Smart retirement opportunities with a move to Malta


It’s not all sun, sea and scenery that draw folk to the bite-size Mediterranean island of Malta - there are financial incentives too – particularly for the retired. Antonia Kipling reports

Responsible fiscal policies continue to 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.

Residential growth of late has also been reflective of a prudent philosophy filtering across all areas of economic activity: a flight to quality, with high value-added real estate development leading the way attracting an aspirational, international clientele.

“The island has financial incentives for both individuals considering taking up residency in a country that is favourable to their taxation and financial circumstances, as well as companies looking at a more business friendly and tax efficient alternative,” explains Vanessa Lupi of agents Frank Salt.

“Healthcare, education, and accessibility also play key roles and Malta passes all these tests with flying colours, while Maltese banks have continued to offer home loans to foreigners, all of which is helping to sustain investor confidence.”

Unlike certain Eurozone countries, Malta has also significantly advanced its economic freedom over the past five years. 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. 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.

One initiative driving take up from the UK is the Malta Retirement Programme (MRP). Introduced in 2012, the initiative benefits EU, EEA or Swiss retirees with handsome tax breaks. These include a flat rate of 15% on foreignsourced income that is remitted to Malta, subject to a minimum tax payment, and with the possibility to claim double tax relief.

There are no property or wealth taxes. There is Capital Gains Tax but it does not apply if it is from the sale of your main residence, as long as you have owned and occupied it for the previous three years.

To qualify for the scheme, applicants must purchase a property of €275,000 if situated in Malta or €250,000 for a property situated on the sister island of Gozo. For rentals there is a minimum annual value of €9,600 for Malta and €8,750 for Gozo and a minimum term of 1 year.

Adds local agent John Cutugno: “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 easily transferrable, which makes relocation an attractive proposition.”

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

“Special Designated Areas (SDAs) 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),” explains Cutugno. “Once acquired - the owner can also lease the property without restrictions (any rental income is taxed at 15%).”

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 £275,000 for a two-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 £350,000 - £475,000 will secure you a house of character with period accents such as flagstones, arched ceilings and exposed beams.

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