Malta is a picturesque, beautiful island with a rich history, warm climate, enticing coastlines, a good quality schooling system, excellent healthcare, and small, friendly communities. For many expats, the quality of life draws them to an overseas location, along with career or retirement opportunities, but considering the practicalities is essential to a successful move.
Here we look at some of the key information you should be aware of if you plan on living in Malta, including how the taxation system works.
Paying Taxes as a Maltese Resident
Residents who live permanently or for most of the year within Malta and are considered domiciles and ‘ordinary residents’ are obliged to pay taxes on their income from around the world.
Those who are residents but not domiciles normally pay tax only on the income deriving from inside the country or income originating from overseas that has been remitted to Malta. Other foreign-sourced income that is not transferred to Malta is not taxable.
Exceptions apply for residents married to Maltese domiciles, who become taxable on all worldwide income.
Taxes are charged based on calendar years, with liabilities calculated at the end of the period and payable in the subsequent year, with income tax rates ranging from zero to 35% on income over €60,000.
Income taxes vary depending on your marital and familial status, and for 2023 are as follows.
Income Tax Rates for Married Resident Taxpayers
|Income Bracket||Tax Rate|
|Up to €12,700||0%|
|€12,701 to €21,200||15%|
|€21,201 to €28,700||25%|
|€28,701 to €60,000||25%|
|€60,001 and above||35%|
Income Tax Rates for Single Resident Taxpayers
|Income Bracket||Tax Rate|
|Up to €9,100||0%|
|€9,101 to €14,500||15%|
|€14,501 to €19,500||25%|
|€19,501 to €60,000||25%|
|€60,001 and above||35%|
Resident taxpayers can receive up to €14,968 in non-taxable pension income, with an additional allowance of €3,600 for married claimants applied to income from other sources.
From January 2023, up to 40% of pension income is not included in taxable income calculations, up to €5,727 and increasing progressively until 2027.
Choosing Where to Live in Malta
Malta may be a small country, but there are several popular cities, towns and areas where expatriate communities choose to live, varying from bustling tourist regions to peaceful rural settings.
- St Julian’s and Sliema are near the harbour, with vibrant nightlife, entertainment, shops and restaurants. Property prices are higher in these areas, and traffic can be congested.
- Valletta is among the smallest European capital cities and is relatively affordable, steeped in culture and with many cafes and bars, although a little quieter than the harbour area.
- Ta Xbiex is one of the more exclusive locations within Malta, positioned next to a modern marina and a popular place for professionals, families and yacht owners.
- Pembroke and Swieqi are residential zones within a walk of St Julian’s, with a rocky coastline and a drive of around 15 minutes to Sliema.
- Madliena is found between St Julian’s and St Paul’s Bay, with stunning panoramic views. Properties in Madliena are primarily villas, ranging from luxury accommodations to refurbishment opportunities.
Another option is to consider Gozo, a smaller island off Malta that is less developed and more rustic. You can reach Gozo by ferry, with boats running every 45 minutes.
It is advisable to visit any area you are considering living in Malta, particularly at different times of the year, to assess whether it is the right place to purchase a property or find a home.
Maltese Living Costs and Standards
Malta is comparable to the UK in terms of living costs, although general consumer prices are around 0.3% lower than in Britain, and rental charges are roughly 13.5% lower.
A family of four normally needs a monthly budget of approximately €2,800 for basic outgoings, excluding rent, and an individual needs around €775 to enjoy a comfortable standard of living.
Properties are affordable, public transport is readily available, albeit limited to buses, and healthcare costs vary. Expats employed by a Maltese registered company normally receive public health insurance, with services similar to the NHS, or will need to purchase private health insurance.
Applying for a Maltese Residency Visa
Depending on your reasons for relocating to Malta, you may be eligible to apply for the Global Residence Programme, which permits foreign nationals to apply for residency status. There are tax advantages since applicants secure a flat rate tax of 15%, with an annual minimum liability of €15,000.
Criteria include purchasing a property for at least €275,000, or €220,000 in South Malta or Gozo, or renting a home for at least €9,600 per annum or €8,750 a year in lower-density areas.
The Malta Retirement Programme is an alternative residency scheme, with applicants required to receive their pension within Malta and evidence that at least 75% of their income is made up of pension benefits. The same flat rate of 15% applies to foreign-source income remitted to Malta, with a minimum annual tax charge of €7,500, plus €500 a year for every dependent.
It is highly advisable you seek professional advice before restructuring your pension benefits or retirement assets ahead of an international move. More information is available through our earlier guide to Retiring to Malta.
Malta Citizenship by Investment
Another route is to apply for an investment visa, which grants citizenship status to successful applicants. Foreign nationals must fulfil several requirements, including:
- A non-refundable government contribution of €600,000 or above.
- A property purchase for at least €700,000 or renting a home for five years for €18,000 per annum.
- Donating €10,000 to an approved charitable or not-for-profit Maltese organisation.
Foreign nationals granted a residency permit can reapply for citizenship after three years. Higher contributions and investments qualify for citizenship within 12 months. More information about visas is available through the Maltese government site.
The most advantageous visa route depends on your financial position, expectations, and plans, such as whether you intend living in Malta permanently, wish to purchase a property, and your exposure to tax liabilities in Malta and your home country.
For more information about living in Malta, your residency position for tax purposes, or planning for an internal move, please contact Chase Buchanan’s Malta office in St Julian’s or book an online consultation.
*Information correct as at March 2023