5% Stamp Duty
A duty on transfers of property situated in Malta (stamp duty) is payable on a transfer of property. The duty is normally paid by the purchaser, and amounts to 5% of the transfer value of the property. 1% is paid on the promise of sale agreement, whilst the remaining 4% is paid on the final deed of the transfer.
Standard Progressive Tax Rate (click here)
Rental income from immovable property situated in Malta is taxable in Malta, even if the owner of the property is not resident in Malta.
The rental income would normally be taxed at the normal tax rates applicable in Malta (progressive rates up to a maximum of 35% depending on the amount of the income). Deductions for interest paid on loan financing of the purchase of the property, and some other small deductions are usually allowed against the rental income.
A special tax scheme for rental income is available whereby the rental income, without any deductions, is brought to tax at 15%. Using the special tax scheme is at the option of the owner. Short lets to tourists may be classified as a trade and result in VAT registration obligations for the owner and Malta Tourism Authority licence obligations for the property in question.
5% – 8% Sales Tax
Malta imposes a tax on the sale of properties situated in Malta. The normal sales tax rate is 8% of the transfer value of the property. This is a flat tax charged on the market value of the property (less brokerage charges) and it is charged regardless of whether the seller is making a profit on the sale or not.
The sales tax rate may be reduced in certain circumstances. These include where the property is transferred within 5 years from the date of its acquisition (the sales tax rate may be reduced to 5%).
An exemption from paying the sales tax is granted where:
0% Inheritance Tax
There are no inheritance taxes in Malta. However, the duty on transfers of immovable property situated in Malta is charged on any acquisition of property, including through inheritance and donations.
Exemptions are available in some circumstances, including where property is donated to or inherited by close family members and where property is donated to a philanthropic institution.
Conditions for Buying Immovable Property in Malta
For further information, do not hesitate to contact us.
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