Malta Property Overview
Residential construction ranges and the value of property in Malta boomed between 2003 and 2004, recording value increases of 20.three% and 13.three% respectively, after a 2003 referendum voted in favour of Malta becoming a member of the European Union on 1 January 2004.
Located in southern Europe just off the coast of Sicily, properties in Malta, which includes an archipelago of seven islands, with a inhabitants of four hundred,000 inhabitants, have long appealed to abroad nationals. This is not just because of the Malta's intense Mediterranean climate, but also owed to the nation's tax-environment friendly standing; Maltese residents get pleasure from one of many lowest levels of earnings tax in Europe.
Demand for property in Malta
But worldwide demand for homes in Malta, which primarily comes from the UK and Scandinavia, has waned over the previous year or so. That is significantly the case with "British buyers" largely because of "the autumn within the UK pound's value" against the euro and Maltese lira, says Paul Hay of Malta Homes. The decline in sterling's price has considerably elevated the cost of shopping for property in Malta.
Though property prices have fallen, the downturn has been nowhere close to as drastic as most other European markets," adds Hay. Nevertheless, domestic demand for properties in Malta has been "surprisingly resilient", says James Vassallo, senior manager, Tigne Point property development.
Vassallo continues: "Reduced interest rates have inspired fence sitters to have interaction [in housing transactions] and have made these occasional bargains that much more attractive."
Malta property prices begin to stabilise
Though housing values are still falling in some areas, they have already stabilised in different areas, primarily because most Malta property house owners will not be so highly leveraged via borrowed cash, as say these residing in the UK.
Despite the quick-term market slowdown, the Malta property sector may discover itself flying high within the medium to long-term, buoyed by growing tourism ranges and an ever-rising number of low-price range airlines.
Malta homes flying high
In 2008, EasyJet, Ryanair and Scandinavian Airlines, all either introduced or increased its direct routes from the UK and Sweden to Malta.
Vassallo adds: "The increased air site visitors is definitely good for the island particularly in these making an attempt times. Malta is strategically placed between the west and east and the growing significance of North Africa. It appeals to businesses seeking to relocate to the Med and through the years enterprise travel has continually grown."
Rental investment properties in Malta
While there might have been a fall in foreign demand for Malta homes to purchase, Hay says that greater tourism ranges are rising the requirements for vacation houses in Malta to rent in valletta.
"From a holiday letting point of view, 2009 appears to be trying healthy, when making an allowance for the worldwide economic state of affairs, says Hay. "In reality Air Malta recorded one in every of its most profitable flight occupancies for the first quarter of 2009 for some years."
Vassallo says that among the best rental returns, albeit it at relatively low yields - approximately four% - an be achieved by buying property in Sliema, property in St Julians, property in Valletta and property in St Paul's Bay.
Nonetheless, it's value nothing that any foreigner wishing to lease their Malta house out, must register their property with the Hotel and Catering Establishments Board, and it could possibly solely be rented out on a brief-term lease agreement.
Additionalmore, non-nationals can solely buy a single Malta property, and usually just for proprietor-occupancy purposes, unless they purchase property in a 'Particular Designated Space (SDA)' permitting them to purchase property in Tigne Point, property in Portomaso, property in Manoel Island, property in Chambray, and property in Cottoenra.
Malta Properties located in a SDA don't face some of the stringent restraints positioned on foreigners in any other case wishing to let their Malta homes.
Residency in Malta
One option to overcome the confines positioned on abroad nationals is to become a Maltese resident, which might additionally offer average earners a genuine alternative to chop their tax bill.
Malta charges no capital good points tax on property gross sales after three years of ownership, but any native or overseas earnings introduced into Malta is taxable at a rate of up to 35 per cent. Nonetheless, residents can take advantage of The Maltese Residence Scheme, which fees a flat tax rate of 15 per cent, subject to a minimum tax legal responsibility of EUR4,200 (£3,630).
In order to qualify for residency in Malta, Mark Hollingsworth of Hollingsworth International, explains that a person must personal belongings worth within the region of at the least EUR350,000 (£303,000) or earn an annual revenue of approximately EUR23,500 (£20,four hundred) outside of Malta.
Foreigners shifting to Malta need to "remit a minimum of EUR13,950 (£12,00) plus EUR2,300 (£2,000) for each dependent to the [country's authorities], not engage in any form of business activities in Malta and either purchase or rent property in Malta. A minimum of EUR116,000 (£one hundred,000) must be spent on shopping for a house or EUR69,000 (£60,000) paid for an house, otherwise an annual hire of not less than EUR4,a hundred and fifty (£3,600) would have to be spent on leasing a home."