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Last Updated on 30th January 2025

Malta has long been a draw for retirees looking for the perfect combination of high living standards, low costs of living, a warm and comfortable climate, beautiful coastal scenery and charming historic villages and towns – and the Maltese tax laws are no small part of the appeal.

While Malta is one of the smallest countries in Europe, it outperforms many of its much larger neighbours in providing residents with affordable living costs. Its well-developed healthcare system, reasonable real estate prices, and comparably low costs of groceries and utilities ensure that retirement incomes stretch further.

The tax system provides generous advantages specifically designed for retirees. Although conditions apply, many expatriates can qualify for a ‘special tax status’ alongside a residency permit, with a low flat-rate tax against all foreign-sourced pension incomes.

The Key Tax Benefits of Maltese Retirement for Non-EU Nationals

There are two main visa categories that tend to command the greatest interest from retirees, both with respective advantages:

  • The Malta Retirement Programme is available to foreign national retirees. It excludes applicants who are employed and is designed for those who receive a pension as their regular or main income source. It was extended in 2020 to enable non-EU nationals to apply, with a tax status that applies a 15% flat tax rate on all overseas pension income remitted to Malta.
  • The Maltese Global Residence Programme is slightly different in that it does not prohibit holders from working. However, it offers a residency permit and similarly low taxation, provided applicants purchase or rent a qualifying property.

Of course, low taxation isn’t the only reason so many retirees choose to relocate to Malta.

However, when combined with the vibrant expatriate community, low crime rates, peaceful environment, and near-perfect Mediterranean climate, it provides an added incentive or differentiating factor for those considering alternative destinations.

Gaining Special Tax Status Through the Malta Retirement Programme

The Malta Retirement Programme provides residency permits for retirees keen to settle in Malta. It is open to applicants who are retired, not employed by any business and for whom their pension income comprises the majority of their income.

An exception applies for those who sit as non-executive directors for foundations and boards within Malta, but otherwise, the visa excludes applicants who are currently working or intend to work in the country.

This residence permit is valid for five years, and applicants are expected to prove that they meet minimum annual income requirements while also evidencing that they have a permanent home in Malta. Conditions apply, including the following:

  • Retirees must be in receipt of a pension, and 75% of the income remitted to Malta must originate from a recognised pension fund.
  • Applicants must hold either property ownership or a long-term lease, with real estate ownership worth at least €275,000. The threshold is lower for homes in southern Malta or Gozo.
  • Alternatively, they must rent a property for at least €9,600 a year, again with a reduced threshold for properties in low-population density regions.

Those who qualify and retire in Malta through this visa pay a flat rate of 15% tax on all foreign-source income remitted to Malta, albeit with a minimum annual tax obligation of €7,500 plus €500 for every dependent.

Personal income arising within Malta is taxed at 35%, and there is a €2,500 application charge for those wishing to be considered for the special tax status scheme.

Understanding the Maltese Global Residence Programme for Retirees

Although the Global Residence Programme (GRP) may sound similar, the biggest contrast is that applicants can continue working or relocate to Malta ahead of their planned retirement age while taking advantage of the flat rate tax.

Often regarded as one of the simplest ways to achieve residency status within the EU, applicants can include family members in their submissions, provided they can evidence a stable, regular income source, comprehensive health insurance, and accommodation within Malta.

Similarly to the Retirement Programme, the visa is valid for five years, although it is renewable.

Applicants must meet several financial requirements, including paying a non-refundable €6,000 application fee, demonstrating financial independence, and either purchasing a home or renting a property worth at least the minimum thresholds.

Like the Retirement Programme, visa holders pay a flat rate of 15% income tax on earnings from outside Malta, with a minimum tax liability of €15,000 a year.

Gaining Permanent Residency as an Expatriate Retiree in Malta

A further option exists through the Malta Permanent Residence Programme, which offers affluent expatriates the option to secure long-term residency, leading to permanent residency or citizenship status, in return for investments and contributions to the Maltese economy.

Physical stay requirements are minimal, which means retirees or expatriates of any age have the freedom to travel as much as they wish. However, investments made in real estate must be held for at least five years for their residency status to remain valid.

Applicants must purchase or rent a property, again with minimum values or lease costs, and remit an additional €2,000 donation to an NGO within Malta.

Depending on whether they are buying or renting a property, they must contribute €30,000 or €60,000 to the economy and pay a €50,000 administration charge plus a further €10,000 per dependent alongside the cost of investing in a qualifying home.

After five years, permanent residents can potentially apply for citizenship if they adhere to the conditions that make them eligible for naturalisation citizenship.

A similar scheme provides citizenship by investment, although with a minimum contribution of at least €600,000 for those keen to fast-track their citizenship after 36 months of residency or €750,000 for applicants who are willing to make higher investments to secure citizenship within one year.

You’ll find further guidance on managing your tax liabilities and financial position as an expatriate in Malta through our earlier guide, Living in Malta: Tax Advice for Expats, or you can contact the local Chase Buchanan team to discuss your affairs in more detail.

Our offices are located in St Julian’s, and we are on hand to assist with all aspects of your financial planning and wealth management, ensuring you maximise the tax efficiencies available while having a firm grasp over all the implications of your relocation and long-term retirement in Malta.

*Information correct as at January 2025