Advanced
Price Range From To
Other Features



Comprehensive Guide To Property Investment In Malta

When it comes to investing in property, more foreign nationals than ever are interested in Malta as their location of choice. If you are one of them and you are not sure where to start, this guide will take you through the process of property investment in Malta.

Here are the topics we will cover:

- Malta in a Nutshell
- Reasons Why People Invest in Malta Properties
- Property Investment in Malta vs Other Countries
- Things to Consider Before Investing
- Types of Properties
- The Buying Process



Malta in a Nutshell

Over the past few years, Malta received a lot of attention for its real estate market’s steady growth. This has positioned the country as an ideal location for foreign investors looking to buy property either as a holiday home or an investment. Before dipping into your pockets and looking into buying property in Malta, here are some quick facts about this country:

The Maltese islands are an archipelago situated half-way between Africa and Europe and is the perfect mid-way point between the two. The island group consists of Malta, Gozo, Comino, Filfla, St. Paul’s Islands, Manoel Island and several other smaller ones. Malta is 93km from Sicily and 300km from the North African Coast.

Malta is an independent sovereign country, having gained independence from the British in 1964 and the smallest in the EU, only covering 316 km². It is
part of the Schengen territory, which promotes free trade and travel for its residents between member countries.

Malta is also affiliated through trade agreements, as part of its EU membership, with countries such as Iceland, Liechtenstein, and Norway.

Malta is the eight most densely populated country in the world and its capital is the World Heritage City of Valletta. Annual tourist arrivals top more than 2,100,000, making it one of the top destinations for Europeans looking to soak up the sun year-round.

The official languages in Malta are Maltese and English. A lot of influences on the Maltese language have been inherited from Arabic, Latin, Italian, French and English.

Foreign nationals living in Malta enjoy the fantastic Mediterranean weather with an average of about 300 days of sunshine a year. Temperatures range from 12-20 degrees Celsius in the winter to scorching daytime temperatures of 34 to 42 degrees Celsius in the summer.

Malta’s currency is the Euro (€) and it is a full member state of the EU.



Reasons Why Property Investment in Malta is So Popular

Malta has no natural resources such as mining and thus had to find other avenues to make it attractive as an investment destination, one of them being real estate. Property investment in Malta has been extremely buoyant since 2007 and forms an integral and important part of the country’s economy.

With countless new construction projects on both Malta and Gozo and property sales at an all-time high, there seems to be no slowing down. Record numbers of Promise of Sale Agreements are being signed month after month according to the latest official figures from the MDA. The result is that Malta’s property market has continually outperformed many others in the EU and this has made the country a very attractive destination, not only because of the capital appreciation of its real estate, but also because investing in real estate is regarded as liquid and therefore qualify for consideration when acquiring Malta citizenship by investment, given that certain criteria are met.

Here are more reasons why property investment in Malta is so popular:



The Lucrative Rentals Market

Malta’s rentals market is prolific and extremely profitable, both long and short-term. This is due to several factors such as its popularity as a tourist destination, the number of contract workers requiring accommodation and the influx of foreign students that attend Malta’s language schools. Lastly rental properties also provide housing for citizens and residents who do not own their own homes.

With interest rates at historically low figures, many investors opt to buy a second or even a third property to rent out. The reason for this is that the income generated through rentals far exceeds the interest charged on any of the home loans buyers may have entered into when buying their second or third property.



The Capital Appreciation For Property

It has truly been a buyer’s market in Malta for many years, if not decades. Locals place strong emphasis on home ownership as an investment and as a savings measure – simply by not having to pay rent to someone else. Ownership of property is also encouraged from generation to generation and this has contributed to demand. Malta Citizenship by Investment and residency programmes have also contributed in driving the prices of real estate up.

When we look at the past 20 years, we see a strong growth from 2000 to 2007 with the overall price index of properties for sale in Malta escalating by nearly 79% (78.9% and 53.4% when adjusted for inflation). In 2004, an unbelievable economic boom led to an astounding increase in house prices by +36.73% year-on-year. Current factors contributing to the success of the real estate market include the country’s fast growing economy, the low-interest financial environment, more disposable income by individuals and also an increase in well-paid foreign workers employed in iGaming, banking and the IT sector.

