Understanding Property Tax and Fees in Malta

Whether you are buying your first home, investing in a rental property, or planning a relocation, understanding property tax in Malta and related fees is essential for budgeting your purchase and avoiding unexpected costs. Malta’s property market remains one of the most attractive in the Mediterranean, with transparent processes and competitive tax rates that continue to draw both local and international buyers.

Stamp Duty

One of the main costs when purchasing property is stamp duty. For Maltese and EU citizens buying their primary residence, the standard rate is 5% of the property’s value, but a reduced rate of 3.5% applies on the first €200,000. This reduction significantly lowers upfront costs for homebuyers. For non-EU buyers or those purchasing a secondary residence, the full 5% rate applies on the total value.

Notary and Legal Fees

All property transactions require a notary public to conduct searches, draft contracts, and register deeds. Notary fees typically range from 1% to 2.5% of the purchase price, depending on the property’s complexity and the notary’s tariff. Additionally, there are land registry fees and search costs, usually amounting to a few hundred euros combined.

Agency Fees

If you purchase your property through an estate agent, agency fees are generally paid by the seller in Malta. However, when renting, the tenant often pays half of one month’s rent as the agent’s commission unless negotiated otherwise.

Ground Rent (If Applicable)

Some Maltese properties are subject to ground rent, a historic form of tenure where annual payments are due to the landowner. While many properties are freehold, some remain subject to ground rent, which can be redeemable or perpetual. It is important to clarify this before purchase, as it may impact both running costs and resale considerations.

Capital Gains Tax

When selling a property, property tax in Malta includes a final withholding tax on capital gains. For most sales, this is 8% of the selling price. However, if you are selling your sole ordinary residence, owned and lived in for at least three years, you may be exempt from capital gains tax if sold within twelve months of vacating. Investors and developers may have different rates based on their transaction type and holding period.

Property Registration Fees

On completion, a small registration fee is payable to the Land Registry to officially record the transfer. This fee varies but is generally minimal compared to other transaction costs.

Ongoing Property Taxes

Unlike many countries, Malta does not impose an annual property tax or council tax on homeowners. This makes property tax in Malta highly attractive for long-term investors, as maintenance, insurance, and utility bills become the primary ongoing expenses rather than annual government levies.Understanding property tax in Malta and the related fees is vital to ensure your property purchase or investment is financially viable from the outset. With competitive rates, no annual property taxes, and clear legal frameworks, Malta remains a smart choice for buyers seeking both lifestyle benefits and sound investment opportunities in the heart of the Mediterranean.