Malta Property Overview

Malta Property Overview

Malta property boom
Residential building levels and the price of property in Malta boomed between 2003 and 2004, recording price will increase of 20.three% and 13.three% respectively, after a 2003 referendum voted in favour of Malta joining the European Union on 1 January 2004.

Positioned in southern Europe just off the coast of Sicily, properties in Malta, which contains an archipelago of seven islands, with a inhabitants of four hundred,000 inhabitants, have long appealed to abroad nationals. This is not just because of the Malta's intense Mediterranean local weather, but additionally owed to the nation's tax-environment friendly status; Maltese residents enjoy one of the lowest ranges of earnings tax in Europe.

Demand for property in Malta
But worldwide demand for homes in Malta, which primarily comes from the UK and Scandinavia, has waned over the previous year or so. That is significantly the case with "British consumers" largely due to "the autumn within the UK pound's worth" towards the euro and Maltese lira, says Paul Hay of Malta Homes. The decline in sterling's worth has significantly elevated the price of shopping for property in Malta.

Although property prices have fallen, the downturn has been nowhere near as drastic as most different European markets," adds Hay. Nevertheless, domestic demand for homes in Malta has been "surprisingly resilient", says James Vassallo, senior manager, Tigne Point property development.

Vassallo continues: "Reduced interest rates have inspired fence sitters to engage [in housing transactions] and have made these occasional bargains that much more attractive."

Malta property costs start to stabilise
Although housing values are nonetheless falling in some areas, they have already stabilised in other regions, primarily because most Malta property homeowners are usually not so highly leveraged through borrowed cash, as say those residing in the UK.

Despite the short-time period market slowdown, the Malta property sector could find itself flying high within the medium to long-time period, buoyed by rising tourism levels and an ever-increasing number of low-budget airlines.

Malta houses flying high
In 2008, EasyJet, Ryanair and Scandinavian Airlines, all both introduced or elevated its direct routes from the UK and Sweden to Malta.

Vassallo adds: "The elevated air site visitors is certainly good for the island especially in these trying times. Malta is strategically positioned between the west and east and the rising importance of North Africa. It appeals to companies seeking to relocate to the Med and through the years business journey has continually grown."

Rental funding properties in Malta
Whereas there might have been a fall in foreign demand for Malta properties to purchase, Hay says that larger tourism ranges are rising the necessities for vacation houses in Malta to rent malta villa.

"From a holiday letting standpoint, 2009 seems to be trying wholesome, when bearing in mind the worldwide economic situation, says Hay. "The truth is Air Malta recorded one in all its most profitable flight occupancies for the first quarter of 2009 for some years."

Vassallo says that a number of the best rental returns, albeit it at comparatively low yields - approximately 4% - an be achieved by shopping for property in Sliema, property in St Julians, property in Valletta and property in St Paul's Bay.

However, it is price nothing that any foreigner wishing to lease their Malta residence out, must register their property with the Hotel and Catering Establishments Board, and it will probably solely be rented out on a brief-time period lease agreement.

Furthermore, non-nationals can only purchase a single Malta property, and often just for proprietor-occupancy purposes, unless they purchase property in a 'Special Designated Space (SDA)' allowing them to purchase property in Tigne Point, property in Portomaso, property in Manoel Island, property in Chambray, and property in Cottoenra.

Malta Properties positioned in a SDA do not face a few of the stringent restraints positioned on foreigners in any other case wishing to let their Malta homes.

Residency in Malta
One solution to overcome the confines placed on overseas nationals is to become a Maltese resident, which would also supply common earners a genuine alternative to chop their tax bill.

Malta charges no capital positive aspects tax on property sales after three years of possession, however any local or overseas earnings brought into Malta is taxable at a rate of as much as 35 per cent. Nevertheless, residents can take advantage of The Maltese Residence Scheme, which fees a flat tax rate of 15 per cent, topic to a minimum tax liability of EUR4,200 (£three,630).

With the intention to qualify for residency in Malta, Mark Hollingsworth of Hollingsworth Worldwide, explains that an individual would have to own belongings price in the area of not less than EUR350,000 (£303,000) or earn an annual revenue of approximately EUR23,500 (£20,four hundred) outside of Malta.

Foreigners shifting to Malta have to "remit a minimum of EUR13,950 (£12,00) plus EUR2,300 (£2,000) for each dependent to the [country's authorities], not engage in any type of business activities in Malta and both purchase or rent property in Malta. A minimal of EUR116,000 (£a hundred,000) would have to be spent on buying a house or EUR69,000 (£60,000) paid for an house, otherwise an annual lease of at the least EUR4,a hundred and fifty (£3,600) would have to be spent on leasing a home."


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