Buying property in Malta: the permit, the 5% and the letting ban

Malta starts from a prohibition. Under Chapter 246 a non-resident may not acquire immovable property at all, and an acquisition made in breach of it is "null and void and without effect for all purposes of law". Everything a foreign buyer does here happens inside an exception.

The exception is the AIP permit, granted by the minister. A buyer from outside the EU needs one for every acquisition except by inheritance or inside a Special Designated Area. It costs €233 regardless of the property's value, and the tax authority commits to issuing it within 35 days of a complete application. Minimum values apply: €174,274 for a flat or maisonette and €300,619 for anything else, both index-linked and revised annually.

Three conditions attach, and the second is the one people discover late. The property may be used solely as the residence of the buyer and their family and for no other purpose — so it may not be let out at all, and the penalty runs to €23,000 or double the market value, whichever is greater, with a daily charge after a 180-day grace period. The purchase must complete within six months of the permit. And a non-resident may hold only one property.

All of that falls away inside a Special Designated Area, where no permit is needed and there is no limit on the number of properties. There are 27 of them, among them Portomaso and its extensions, Tigné Point and Manoel Island, Fort Cambridge, SmartCity, Fort Chambray and Kempinski Residences on Gozo, Madliena Village, Mistra Heights, Tas-Sellum, Verdala Terraces, Trident Park and Eden Place, added in January 2026. The list is extended by legal notice from time to time, so it is worth reading the current schedule rather than an article about it.

Duty on documents is 5% of the consideration or the value, whichever is higher. One fifth of it — 1% of the value — is paid on registering the promise of sale, and the remaining 4% falls due on the final deed. The notary must register the promise within 21 days of signature.

Now the part that decides a foreign buyer's arithmetic: none of Malta's reduced rates are available to them. The 3.5% rate on the first €200,000 for a sole ordinary residence carries an express proviso excluding anyone who would have required a ministerial permit had the property not been in a Special Designated Area. The test is counterfactual, so buying inside an SDA does not rescue it. The first-time-buyer exemption is keyed to that same provision and falls with it, and the €750,000 relief for vacant property, urban conservation areas and traditional features carries a parallel exclusion of its own.

The Gozo reduced rate and the old urban conservation rate have both expired, in January 2024 and January 2022.

So a buyer who needs a permit pays a flat 5%, and the only foreign buyers who reach a lower rate are EU nationals resident on Malta for five years or more.

Notarial fees are not published in a form we could retrieve — the statutory tariff schedule was not available. In practice the market quotes 1% to 2.5% plus searches and registration, and an architect's inspection. Agency commission of 5% plus VAT is paid by the seller by custom; no legal source fixes either the rate or the payer.

The promise of sale — the konvenju — is the binding step. It is registered with the tax authority within 21 days, with the 1% provisional duty paid at that point, and a copy of it accompanies the AIP application.

The Civil Code sets no default duration: the promise binds for the period the parties agree. Three to six months is the market norm rather than a rule, and no government source states a deposit percentage — the customary 10% is practice.

The notary carries out the title searches. Where a permit is needed, the application runs in parallel with the konvenju period, so the konvenju term, not the permit, is normally the binding constraint: 35 days of committed processing sits comfortably inside three months. The permit's own deadline is at the other end — the acquisition must be effected within six months of its issue.

At the final deed the permit is attached and the balance of the duty is paid. A certified copy of the deed has to reach the commissioner within three months of publication.

Malta levies no annual property tax. That is a conclusion from the revenue authority's own index of property taxes, every item on which is transaction-based, rather than a statement the government publishes — no country publishes what it does not charge.

What can be recurring is ground rent, and it depends on the title. Under freehold nothing is owed. Under emphyteusis the holder pays an annual ċens to the direct owner; perpetual ċens runs indefinitely, temporary ċens for a fixed term after which the property reverts unless the rent is redeemed. Redeeming it does not require an AIP permit — that is an express exception in the Act. Typical amounts and the redemption multiplier are not published.

Rental income has an optional final withholding tax of 15%. It is charged on the gross rent with no deductions, no set-off and no refund, it is available to non-residents, and it is elected year by year on a return due by 30 April.

Two limits on it are worth knowing. It does not reach short lets: the revenue authority treats long lets as investment income and short lets as trading income, taxed under the ordinary rules. And it is not available where the tenant is a related party.

The alternative is to declare net income and pay at the non-resident rates, where 35% begins at €7,801 — which is why the flat 15% almost always wins on a long let. Income never declared and later found is taxed at 35% with penalties and interest.

Read the previous sections first: if the property was bought on an AIP permit, it may not be let at all, and nothing in this section applies to it. Short letting is realistically open only to a foreign owner who bought inside a Special Designated Area or who did not need a permit.

For everyone else the framework was rewritten in 2026. The Tourism Accommodation Regulations 2026, published in June, consolidated five earlier instruments into one, with parts phased in over up to two years. Private accommodation now falls into two categories: short-let rented accommodation, and resident-host accommodation where the host lives in the property.

The applicant must be the proprietor in title — owner, authorised agent, lessee or another lawful holder — must be a fit and proper person with a clean police conduct certificate, and must name a person reachable around the clock. Nothing in the regulations conditions this on residence or nationality.

The operating rules are specific: at most two people per approved bedroom and ten per unit; no single booking longer than 90 consecutive days; no bedrooms below ground; an external sign with the licence number and a 24-hour contact; notice to the condominium administrator; a waste management plan. New properties need bedrooms of at least 9 square metres and air conditioning; existing ones have until 15 June 2028 to fit it.

The authority has 60 days to determine an application, suspended while documents are outstanding, and a new licensing system opened on 19 August 2026. The licence fee in euro is not published on any page we could reach — both official pages defer to a subsidiary instrument that would not open.

Operating without a licence disqualifies both the applicant and the property for three years: the property itself cannot be licensed during that period.

Since 1 July 2026 an eco-contribution of €1.50 per night applies to each guest aged 18 or over, capped at €22.50 per person per visit.

Malta's residence programme is not really a property play, and the numbers say so: €375,000 for a qualifying purchase against €60,000 of administrative fee and a €37,000 contribution. The property is a condition, not the investment.

The alternative to buying is renting: a qualifying lease of at least €14,000 a year. The contribution is now the same either way, which removed the old premium on renting.

The property — or the lease — must be held for five years from the appointed day, and the obligation does not end there: the beneficiary must continue to maintain a residential property on Malta afterwards.

The regional discount is gone. Lower thresholds for the south of Malta and for Gozo were deleted with effect from 1 January 2025, and the definition of "south of Malta" was removed from the regulations altogether. Guidance quoting €300,000 for Gozo describes a regime that no longer exists.

One interaction no official source addresses: an applicant buying at €375,000 outside a Special Designated Area is still a non-resident who needs an AIP permit, and the permit's conditions — own residence only, no letting, one property — bind independently of the residence programme. The two regimes are written as if the other did not exist.