Investing in real estate in Malta: European island with great potential

Malta, a small island in the center of the Mediterranean Sea, has long been attracting investors from around the world due to its strategic location, stable economy, and attractive tax system. But what prospects does real estate investment in Malta offer?

Date: 13 October

Malta, situated at the crossroads of maritime routes in the Mediterranean Sea, has a rich history dating back thousands of years. Its attractive geographical location made it a subject of conquest by many powerful empires.

Ancient temples, some of the oldest structures in the world dating back to around 3600-2500 BC, have been found on the islands. Phoenicians, Romans, Arabs, Normans, Knights of the Order of St. John, French, and British all left their mark on Malta's history.

Thanks to its strategic location, Malta played a key role in many naval battles, including during World War II. In 1964, Malta gained independence from Britain, and in 2004, it became a member of the European Union.

Malta has a Mediterranean climate with warm, dry summers and mild winters. The average temperature in July and August hovers around 30°C, while in January and February, it's around 15°C. The island rarely experiences extreme weather conditions, making it an ideal year-round destination.

Summer precipitation is rare, and the main rainy season occurs in autumn and winter. However, rainy days quickly give way to clear, sunny days, making Malta one of the sunniest places in Europe.

This combination of historical heritage and pleasant climate makes Malta an ideal place for tourism, living, and, of course, investment.

In 2022, the average price per square meter of residential real estate in Malta was about 2,500 euros, which is a 7% increase compared to 2020. Demand for housing is growing, while supply is limited due to the small size of the island. Such demand stimulates price growth, especially in popular tourist areas.

In the main city of Valletta, the average cost per square meter reaches 3,800 euros. Valletta is a historical city with beautiful architecture, numerous museums, and monuments. However, investors are increasingly turning their attention to other areas, such as Sliema and St. Julian's. In these neighborhoods, the average housing costs range from 2,800 to 3,400 euros per square meter.

Malta is also attractive due to its citizenship programs through investment. With a property purchase of 350,000 euros or more, investors can obtain permanent residency on the island. Since 2018, Malta's real estate market has demonstrated stable growth. According to statistics, the average housing cost has increased by 17% over the past five years. The favorable investment climate is supported by a low unemployment rate, which stood at just 3.8% in 2022, and a stable economic situation.

The tax system in Malta also deserves special attention. When purchasing property, investors are required to pay a duty of 5% of the property value and 1% as notarial fees. However, Malta provides unique tax benefits for foreign investors, such as the absence of tax on the sale of your primary residence after three years of ownership and the possibility of a 6/7 refund of the paid tax when selling the property after five years of ownership.

The view of Malta as a strategically advantageous investment destination is supported by the active "Buy and Rent Property" program aimed at attracting foreign investors. This program offers various opportunities for those who want to invest in real estate, ranging from luxury apartments to unique historical buildings.

In terms of infrastructure development, Malta offers a wide range of opportunities for different types of activities, whether it be tourism, business, or education. From 2023 to 2027, it is planned to invest over 700 billion euros in infrastructure projects, including the improvement of transportation networks, the expansion of ports, and the development of renewable energy sources.

Furthermore, Malta offers unique tax benefits for foreign investors, such as no tax on the sale of the primary residence after three years of ownership and the possibility of a 6/7 refund of paid tax when selling the property after five years of ownership. Infrastructure development in Malta is also a priority, with significant investments planned for the next few years. These projects include improving transportation networks, expanding ports, and developing renewable energy sources. Overall, Malta presents itself as an appealing investment destination with its cultural heritage, favorable investment climate, and government initiatives to attract foreign investors.

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