We’ve previously written about the various routes to Maltese citizenship and residency, which covers the different visa application guidelines and investment thresholds to qualify.
In this article we expand on this topic to explain the opportunities to invest, the importance of evaluating living costs, and all the financial factors you should be aware of if you are considering life as an expatriate in Malta.
The Costs of Maltese Citizenship or Residency
One of the central topics involved is the contrast between citizenship and residency – the option you choose will affect your required relocation budget. You must be clear about which route you intend to follow because the minimum investment values change between visa categories.
As a recap (with approximate GBP equivalents):
| Governmental Contribution | Property Investment | Charitable Donation | Minimum Requirements | |
| Residency Option One | €68,000 / £57,000 | €300,000 / £252,500 South Malta or €350,000 / £295,000 in coastal resorts | N/A | Five-year investment |
| Residency Option Two | €98,000 / £82,500 | €10,000 / £8,400 rent per annum in South Malta or €12,000 / £10,000 elsewhere | N/A | Five-year rental term |
| Citizenship Option One | €600,000 / £505,000 | €700,000 / £589,000 or €18,000 / £15,000 rent per annum | €10,000 / £8,400 | Three-year residency |
| Citizenship Option Two | €750,000 / £891,000 | €700,000 / £589,000 or €18,000 / £15,000 rent per annum | €10,000 / £8,400 | One-year residency |
Deciding on a suitable visa will depend on the amount you intend to invest and your circumstances. For example, do you expect to live in Malta most of the time as a resident, or will you split your time between the UK? Not only will this dictate the right visa category, but also it will affect your tax obligations, including taxes payable against income received in Malta if you qualify as a tax resident.
You can find out more about tax treatments in our guide to Living in Malta as a Tax Resident.
Tax Implications of a Move to Malta
There are no annual property taxes in Malta, so this won’t be a leading factor in choosing whether to rent or buy a property.
However, you will need to prove residency for between one and three years to complete a Maltese citizenship by investment process. Foreign nationals are not granted a second passport until all criteria have been fulfilled, including the minimum stay.
Buying a second property in Malta could impact your overall tax liabilities if you remain a UK tax resident – although, in most cases, the amount of time you spend in each respective country will clarify your position as a tax resident in one or the other. It makes sense to consider this before making any decisions, particularly when spending €1.145 million (£964,000) on your second citizenship plan.
If you fail to meet the visa requirements, you will be unable to recoup the donations made to the Maltese government or your preferred charitable organisation.
A professional expatriate financial adviser is highly advisable since we can help you assess your plans and scrutinise your investments to verify whether they will help you achieve your financial and lifestyle aspirations.
For further information about the Maltese tax system for foreign nationals, please visit our complimentary Guide to Expat Taxes in Malta.
Investing in a Maltese Property to Qualify for Citizenship
The Maltese cities of St Julian’s, Sliema and Gzira are among the most popular property investment locations. They offer beautiful coastal views with cosmopolitan restaurants, shopping and nightlife.
Mdina and Valletta, the capital, are also sought-after cities with rich cultures and stunning architecture, although it is wise to review the properties on offer since, as with most countries, central city homes tend to command a higher price per square foot.
Retirement spots with a laidback country living atmosphere include Rabat, Zebbug or Gozo, with South Maltese locations requiring a lower property investment.
In terms of average property prices, these are as below:
- One-bedroom studio apartment – €204,707 / £172,300
- Three-bedroom apartment – €400,000 / £336,700 and above
- Three-bedroom duplex – €723,000 / £608,500
- Four bedroom villa – €1.5 million / £1.26 million
Understanding the local market is important since foreign nationals (including EU citizens) are only permitted to buy one property to live in. Homes in a ‘Special Designated Area’ have more lenient purchasing rules, but you may not necessarily be able to buy a small rental portfolio to qualify for residency.
If you invest in real estate in a Special Designated Area, you may be permitted to rent it out and earn a secondary income provided the property has a pool, is valued at over €233,000 (£196,000) and is registered with the Hotel and Catering Establishments Board, rented on a short-term lease.
Living Costs in Malta
When you proceed with a residency or Maltese citizenship application, you must review all of the above considerations and put thought into your long-term plans to ensure your finances are aligned with your expectations.
Once you move forward, you will need to budget for:
- Stamp Duty of 5% on the property value (depending on the location).
- An AIP permit currently charged at €233 (£196).
- Notary charges of between 1% and 3%.
- Searches and property registration fees – usually around €600 (£505).
Legal costs are also necessary, particularly because in Malta, you pay a deposit and a fifth of the Stamp Duty upfront when you sign an initial written contract before searches are conducted on the property title. Since the process differs from that in the UK and many other countries, you will need to provide at least a proportion of the purchase price before you can apply for a mortgage (where required).
Ongoing living costs in Malta are around 3.54% lower than in the UK, with rents almost 20% more affordable, but having a comprehensive budget, and assessing how your wealth and investments will cover these costs, will ensure you can move forward with confidence.
For more information about Maltese citizenship investments, restructuring your assets for an international relocation, or planning your finances to cover a future life in Malta, please contact the Chase Buchanan.
*Information correct as at September 2022