Malta is a unique island nation known for its wonderful weather, welcoming communities, lively social scene, and beautiful environment. Recently reported as the seventh most desirable place in the world to own a second home, the fact that English is widely spoken and the variety of vineyards, water sports, fine dining opportunities and near-perfect weather is hard to beat.
Being just over three hours by plane for British property owners and expats, this idyllic island is on the same latitude as Los Angeles, allowing those to escape the chill of the winter for the warm subtropical climate.
Let’s look at the practicalities of buying a second home in Malta and the opportunities to spend at least some – if not all – of the year in this Mediterranean paradise.
The Popularity of Malta With British Second Homeowners
Part of the reason Malta appeals to such broad demographics is the scope of the luxury real estate market and the surprising affordability of the islands.
A premium three-bedroom home along the highly desirable waterfront can cost just €635,000 (roughly £550,000), making Malta more accessible to interested UK investors than multiple contenders, including Montenegro and less localised destinations such as Canada and the UAE.
There is the convenience and reduced cost of a short-haul flight, meaning British property owners can touch down at Malta International after a three-hour direct journey from Gatwick, Heathrow, Stansted or most regional airports.
From there, visitors can enjoy a relaxing lifestyle, with luxury vehicle rentals costing as little as €83 per day and a tasting menu at a fine-dining establishment for €118.
Second homeowners can opt for a contemporary, ultra-modern apartment, a seafront home with direct ocean access, a rustic farmhouse on the tranquil island of Gozo, or a prestigious property with extensive grounds, a private pool and sundeck to embrace the panoramic ocean views.
Those who choose to reside in Malta for most of the year and become tax residents are not exposed to any wealth or annual property taxes. However, if a UK owner remains a British tax resident and decides to use their Maltese second home as a holiday rental for a proportion of the year they should be conscious of any potential tax liabilities against their earnings.
Understanding the Costs of Maltese Second Homeownership
Of course, purchasing a property should always be properly budgeted for, accounting for redecoration or modernisation costs, property transfer tax and legal advisory services. Your choice of location will also influence the cost of purchasing a property – despite Malta’s small size, there are multiple options.
|City / Area
|Typical Property Types
|Elegant period homes or villas
|One-bedroom apartment: €250,000 (£215,000)
Two-bedroom penthouse: €403,000 (£347,000)
Three-bedroom townhouse: €1.04 million (£896,000)
Four-bedroom villa: €1.37 million (£1.18 million)
|Townhouses with spacious grounds
|One-bedroom apartment: €212,000 (£183,000)
Two-bedroom penthouse: €513,000 (£442,000)
Three-bedroom townhouse: €1.07 million (£922,000)
Four-bedroom villa: €2.13 million (£1.84 million)
|Historic and traditional homes
|Three-bedroom townhouse: €958,000 (£822,000)
Four-bedroom palazzo: €4.8 million (£4.14 million)
|Rural village properties
|One-bedroom apartment: €199,000 (£171,000)
Two-bedroom penthouse: €327,000 (£282,000)
Three-bedroom townhouse: €485,000 (£418,000)
|Modern apartments and villas
|One-bedroom apartment: €432,000 (£372,000)
Two-bedroom penthouse: €743,000 (£640,000)
Three-bedroom townhouse: €991,000 (£854,000)
Four-bedroom villa: €3.85 million (£3.32 million)
|Period properties, palazzos, townhouses and apartments
|One-bedroom apartment: €922,000 (£794,000)
Two-bedroom penthouse: €1.18 million (£1.02 million)
Three-bedroom townhouse: €2.66 million (£2.29 million)
Four-bedroom villa: €6 million (£5.17 million)
Aside from the cost of purchasing a property, you should account for property transfer taxes of 5%, with the first 1% payable when signing a purchase agreement and the balance on completion. Notary fees tend to cost between 0.25% and 1% of the transaction.
Most foreign national buyers opt to purchase a Maltese second home within one of the Special Designated Areas (SDAs). The rules for international buyers are significantly more relaxed in these zones, and there is no requirement to apply for an Acquisition of Immovable Property Permit, or AIP, via the Maltese Ministry of Finance.
Buyers purchasing property within an SDA can own more than one residence, which is otherwise not permitted, and are allowed to rent the property out, even immediately after the acquisition – this is not allowed for non-EU citizens who own properties elsewhere in Malta.
Do Maltese Non-Residents Need a Permit to Purchase a Second Home?
Any foreign national spending more than three months in Malta will require a residency permit – although you can also buy a holiday home within the SDAs we’ve mentioned and rent it out for any periods between your visits.
You do not necessarily need to apply for residency to buy a second property and can remain a non-resident visitor. However, that does mean needing to comply with maximum stay requirements, currently limited to 90 days within each six months.
If you wish to stay in your second home for longer or visit more regularly, there are various options that may be suited to your requirements.
- The Malta Permanent Residence Programme permits expats to apply for permanent residency status by making a governmental donation and purchasing a property worth over €350,000 (£302,000), with a lower threshold for those buying a residence on the smaller island of Gozo.
- Malta also offers the Maltese Citizenship by Naturalisation for Exceptional Services by Direct Investment Program – the only citizenship by investment scheme currently available throughout the EU.
Applicants purchasing a home and wishing to live primarily in Malta can obtain citizenship by investing at least €700,000 in property and donating to a non-profit organisation approved by the government.
Should you choose to apply for a long-term residency permit or even full citizenship, it is essential to review your tax position and structure your assets, income and wealth to ensure you have full oversight of your tax profile both within Malta and in the UK.
For more information about buying a second home in Malta, budgeting for the costs of investing in real estate within the islands or reviewing your tax status ahead of an overseas property investment, please get in touch with the Chase Buchanan Wealth Management Malta team based in St Julian’s at any time.
*Information correct as at December 2023