Understanding the Property Market

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Ask the Maltese public about the best investment in Malta, and the overwhelming consensus will point to real estate.

The perception of property as a safe and lucrative investment is deeply rooted, and anyone who has invested in property in Malta over the past decades has enjoyed a superlative return on investment.

As a small island, Malta’s land is inherently scarce, and a rapidly growing population with increasing housing demand has created fertile ground for investment opportunities. Both large-scale and small-scale investors have capitalised on the classic dynamic of limited supply and rising demand, which continues to drive property prices upward.

Over the past half-century, Malta’s real estate market has consistently strengthened, with property prices roughly doubling every decade. Each ten-year cycle tends to feature a period of rapid growth, followed by relative stability.

Currently, the market is experiencing a phase of consolidation, with property prices generally rising at a steady, moderate pace (6.8 per cent between 2023 and 2024), following a period of rapid growth between 2015 and 2020.

House Price Index

Source: Central Bank of Malta. National Statistics Office, Grant Thornton, Dhalia

increase in property prices between 2014 and 2022

Significant downturns have been rare, if they have occurred at all. The only notable dip took place during the global financial crisis in 2009, when Maltese property prices dropped by approximately 5 per cent – a modest decline compared to the steep falls witnessed elsewhere.

As a result, Malta’s real estate sector has earned its reputation as a stable and sound investment.

Residential Property Sales Volume

Source: National Statistics Office

While Malta’s property market may seem foolproof, successful investment depends on a deeper understanding of its unique characteristics. One such aspect is the high level of homeownership, with around 75 per cent of Malta’s residents owning their own homes – a figure that rises to 85 per cent among the Maltese themselves. Additionally, about half of the remaining population lives in rent-controlled properties. Property ownership is highly fragmented, driven predominantly by small-scale investors, with corporate involvement accounting for less than 10 per cent of residential transactions.

Tax on property transactions

For property purchases, a 5 per cent stamp duty is applied, while sales are subject to an 8 per cent capital gains or final withholding tax. There are several exemptions and discounts, under certain conditions.
For sellers, properties that have served as a primary residence for at least three years are exempt from the 8 per cent tax, while properties sold after less than three or five years may qualify for a reduced rate of 2 or 5 per cent, respectively.

It is important to note that taxes on property transactions are calculated on the full sale price, excluding the value of movables. Selling a property worth €300,000 under the regular 8 per cent tax rate incurs a €24,000 tax bill, regardless of the price it was bought for. It is essential that your real estate investment strategy takes this into account.

As of 2025, investors can benefit from incentives targeting the buying and selling of traditional properties, waiving the taxes due on the first €750,000 of the price of acquisition. However, the incentives tied to traditional properties do not apply to transfers of property to persons who require an AIP permit.