One of Malta’s main foreign investment attractions, besides the capital appreciation of its property of 5% year-on-year, is its Malta Citizenship by Investment program. This allows for the purchasing of property to be taken into account as a qualifying criteria, given the proper amounts required for purchasing a property under these schemes are met. The amount for a qualifying property rental is €16,000 p.a. or when purchasing, it is €700,000. In both instances this must be upheld (the duration of rent or ownership) for a minimum period of 5 years.

Favourable tax structures for property ownership and personal income are some of the main factors contributing to the popularity of property investment in Malta to foreign nationals.

House prices are still increasing despite the pandemic and the latest figures released by the MDA shows that for February 2021 an increase of 40% in Promises of Sales were recorded when compared to the same time last year. This calculates to an increase of more than €100,000,000 in value for February 2021.

With more properties for sale in the market one would have expected a decrease in apartment prices, but what this has done instead is to stabilise this sector of the market. Additionally, incentives from the Maltese government for First-Time Buyers were also introduced: not only as a stimulus during the advent of Covid-19, but also to aid those who are buying their very first property.



The Chance To Have A Holiday Home In Malta

Many visitors to the islands fall in love with the lifestyle and decide to buy a property in Malta. It is important to take one’s long-term vision into consideration, whether it will remain just that: a holiday home, or whether it will eventually become a permanent home. Other factors come into play such as the possibility of renting the property out while you are not there.

Most buyers simply retain the privacy and exclusive use of the properties they have bought, simply because they are not in the business of renting them out and do not plan to do so in the future. For these buyers it does not matter where the property is located; it is all about the choice of lifestyle the property offers when you are making use of it on holiday. Purchasing a property as a holiday home for exclusive personal use is a straight-forward process.

Should you be looking at renting out the property successfully, you will have to factor in the following:

- the type of property,
- its location and
- other criteria as determined by the Malta Tourism Authority
- You will also need a license to rent the property out
- As a non-resident, should you buy outside one of the Designated Areas, you will need to also apply for an AIP (Acquisition of Immovable Property) permit before you can buy
- You will also have to declare the income derived from property in Malta for rent, whether you are resident or not

The best advice is to speak to your estate agent and ask them to explain all of the rules and regulations in detail, as these are updated on a regular basis.



Property Rental Investments in Malta vs Other Countries

Long-Term Rentals Of Investment Properties

A few countries in Europe that tops the list for rental investment are Malta, Portugal, Spain, and Italy. Although property prices may be favourable in some of these countries when it comes to rural areas, the true reflection for rental properties bought as a business concern i.e. renting them out is only comparable when they are located in more cosmopolitan areas.

This is due to their proximity to airports, beaches and commercial centres providing access to shopping and entertainment as required by most tourists. The table below looks at the comparison of popular cities in their various countries and prices are based on monthly average rental asked.



Short-Term Rentals Yields Of Investment Properties Based On Airbnb

May 2019 saw nearly 9000 short-term listings on Airbnb alone for Malta and the majority of these are centred around the usual tourist areas and boasts around a 70% occupancy rate. The average price per night is around the €80 mark and this is incrementally increased by extra bedrooms, having a pool, views and the ability to accommodate additional guests. The majority of these rented out properties are entire dwellings such as apartments, houses of character and villas.

More than 2,100,000 tourists visited the islands during the first nine months of 2019 and Malta’s increasing popularity has turned the short-term let industry into a huge business. As a result of this, the demand for rental properties increased dramatically, especially in the buy-to-let category. Below are the averages rental attained by Airbnb per night, per country in £ and €.



Should You Buy One Property Or More?

Of course this all depends on the scale of economics of how much you want to spend, but let’s look at the value of €500,000. With this you can choose to buy 1, 2 or even 3 properties. It will buy one good-sized apartment in Sliema with 2-3 bedrooms, near all the touristy spots and for long term rentals you will be looking at approximately €1,200p.m. to €1,450,000p.m. for long-term rentals. If you resell, you will make a handsome profit in no time at all and it will also be likely to sell in a short space of time.

