Should You Know About Real Estate Investment?

Real estate investment involves purchasing property to generate income or capital gains, serving as a long-term asset with potential financial stability.

What Is Real Estate Investment?

Real Estate Investment involves the acquisition, ownership, and management of properties with the aim of generating income or achieving capital appreciation.

Investors diversify their portfolios by investing in different types of real estate, such as residential homes, commercial buildings, or industrial spaces.

Strategies for Real Estate Investment may include renting properties for regular income, participating in property development projects, or holding properties for long-term value appreciation.

Real estate serves as a tangible asset class, offering potential returns, diversification benefits, and acting as a hedge against inflation.

Before making real estate investment decisions, investors should conduct thorough due diligence, assess market conditions, and carefully evaluate potential risks and rewards.

What Is Malta Real Estate Investment?

Malta Real Estate Investment refers to the practice of investing in properties located in the Republic of Malta, an island nation in the Mediterranean Sea.

This form of investment encompasses various real estate sectors, including residential, commercial, or hospitality properties within Malta's real estate market.

Investors may consider Malta Real Estate Investment for reasons such as the country's stable economy, strategic location, or its popularity as a tourist destination.

Before engaging in Malta Real Estate Investment, investors should conduct thorough research, assess local market conditions, and adhere to legal regulations governing real estate transactions in Malta.

What Are The Advantages of Malta Real Estate Investment?

Investing in Malta offers significant tax benefits, potential residency or citizenship perks, and a stable market attractive to international investors seeking growth.

Why Should You Consider Malta Real Estate Investment for Citizenship and Residency?

You should consider investing in real estate in Malta, as it boasts a Mediterranean climate with year-round sunshine, incredible historical architecture, and a unique blend of Italian, Arabic, and British influences. 

Its strong economy, robust rental market, and thriving tourism industry mean that Malta’s real estate market presents a solid investment opportunity. 

Despite global economic uncertainties, Malta's property market has consistently experienced growth, offering a safe and potentially profitable investment for investors interested in real estate.¹

By European standards, Maltese real estate tends to be comparatively affordable and varied; whether you’re seeking a beachfront apartment or a house with a swimming pool, you can find it in Malta.

How Does Malta's Real Estate Market Compare With Other European Investment Opportunities?

The real estate market in Malta compares favorably with other European countries in that it's characterized by high demand and driven by a strong tourism market and foreign investment, like its European neighbors. 

But a few key differences set it apart. 

Here are some points we’ve compiled for you to consider:

• Size and population: Malta is a small island nation with a relatively small population compared to many European countries. The limited land availability and high population density can contribute to higher property prices and increased competition in the real estate market.
• Demand and supply: Malta experiences a strong demand for real estate, driven by factors such as population growth, tourism, and foreign investment. The supply of properties, especially in popular areas like Sliema, St. Julian's, and Valletta, can be limited, leading to increased property prices and competitive market conditions.
• Investment and residency: Malta has attracted significant foreign investment in its real estate sector, partly due to its citizenship and residency by investment programs. These programs offer opportunities for non-EU individuals to obtain Maltese citizenship or residency rights through property investment. This has stimulated demand from international buyers and investors.
• Property prices: Property prices in Malta have been on the rise in recent years, particularly in highly sought-after areas. Due to both local and foreign demand, the market has experienced a period of rapid price growth. However, property prices in Malta, particularly for luxury and prime properties, can be higher compared to some other European countries.
• Rental market: Malta's robust tourism industry, large expatriate population, and student population all contribute to the country's active rental market. The demand for rental properties, especially in popular areas and during peak tourist seasons, can be high. Rental yields can be attractive, although they may vary depending on the location and property type.
• Infrastructure and development: Malta has invested in infrastructure development to accommodate its growing population and tourism sector. The government has focused on improving transportation, including road networks and public transportation, and enhancing amenities and facilities. These improvements contribute to the overall appeal of the real estate market in Malta.
• Legal framework and regulations: Malta has established a legal framework to regulate real estate transactions and protect property rights. This includes measures to combat money laundering and ensure transparency in the market. Understanding and complying with the local regulations and procedures is important when engaging in real estate transactions in Malta.

Each country has its own unique market dynamics and regulatory environment. 

Apprising yourself of the real estate landscape in Malta will prepare you for a more seamless journey to investment. 

Where Can You Find Investment Opportunities in Malta?

Malta's investment opportunities are plentiful, particularly in burgeoning regions like Sliema and Valletta, known for their robust tourism and expatriate communities.

Which Regions in Malta Offer the Best Real Estate Investment Opportunities?

Several regions in Malta offer excellent potential for real estate investment.

