Malta Real Estate Investment
Malta Real Estate Investment a Wise Choice
The world’s perception of Malta is changing; no longer is Malta just known for its weather, natural beauty, and rich history; Malta is quickly becoming known as an investment opportunity for foreign corporate companies and individuals in their capacity.
What are the benefits of Malta Real Estate Investment?
Malta and Gozo sit in the beautiful Mediterranean, surrounded by blue seas and enjoys over 300 days of sun a year. Malta is an attractive investment choice for several reasons, each appealing to companies and private persons alike.
Both Maltese and English are used as official languages in Malta and its sister island Gozo. Business is conducted in both languages, an attractive advantage for international companies wishing to do business within Europe and the European Union.
Another advantage is Malta’s generous tax structure for doing business on the island of Malta and Gozo. This favourable tax situation has attracted many foreign investments and highly skilled and qualified staff members in recent years to Malta.
The islands’ strategic location within the Mediterranean makes it ideal for successful transhipment and distribution. In addition, low start-up and operational costs for businesses and excellent technological infrastructure further increase this wonderful island’s appeal for overseas investment.
Malta in the European Union (EU)
Malta is a single-chamber parliamentary republic. The prime minister acts as the head of government, while the president (largely ceremonial) is the head of state.
The country is divided into five regions: the Northern Region, the Central Region, the South Eastern Region, the Southern Region, and the Gozo Region, which is Malta’s sister Island.
Each has its respective committee, the bridge between local and national government.
In 2003 the government of Malta held a referendum on European Union (EU) Membership, and with the majority vote being in favour of joining the EU, Malta officially became a part of the EU in 2004. Four years later, the Maltese Lira was retired, and the island adopted the euro in January of 2008, further increasing its investment potential. Since then, the country’s economy has grown exponentially and continues to do so year on year.
After slowing in the first half of 2020, Malta’s housing market is gaining momentum. The property price index rose by 5% during 2020 (4.8% inflation-adjusted), following rises of 2.5% in 2019, 11.9% in 2018, 8.8% in 2017, 13.8% in 2016, and 10% in 2015, according to the Central Bank of Malta (CBM).
Quarter-on-quarter, property prices increased 0.3% (5.5% inflation-adjusted) during the latest quarter.
“…historically the real estate market in Malta has been an important contributor to economic growth, and despite the significant economic disruption brought about by the current COVID-19 pandemic, the industry remains resilient on the back of strong consumer confidence, evidenced by the rate of real estate transactions experienced in the past months,” said David Valenzia of PwC Malta.
By property type: Malta Real Estate Investment
- Apartment prices rose by 6.5% on average during 2020. When adjusted for inflation, prices were up by 6.3%.
- Terraced house prices rose by 1.6% (1.5% inflation-adjusted).
- Maisonette prices fell by 7% y-o-y (-7.2% inflation-adjusted).
- Consisting of townhouses, houses of character and villas, experienced the highest price surge of around 12.4% y-o-y (12.2% inflation-adjusted) during 2020.
Demand is rising again. The number of residential transactions increased by 8.7% y-o-y in Q1 2021 to 3,2123 units, after falling by 21.2% in 2020, according to the National Statistics Office (NSO). Likewise, the value of transactions rose strongly, by 15.2% y-o-y. This can be partly attributed to the government’s temporary COVID-19 measures providing for a reduced tax and duty rate of 5% and 1.5%, respectively, on the first €400,000 (US$483,308) of property transferred.
According to the European Commission, Malta’s economy is projected to grow by 4.5% this year and by another 5.4% in 2022, after a sharp contraction of 9% last year.
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