Buying property in Malta is an excellent addition to your portfolio. Buy for investment, buy-to-let, holiday home , plan B or part of your Residency/ Citizenship application.


The upswing in the Maltese property market has been ongoing for the past three years.


“Locally, people are worried that the property bubble might burst, but I don’t believe it will. Bubbles burst when an economy relies on one source of income, but our location, lifestyle, the economy and language have provided us with diverse options,”  said one of Malta’s leading estate agents managing director Kevin Buttigieg.


Malta’s real estate market is “very buoyant”, he adds. “We’re witnessing all sorts of purchases: first-time buyers, commercial investments, people securing property for their children, direct foreign investment and those buying as a result of the IIP Citizenship Scheme. Plus, the fact that people can get between a five-and-ten per cent return on rental properties means we’re also seeing heavy investment in buy-to-lets.”


The Maltese Central Bank attributes this upswing to be the effects of:



  • The exemption/waiving of the 3.5% stamp duty on the first € 150 000 for first time buyers (to continue in effect until the end of 2017)It also applies to a promise of sale signed from July 1, 2015.Buyers who have paid after July 1, 2015 (when the scheme was originally supposed to end) are still entitled to a full stamp duty refund


Other factors supporting the housing demand are:


  • The low interest rate environment, which led to higher lending for house purchases.The lending rate on new mortgages was at 2.77% in January 2017, a decline from last year’s rate of 2.82%. Housing lending rates have hovered near the 3% mark since December 2008.


  • The rise of rental income.The rent rises are attributed to the increasing number of foreign workers in the country, who are mostly living in rented accommodation. Around 71.18% of the total rental housing stock is private sector, 26.24% government-owned or council housing, and 2.58% belongs to the Maltese church.


  • Economic growth evidenced by a strong labour market. While record levels of youth unemployment have been heard from several EU Member States, the situation in Malta couldn’t be more different. In the past decade, the Maltese economy has grown showing a decline in both unemployment as well as inactivity. This has led to the creation of well over 37,000 new jobs, a figure which is all the more outstanding considering that the country has a total population of around 450,000.


  • Growth in disposable income because of Malta’s strong economic growth. An average household income in 2015 was over 41% higher than in 2007. This reflects the economy’s increased level of output and strong performance over the past few years.


Prices increased for all property types in 2016, with Maisonettes experiencing the highest increases at 20.42%, apartments increasing 15.86%, terraced houses by 13.33%; other houses such as townhouses and villas however increased by only 1.96%.. Rental yields on apartments average approximately 4.42%.


Property Restriction:


There are many restrictions on property ownership in Malta. Foreign nationals and EU citizens can usually only buy one property in Malta, and usually only for owner-occupancy, though they can buy many properties in ‘specially designated areas’ (SDA)such as Tigne Point, Portomaso, Cottoenra, Manoel Island, and Chambray.



Properties owned by foreigners can be rented out only if the property is valued over €233,000, has a swimming pool, and is registered with the Hotel and Catering Establishments Board. Foreign-owned properties can only be rented out for short-term lease agreements.


Special Designated Areas (SDA):


Special Designated Areas are prime residency areas where the conditions of acquisition are the same for Maltese and foreign residents. Property in Special Designated Areas is intended to provide top-end facilities and amenities such as restaurants, supermarkets, spas and marinas within the same area.




The current Special Designated Areas are the following.


No permits necessary:


Special Designated Areas provide an exception to the rules on residency permits in Malta, in that non-Maltese purchasers may buy property with the same rights as Maltese citizens, thus not requiring a permit from the Maltese government. Essentially this means that purchasers, whatever their nationality, are exempt from the requirement of obtaining an Acquisition of Immovable Property (AIP) permit. Once such property is acquired, it may be leased out without any restrictions.


On the other hand, certain acquisitions of property located outside Special Designated Areas necessitate an Acquisition of Immovable Property (AIP) Permit issued by the Ministry of Finance, Economy and Investment, which is issued according to the conditions set in Maltese Law.

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