If you are planning to sell, buy or invest in property, tax is part of the decision.
In Malta, property tax works differently from how it does in many other countries. There is no annual charge simply for owning a home. Instead, tax is linked to transactions. You pay it when you sell a property, when you buy one, when you receive rental income, or when property is transferred through inheritance or donation.
There are two main types of tax that can apply when you sell a property:
You will normally pay one or the other.
During the sale process, the notary reviews when and how you acquired the property, how it was used, whether it was your sole residence and whether any exemptions or reduced rates may apply. Based on this review, they confirm which tax method is due and calculate the amount payable before the final deed is signed.
It is important to understand which system applies before agreeing on a selling price, as this directly affects how much you keep after tax.
In most residential sales, the standard withholding tax rate is 8%. This tax is calculated on the selling price, not on the profit you make. So even if you bought the property many years ago at a lower price, the 8% is based on the full amount agreed with the buyer.
For example, if you sell a property for €400,000, the tax at 8% would be €32,000.
The tax is usually deducted and paid through the notary at the time of the final deed. Once it is paid, it is considered final, meaning no further income tax is due on that sale under this system.
The 8% rate commonly applies to:
Although 8% is the usual rate when selling property in Malta, a lower rate may apply if:
The exact rate depends on when you bought the property, how you used it and whether all conditions are satisfied. Further guidance is available from Malta Tax, Customs & Administration. Your notary will review these details during the sale process and confirm which rate applies before the final deed is signed.
In some situations, tax is charged on the profit you make rather than on the full selling price. This is known as the capital gains tax on the sale of property in Malta. It is calculated on the difference between what you paid for the property and what you sell it for.
For example:
Capital gains tax may apply in cases like:
Whether this results in more or less tax depends on your figures. Your notary will confirm which system applies before the final deed is signed.
In some cases, no tax is due when you sell a property. The most common example is the sale of your sole ordinary residence. If you owned and lived in the property as your main home for at least three continuous years, no tax is payable when you sell it.
You may also qualify for an exemption if:
These exemptions depend on meeting strict conditions. Your notary will review how long you owned and occupied the property and confirm whether the exemption applies before the transfer is completed.
When you buy immovable property in Malta, stamp duty is the main tax you pay. This applies whether you are buying residential or commercial property, for your own use or as an investment. There is no separate purchase tax beyond stamp duty.
When you buy property in Malta, the main tax to consider is stamp duty, officially known as duty on documents and transfers.
For most buyers, stamp duty is charged at 5% of the property value. It is calculated on the higher of the agreed purchase price or the market value assessed by the authorities. For example, if you buy a residential property for €300,000, stamp duty at 5% would be €15,000 in total.
Payment is normally split in two stages:
The notary collects and pays this tax to the authorities as part of the purchase process.
In certain situations, buyers may benefit from reduced rates or exemptions.
If the property will be your main home in Malta, a reduced rate may apply:
For example, if you buy a home for €300,000 as your main residence:
To qualify, the property must be your only main residence in Malta at the time of purchase. Owning a second property abroad or in Malta does not automatically disqualify you, provided that the new property is genuinely your main home and that you meet the legal requirements at the time of purchase.
If you are buying your first home in Malta, you may qualify for a stamp duty exemption. First-time buyers do not pay stamp duty on the first €200,000 of the property value. Any amount above that threshold is taxed at the standard 5% rate.
To qualify, you must not have previously owned residential property in Malta, and the property must become your main residence. Eligibility is confirmed before the Promise of Sale is signed.
For example, if you buy your first property for €250,000:
If you are buying as a couple and only one of you qualifies as a first-time buyer, the exemption is usually applied to that person’s share of the purchase. The other buyer’s share is taxed at the normal rate. Your notary will confirm how this applies based on the ownership structure.
If you are replacing your home, you may be eligible to claim a refund on part of the stamp duty paid on the new property, up to a capped amount.
As these schemes are time-limited and subject to conditions, your notary will confirm eligibility and the correct rate before the transaction is completed.
Partial stamp duty exemptions may apply to properties located in a UCA or to properties that have been vacant for a qualifying period. These schemes are intended to support restoration and reuse of older buildings and are subject to value caps.
Now that you understand the tax on buying property in Malta, take the next step and explore what’s available across the islands.