Here’s our expert opinion on Malta's real estate regions worth considering:

• Sliema: Located along the northeastern coast, Sliema is a highly sought-after area known for its vibrant atmosphere, waterfront promenade, and array of amenities including shops, restaurants, and entertainment options. The demand for properties in Sliema is consistently high, making it an attractive investment option.
• St. Julian's: Adjacent to Sliema, St. Julian's is another popular area for real estate investment. It offers a mix of residential and commercial properties, including luxury apartments and penthouses. St. Julian's is known for its lively nightlife, marina, and waterfront dining options.
• Valletta: Malta's capital city, Valletta, is a UNESCO World Heritage site renowned for its rich history and architecture. Investing in Valletta allows for opportunities in restoration projects, boutique hotels, or high-end residential properties. The city's appeal, cultural events, and tourism contribute to the market potential.
• Marsaxlokk: Situated in the southeastern part of Malta, Marsaxlokk is a traditional fishing village known for its colorful fishing boats and fish market. The area offers a more tranquil and authentic atmosphere, attracting investors looking for a relaxed lifestyle or holiday homes with a traditional touch.
• Mellieħa: Located in the northern part of Malta, Mellieħa is known for its picturesque beaches, countryside views, and historical sites like the Mellieħa Bay and Popeye Village. The area offers a mix of apartments, villas, and townhouses, making it appealing for both residential and holiday home investments.
• Gozo: As Malta's sister island, Gozo offers a more rural and peaceful environment compared to the main island. Gozo attracts those seeking a slower pace of life, natural beauty, and traditional charm. Investing in properties such as farmhouses or villas in Gozo can offer opportunities for vacation rentals or a serene second home.

What Are the Restrictions on Foreign Real Estate Investment in Malta?

Yes, there are some restrictions on foreign investment in Malta, although most are very reasonable and easily navigable. 

For instance, non-Maltese citizens are typically only allowed to buy one property in Malta, and this property must be intended to be used as a primary residence. 

However

There are no restrictions on purchasing property in Special Designated Areas (SDAs), like large-scale developments and luxury properties, where foreigners can buy multiple properties and rent them out.

For the most part, Malta is very friendly to outside investment and has safeguards in place to regulate the recovery of capital and profits for foreign investors in Malta.²

How Does Investing in Malta Real Estate Benefit the Malta Golden Visa and Citizenship Programs?

If Malta citizenship or residency sounds appealing to you, investing in real estate in Malta could be the vehicle that takes you there.

Let’s explore the ins and outs of it:

Can Investment in Malta Real Estate Secure Malta Citizenship by Investment?

Yes, citizenship by investment (CBI) in Malta can be obtained by making a minimum investment in Maltese real estate, along with additional donations, a mandatory period of residency, and a very thorough vetting process. 

Also known as the Citizenship by Naturalization for Exceptional Services by Direct Investment program, it’s one of the most popular CBI programs in Europe, despite its rigorous due diligence process.

Does Malta Real Estate Investment Qualify You for the Malta Residency and Visa Program?

Yes, you can get residency if you invest in Malta real estate (RBI) through the Malta Permanent Residency Program (MPRP). 

Applicants can expect to invest no less than €150,000 via this route. 

After 5 years of maintaining permanent residency status in Malta, you’ll be able to apply for citizenship by naturalization. 

What Are The Steps to Invest in Malta Real Estate for Residency?

The process of buying real estate in Malta needn’t be overly complicated. 

If purchasing real estate in Malta is an investment route you’ve chosen, it’s worth planning for the journey (particularly if you’re purchasing property to participate in Malta’s CBI or RBI programs).

We’ve broken down the process into 10 simple steps for you.

Step 1: How Do You Apply for an AIP Permit in Malta Real Estate Investment?

To buy property in Malta as a foreigner, you’ll need to apply for an Acquisition of Immovable Property (AIP) permit from Malta’s Ministry of Finance.

If you’re investing in a Special Designated Area (SDA), though, you generally won’t need an AIP. 

Step 2: Why Should You Hire a Notary for Real Estate Transactions in Malta?

The notary will draw up the eventual contract of sale and confirm that the seller is legally allowed to transfer the property. 

The notary will also register the sale with the Public Registry.

Step 3: Why Consider Hiring a Lawyer for Malta Real Estate Investments?

While you can navigate the process of buying Maltese real estate without a lawyer, it’s recommended that you hire one.

A property lawyer can assist in your real estate search and will be in a position to make necessary legal checks related to the property you choose.

Also

Securing the specialized services of a lawyer will provide extra support to ensure you comply with Malta’s stringent citizenship by investment requirements.

Step 4: How Do You Locate Ideal Investment Properties in Malta?

You can find properties online, but it’s advised that you visit Malta to assist in your Maltese real estate search.

Drawing upon the services of a reputable Maltese real estate agent is likely to streamline your search dramatically. 

Step 5: How Do You Make an Offer on Malta Investment Property?

