The Republic of Malta is an archipelago situated in the middle of the Mediterranean 50 miles south of Italy.
By Peter Gilmour, chief foreign correspondent
The Republic of Malta has two large islands, Malta and Gozo, and covers 122-square-miles with a population of nearly 450,000 making it one of the world’s smallest and most densely populated countries.
In a survey entitled “The Best and Worst Places to Live for Expats” by Expat Insider in 2016, Malta ranked second-best in the world after Taiwan. Malta became a republic in 1974 and was admitted into the European Union in 2004, becoming a part of the Eurozone in 2008. The country has an excellent Mediterranean climate, a long, rich history, fantastic education and healthcare systems, a thriving economy and is very close to major European cities.
Needless to say, Malta’s attributes and business-friendly tax structure has attracted international property buyers for many years. Over the last decade, demand for residential property has outpaced the limited supply with prices surging over 10 percent per annum for the last two years. This mature residential market offers a spectrum of traditional and newer residences comprising apartments, terrace homes, maisonettes, townhouses and villas.
Second Home Buyers
For some time, Malta has been a favorite place for British second home buyers but also attracts buyers from Scandinavia, Germany, France, Asia, Africa and the Middle East. It is estimated that nearly 40 percent of all sales are to international buyers. The real estate market has benefitted from the government’s Individual Investor Program initiated in 2014 which offers a path to Malta citizenship to investors willing to make a minimum investment totaling approximately USD $1.3 million. That also means full European Union citizenship since Malta is a member. In the first year of the program, the country processed over 100 applications according to Henley and Partners, the British-based group that helped implement the program.
Straightforward Property Buying
Buying property is fairly straight forward as Malta follows aspects of the British legal system with documents prepared in English, and escrow accounts are common to safeguard deposits. Foreign buyers are restricted to one property per owner except in specially designated areas such as Tique Port, Portomaso and Manoel Island where multiple properties may be bought.
One of the EU’s strong economies, Malta’s economy grew in 2014-2015 by nearly 8 percent per year, and this dropped slightly to 6 percent in 2016. Residential property prices grew on average 13.8 percent in 2016, according to stats from the Central Bank of Malta. The Central Bank has introduced a subsidy of USD $5,200 on stamp duty for first-time buyers and recently reduced the stamp duty on purchases on Gozo from 5 percent to 2 percent. Interest rates on new mortgages in January 2017 were 2.77 percent.
Most Maltese opt to own rather than rent resulting in an owner-occupancy rate of about 80 percent. However, the strong influx of expat workers has resulted in returns for buy-to-let investors of nearly 5 percent based on Global Property Guide research in 2016. Well-supported by government initiatives, the economy and residential property market in Malta looks to have great potential.