Malta has an active buy-to-let market, as well as a strong holiday rental market. Demand for accommodation from international business professionals fuelled a 15 per cent rise in rental values in 2014.
According to Frank Salt, one of Malta's largest estate agencies, UK buyers generated 35 per cent of sales to foreigners in 2014, followed by Italians (15 per cent), with the remainder predominantly German, French, Swedish, South African and Russian.
Malta's rising status as a tax-friendly commercial hub has continued to complement its tourism and lifestyle offerings in 2014, adding an exciting edge to its buoyant real estate market.
Increasing numbers of foreign professionals moving to Malta with work means the island's buy-to-let market thrived in 2014, and at the same time the government is ensuring it remains a financially attractive place to retire to. Qualifying EU retirees who remit their entire pension to Malta are now taxed at just 15 per cent, with a minimum tax liability of €7,500, and with €500 being added for a dependent. One of the conditions includes the purchase of a home worth at least €275,000, or €250,000 in Gozo - a threshold also applies for those who prefer to rent.
"We've registered an increase in interest by buyers in acquiring property as a permanent residence," said Joseph Lupi, managing director of estate agency Frank Salt. "The letting market is also doing extremely well with rental income increasing. 2014 promises to be one of the best years ever recorded. Overall sales have increased by 47 per cent when compared to 2013, and sales to foreign buyers have gone up by 58 per cent."
The majority of foreign purchases in Malta are apartments, typically on small complexes close to the seafront - popular areas include Sliema, St Julians and around Valletta. _ e remaining sales are split between houses of character, farmhouses and villas, with the low-to-mid end of the market (up to €300,000) being the most active.
"A good many houses have sold in this price range, which has caused a shortage of properties," commented David Pace, director at Move2Gozo.com. "We expect to see more competitive interest in well-renovated character houses with pools, as well as a strong demand for luxury apartments and penthouses with swimming pools, which make good investment purchases."
While the Malta's more developed south traditionally sees most of the property action, another local agency Dhalia (dhalia.com) recently highlighted the north of Malta as a key growth market, adding that St Pauls Bay has been attracting the largest volume of transactions.
Meanwhile, areas popular for authentic houses of character that are still just a short drive from the vibrant seafront around Valletta include Balzan and Naxxar. Not forgetting the smaller island of Gozo, more lifestyle than buy-to-let and favoured for its sleepy villages and even slower pace of life than Malta. It's difficult not to have a stunning sea view there, with those from the properties at the redevelopment of the historic Fort Chambray site about as good as it gets anywhere in the Med.
Need to know:
Ownership rules mean foreign citizens, including EU citizens, may only purchase a single property in Malta, unless they have been resident on the island for five years or they buy somewhere within a Special Designated Area (SDA). When buying within a SDA, foreigners have the same acquisition rights as Maltese citizens, so can buy as many properties as they like and without a permit (needed for second homes outside an SDA).
(This article was first published in A Place in the Sun Magazine - Winter 2014 issue 120.)