The same amount will buy you 2 apartments in Mosta or Naxxar, each one will bring in €900p.m. to €1,000p.m. for a long-term rental. Although the income will be more for the same amount spent, finding a tenant may be tougher than in popular and sought-after Sliema. In Mosta or Naxxar you are also going to have a difficult time establishing short-term rentals and in selling the apartments.

The best is to speak to your local area agent and get their opinion at all times.



How Is The Property Market Doing Overall?

Malta’s property market has been bullish and buoyant for many years now and it is unlikely the situation will ever change. Buyers, sellers and landlords have realised unbeatable financial returns year after year and this is likely to continue, fuelling the current construction boom.

Another plus point in Malta is that should you have owned a property for more than three years, the capital gains tax is more favourable. Combine that with the proven capital appreciation and many an investor stands a very good chance of seeing exceptional returns on their investments. This is not the case in many other European countries and the Maltese exception has catapulted the country to the top of the ladder when it comes to the capital appreciation of real estate.



How Is Malta’s Economy Doing?

Being a full EU Member State, Malta’s government is democratically elected every 5 years and the country is considered to be an advanced economy by the International Monetary Fund, PLUS a high-income country by the World Bank. It is innovation-driven and Malta proudly promotes itself as the first “Blockchain”Island. Besides tourism, I-Gaming is one of the most important industries and the economy overall is described as highly industrialised and service-based.

Due to Covid-19, Malta’s Central Bank predicted that post a contraction of 8.2% for 2020 due to the pandemic the country’s GDP will recover and grow by 5.0% for 2021, 5.5% for 2022 and an estimated 4.7% for 2023. Malta also has a very high employment rate of 74% with unemployment standing at only 3.4% for figures extracted for 2019 (as per TradingEconomics.com 2019 and the IMF).

In Malta, 3-4% out of 200,000 local households are paying monthly commercially related rents. In 2018 out of 2.6 million tourists arriving in Malta, 300,000 stayed in accommodation that was not rented meaning they were staying with friends or owned a property. As we can see, the bulk of rentals are geared towards catering for the lucrative tourism market and short-term rentals.

According to the latest figures, the most dramatic increase occurred in the last five years when tourism figures increased dramatically (excluding the recent influence of Covid-19). This caused the building industry to go into overdrive, trying to supply enough new properties for a seemingly insatiable buyer’s market and this is unlikely to end soon.

The Maltese have a strong cultural heritage of rather owning a property than renting one. It is estimated that only 20% of Maltese rent, with a good 10% of those under protection of the rentals act of 1995 (which is under revision).



Popular Types of Investment Properties in Malta

There are many available properties for sale in Malta. They come in different types and the market offers a variety of modern and traditional architecture to potential buyers.

If you fancy something unique with loads of character, then you can opt for one of the many houses of character or townhouses situated all over the island. Alternatively, if you are looking for practicality, an ideal first-time buy or a holiday home, then an apartment may just be the right type of property for you.

Here is a list of the available property types that can be found on the islands, with something that will suit everyone’s taste, budget and needs.



The Process of Buying Property in Malta

The choices are vast when it comes to houses for sale in Malta. While the buying process in Malta is very straightforward, you still have a lot of things to consider such as qualifying a budget, choosing the type of property you want, and selecting the location that suits you when buying property in Malta.

After having viewed properties with a qualified estate agent and finding the one you want, your agent will arrange for all of the documentation to be completed and facilitate the processes needed to transfer and register the property in your name as the new owner.

Good to Know

It is very important that you confirm with the estate agent and notary (in writing) that all diligence procedures have been followed. Also consider having your independently appointed Maltese lawyer scrutinise the contract before you submit your final signature. It is reassuring to know that under newly introduced property laws in Malta, all estate agents need to have a license to sell property. In order to obtain a license, they need to have done an accredited course that covers legislation, tax, and more.

Frank Salt Real Estate was the first company in Malta to get a large portion of their agents qualified and accredited. Besides the compulsory qualification as required by law, all agents that join Frank Salt Real Estate also undergo rigorous in-house training. As a client you can rest assured that when you deal with one of our agents, you deal with a true professional and a company that regards honesty, integrity and ethics as paramount. Should you be interested in buying property in Malta as a holiday home, a second home or to rent out, do not hesitate to call us.

Get in touch.


Compare listings

Compare