When you find your ideal property in Malta, the next step will be to negotiate the price with the seller and make an offer.

At this stage, if your offer is accepted, your lawyer can help you enter into a preliminary sale agreement with the seller. 

This agreement can specify obligations like the current owner's work schedule and agreed-upon transaction dates.

Step 6: What Is the Promise of Sale Agreement in Malta Real Estate Investment?

Also known as “Konvenju”, a Promise of Sale contract will be the next step in your buying process. 

This contract amounts to a promise to complete the sale within a specified timeframe. 

Step 7: How Do You Pay Deposits and Stamp Duty for Property Investment in Malta?

Convention dictates that you, as the buyer, pay a deposit amounting to 10% of the agreed property price to legally secure it. 

1% of the total 5% of stamp duty also becomes payable at this point. 

Step 8: How Does a Notary Conduct Due Diligence in Malta's Public and Land Registries?

Your notary public can now carry out a search for the property’s legal title in the Public Registry and Land Registry.³

Once the notary has established the root of the title, they can produce the final deed of sale.

Step 9: How Do You Finalize the Deed of Sale in Malta Real Estate Investment?

The final deed of sale will be signed by both parties (the buyer and the seller) in the presence of the notary public. 

The notary will then also be responsible for submitting the signed deed of sale to Malta’s Land Registry.

Step 10: How Do You Complete Your Investment by Paying the Property Balance in Malta?

The final step in purchasing your Malta real estate will be to settle the remaining balance on the agreed property price.

Your Maltese property is now yours!

What Costs Are Involved in Investing in Malta Real Estate? 

The costs of investing in real estate in Malta extend beyond the minimum required property investment. 

The involvement of specialized professionals and various attendant legal fees must be taken into account, too. 

Let’s go over some of those additional costs:

What Are the AIP Permit Fees for Malta Real Estate Investors?

To purchase property in Malta as a non-EU citizen, you’ll need to apply for an Acquisition of Immovable Property (AIP) permit (unless you're purchasing real estate in a Special Designated Area).

The cost of this typically comes to the equivalent of US$250.

What Is the Stamp Duty for Malta Real Estate Transactions?

Stamp duty accounts for 5% of the total property price in Malta.

What Are the Notary Fees for Real Estate Purchases in Malta?

Hiring a notary public is essential for your Malta real estate purchase process.

Notary fees typically come in at 1% to 3%.

How to Choose a Real Estate Agent for Malta Property Investments?

If you use the services of a real estate agency in Malta, its commission will ordinarily come to 3.5% of the total property price.

What Are the Lawyers' Fees for Real Estate Transactions in Malta?

Lawyers' fees in Malta vary.

Should you choose to use an immigration lawyer, it’s advisable to confirm their billing structure prior to retaining their services. 

What Are the Searches and Registration Fees in Malta Real Estate?

You can expect to spend at least US$650 on conducting the relevant searches and paying registration fees. 

What Are the Tax Benefits and Implications of Malta Real Estate Investment?

The tax implications of investing in Malta tend to be relatively forgiving, especially if you’re investing in Malta real estate under the Citizenship by Naturalization for Exceptional Services by Direct Investment program.

Malta’s tax regime hinges primarily on residency rather than citizenship. 

This means that even if your primary residence is in Malta, you could retain "non-domiciled" person status and therefore enjoy a highly favorable tax setup.

Here’s what you need to know:

How Is Locally Earned Income from Malta Real Estate Taxed?

Generally, non-domiciled citizens of Malta are only taxed on income earned or received within the country.

Malta also has double taxation agreements with more than 60 countries, including EU countries, the USA, Canada, and Australia.

What Are the Additional Tax Incentives for Real Estate Investors in Malta?

Other Malta tax incentives include no inheritance tax, no estate duty tax, no wealth tax, no property ownership tax, and no municipal taxes.

The tax perks for ex-pats in Malta can be very attractive indeed.

What Tax Exemptions Exist for Pension Income from Malta Real Estate Investment?

New legislation allows Maltese pensioners over the age of 61 to benefit from a tax exemption on any pension income earned after January 2022.⁴

Common Questions

In Conclusion

The opportunity to gain citizenship through real estate investment in Malta is an attractive proposition for those seeking to enhance their global mobility while enjoying the innumerable benefits of an excellent lifestyle and strategic location in the Mediterranean. 

Despite the intensity of Malta’s due diligence process, which ensures the integrity of Malta's citizenship program, it's indisputable that the benefits far outweigh the initial commitment.

Investing in this Mediterranean gem offers attractive tax incentives and even the opportunity for residency or citizenship in a safe and thriving economy. 

Contact our WorldPassports team for expert guidance on navigating the process of acquiring real estate in Malta. 

If the real estate opportunities in other countries interest you, head on over to our other extensive articles on international real estate investment to continue your research.