Malta Sitting Pretty in European Economy


Performing well despite an anti-austerity backlash in Southern Europe – the bite-size Mediterranean island of Malta is leading by investment example. Laura Henderson reports

Deficit targets might still be the pressure cooker topic of discussion in certain Euro territories at present. Not so, on the small but steely island of Malta; a country whose cushioning from debt crisis in the region has been bolstered by a strong, service-based economy, diversified among banking, insurance, tourism and gaming, with wider reach levels of interest also now being shown by foreign buyers for residential property.

“Unlike certain Eurozone countries, Malta has significantly advanced its economic freedom over the past five years,” explains Nick Bilocca of agents Frank Salt. “The country has created a relatively open economy with low tariffs and efficient investment rules. Its domestic banks are highly capitalised, profitable and liquid. They fund themselves largely from the domestic retail deposit market, lend locally and hold securities issued in Malta, rather than having taken on board risky assets such as Greek government bonds. High levels of language and technical literacy with excellent communications and IT infrastructure have also helped attract inward investment as has Government expenditure in productive sectors.”


For overseas buyers considering a second-home – the financial incentives are attractive too. Foreign residents have no tax levied on their worldwide income or wealth and are subject to a flat income tax rate of 15% on remitted income. Stamp duty is also low, with no council tax to pay and pension funds are transferrable, which makes relocation an attractive proposition.

One initiative driving take up is the Malta Individual Investor Programme (IIP). The programme allows for the grant of citizenship to duly qualified, reputable foreign individuals and families (EU and non-EU nationals) who make a significant contribution to the economic development of Malta.

To qualify for the scheme, individuals and their families are required to make a financial contribution of €650,000 for the main applicant and an additional €25,000 per direct dependents, including the spouse and minor children. In the case of dependent children that are 18 to 26 years of age, or dependent parents over 55 years, a €50,000 contribution is applicable.

An applicant must also commit to retain a residence in Malta for a period of at least 5 years, either through the purchase of a property for which the minimum value must exceed €350,000, or by renting out a property for which the minimum annual rent must exceed €16,000

An investment of €150,000 in Government approved financial instrument is required, which must be maintained for a minimum period of 5 years


On buying property, citizenship is granted after 12 months from date of property purchase or rental. Residence under Maltese law is defined as an intention to reside in Malta for any fiscal year, usually evidenced by a stay of a minimum of 183 days or by the purchase or rental of property together with a visit to Malta.

As to property options – those considering a new-build home will find a comprehensive choice under the Special Designated Areas (SDA’s) portfolio; government approved regeneration zones of which waterfront and marina developments are a key component.

Special Designated Areas (SDA’s) is a status granted to qualifying developments that allows both EU and non-EU nationals to purchase property in Malta with the same acquisition rights as Maltese citizens, and without the need to obtain an AIP permit (Acquisition of Immovable Property). Therefore there are no limits on the number of properties a buyer can purchase and once acquired the owner can also lease the property without restrictions.


Portomaso in scenic St Julians was the first SDA resort launched in 2003, but many more have come on stream with their own individual personality and style ranging from Vittoriosa Waterfront just south of the World Heritage City of Valletta to the exclusive gated hillside community of Madliena just a short walk from the Medieval village of Ghargur. Prices start in the region of £115,000 for a one-bed apartment, to £1m+ for a luxury penthouse, with the added bonus of a turnkey set-up with luxury of on-site amenities and full property management services on hand.

Those seeking an older, traditional property may find what they are looking for in scenic areas such as Gharghur, Balzan, Naxxar and Zebbug. Characterised by their charming tree-lined squares and alfresco cafes, these vintage villages sport a healthy mix of restored townhouses and maisonettes, not to mention a sprinkling of palazzos complete with inner courtyards and roof top terraces. A budget of £250,000 - £425,000 will secure you a house of character with period accents such as flagstones, arched ceilings and exposed beams.


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