If you rent out property in Malta, you can choose one of two ways to be taxed on the rental income:
The right option depends on your rental income level and your expenses.
Under this system, you pay 15% tax on the full rental income received, without deducting expenses.
For example, if you receive €12,000 per year in rent, the tax would be €1,800.
This option is simple and predictable. It is often used for long-term residential leases that are properly registered.
Alternatively, rental income can be added to your total annual income and taxed at the standard progressive income tax rates, which can go up to 35%.
Under this method, you can deduct certain expenses before tax is calculated. These may include:
This option may be more suitable if your rental property has higher running costs.
The tax method you choose affects your overall yield. If your expenses are low, the 15% flat rate may result in lower tax. If your expenses are high, the progressive system may reduce your taxable profit.
Before deciding, it is important to review your numbers carefully. A tax adviser can help you assess which option works best for your situation.
Property can also change hands through inheritance or donation. The tax treatment in these cases is different from a standard sale.
Your notary will review the history of how the property was inherited and confirm which tax system applies before the sale is completed.
Malta does not charge inheritance tax on the value of assets you receive. There is no estate tax simply because property passes from one person to another on death. However, other transfer duties may still apply.
When inherited property is formally transferred to the heir, a 5% duty may be payable on the value of the property at the time of transfer. There are exemptions in certain cases, particularly where the transfer is between spouses or direct descendants, subject to conditions.
The duty is settled as part of the notarial process when the inheritance is registered.
If you later sell an inherited property, tax will apply at the point of sale. Depending on the circumstances, this may fall under the final withholding tax system or capital gains tax on sale of property in Malta. The date of inheritance and the value declared at that time are important in determining how tax is calculated.
In Malta, capital gains tax is calculated on the profit from the sale of a property rather than the full selling price. If the gain is small, the tax may be lower than the 8% withholding system.
The 1% paid at Promise of Sale may be refundable in certain situations, depending on why the contract did not proceed. Your notary can confirm whether a refund applies in your case.
The same stamp duty and tax when selling property in Malta applies to Maltese and foreign buyers. Some non-EU buyers may require an Acquisition of Immovable Property permit, but this is not an additional tax.
Owning property alone does not make you tax resident in Malta. Tax residency depends on broader personal and financial factors.
There is currently no automatic reduced stamp duty rate for buying property in Gozo. The temporary 2% scheme ended in 2024.
Stamp duty in Gozo is now generally charged at the standard rates, unless you qualify for other reliefs such as the main residence rate or the first-time buyer exemption.
As government schemes can change, your notary will confirm the rate that applies at the time of purchase.
There is no automatic reduced rate simply because you are buying alone. Stamp duty depends on whether the property will be your main residence and whether you qualify as a first-time buyer, not on whether you are single or purchasing without a partner.
There is no general stamp duty reduction in Malta based purely on age or pension status. However, pensioners may still qualify for main residence relief or first-time buyer exemptions if they meet the eligibility criteria.
Malta doesn’t charge an annual property tax on residential or commercial property. Property owners don’t pay a yearly tax simply for owning real estate.
Tax is triggered when a transaction takes place, like selling the property, buying it, earning rental income, or transferring it through inheritance or donation.
Buying or selling a home is a big financial decision, and understanding the costs involved can feel overwhelming. With over 30 years of experience in real estate across Malta and Gozo, we know the market inside out and will make the process of buying or selling clear, structured and straightforward.
We understand pricing trends, buyer demand, location dynamics and what makes a property stand out. That insight helps sellers position their property correctly and helps buyers choose areas that truly suit their lifestyle and long-term plans.
We guide you from first viewing to final agreement, coordinating with your notary and other professionals so everything moves efficiently. While the legal and tax aspects are managed by qualified experts, we remain closely involved throughout, ensuring smooth communication and realistic expectations.
Explore our latest listings across Malta and Gozo or speak to one of our experienced agents today. Your next property move starts here.
The information on this page is intended as general guidance on property tax in Malta. It does not constitute tax or legal advice. Tax rules, exemptions and rates are subject to change. The figures and explanations provided reflect the position as of February 2026. Before making any decision to buy, sell or transfer property, you should confirm your specific situation with a qualified notary and, where necessary, the Commissioner for Revenue.
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