Malta Real Estate – A Review of the Property Market in Malta

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Malta is one of the few safe, affordable and exotic beach destinations that are open for foreign property buyers as well as the locals. This has a significant impact on the Malta property market. It’s also a market that has seen a lot of growth lately, and is attracting a lot of outside capital due to a variety of factors. Let’s take a look at some of the trends affecting the Malta property market and some of the hard data that we have from recent reports. Here’s an overview of the property market in Malta.

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The Hard Data
Prices for Malta real estate are rising, though not all boats are rising as fast. For example, apartment prices increased roughly 11 percent in 2019. Factor in inflation, and they increased almost 10 percent – terraced houses appreciated by roughly 15 percent; the price of maisonettes grew by roughly eight percent; and other types of houses like villas and townhouses appreciated at nearly 16 percent last year, and nearly 15 percent taking inflation into account.

The Generally Growing Market
The Malta real estate is not just appreciating because foreign tourists are buying villas, though that does bolster property prices on the island. The island is seeing real estate prices soar because of the rising number of foreign workers, something that drives up demand for housing. Their high incomes also give them the ability to buy properties. At the same time, many are attracted to the area by the relatively affordable real estate market. A small flat costs around 120,000 Euros. A house costs around 200,000 Euros.

The Favourable Environment for Foreign Property Buyers
Malta has a favourable legal climate for foreigners who want to buy property. For example, they have a straightforward buying system. This is a secure legal process that protects the legal rights of expats and foreign real estate investors. However, there is a slightly different process if you’re buying a new primary residence or second home.

If you want to live on Malta permanently, you’ll need a permit to acquire “immovable” property before you can buy. However, this isn’t necessary if you’re an EU citizen and have lived on the island for at least five years. If you want to buy a second home, that Acquisition of Immovable Property permit is required as well. That permit takes around two months to get, and then you can start shopping for eligible properties.

Laws like these allowed the Malta housing market to recover by 2013 and continue to rise every year since then. Note that the local property laws say you can only buy one property in Malta, unless you’re dealing with specially designated areas like Chambray or Tigne Point.

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The Favourable Legal Climate for Home Buying by Everyone Else
The Maltese government has been altering regulations to encourage property ownership. For example, it created an exemption for first time home buyers from the 3.5 percent stamp duty (tax) on the first 150,000 Euros of a new home’s value. Then they made second time buyers eligible for a stamp duty refund of several thousand Euros if they were replacing a current residence. They didn’t get a tax refund if they owned another home or upgraded to a luxury property. If you have a disability, you can get a stamp duty refund of up to 5000 Euros.

The Rental Market
A lot of people consider buying a home in Malta after renting it out for a summer or while working there. Some choose to buy investment properties they hope to rent out. Malta does allow this in limited circumstances. Foreigners cannot rent out a property they own unless it is worth more than 233,000 Euros, has a swimming pool, and is registered with the necessary board. You’re also limited to renting them out on a short-term lease. Yet you could rent out the property on a seasonal basis while enjoying the use of the property the rest of the year. Since rental rates are going up at 4.4 percent, becoming a part time landlord is a viable way for many to offset the costs of owning Malta real estate or even profit from it. The highest ROI is for apartments in Lija, Balzan and Attard.

Malta offers a unique combination of a solid local real estate market and strong tourist market, both for properties and rentals. This makes the Malta real estate market more stable and profitable than many similar parts of the world.

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Malta Real Estate - A Review of the Property Market in Malta
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Malta is one of the few safe, affordable and exotic beach destinations that are open for foreign property buyers as well as the locals
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