Table of Contents Malta as a base for international real estate investments: Why the island can become your tax haven Cross-Border Real Estate Investment: The tax basics you need to know Tax treatment of international real estate portfolios in Malta: The practical guide Cross-border real estate investments: Strategies for your portfolio Compliance and Reporting: How to stay on the safe side Implementation in Practice: From planning to your first return Common mistakes and how to avoid them FAQ: The most important questions about real estate investment from Malta Picture this: Youre enjoying your morning on a terrace in Sliema, reviewing your rental income from Berlin, Munich, and Milan—paying just 5% tax. Sounds too good to be true? Welcome to the reality of Maltas non-dom status for international property investors. I still remember my first conversation with a tax advisor here. “Malta for real estate?” he asked skeptically. Three years and a seven-figure property portfolio later, I know: This small Mediterranean island is not just a holiday paradise—it’s one of Europe’s smartest locations for cross-border real estate investment. In this guide, I’ll show you how to invest in international real estate from Malta and make the most of the Maltese tax system. You’ll discover when non-dom status pays off, how to treat rental income and capital gains for tax purposes, and which structures really work. But beware: I’ll also tell you honestly when Malta isn’t the right choice. Malta as a base for international real estate investments: Why the island can become your tax haven In recent years, Malta has become the secret favorite among Europe’s tax optimizers. But why exactly this 316-square-kilometre island between Sicily and North Africa? The Malta Non-Dom Status: Your key to 5% tax on foreign income The heart of Malta’s appeal is the Non-Dom Status (Non-Domiciled Resident). Sounds complicated? It isn’t. Here are the basics: As a Non-Dom Resident, you only pay tax in Malta on income that you actually transfer to Malta. Everything that remains abroad is tax-free. For rental income, this means: Your revenue from Germany, Italy, or Spain is only taxed if you transfer it to Malta. And here’s where it gets really interesting: If you bring this income to Malta, you’ll pay a maximum of 5% tax on it. Not 35%, not 25%—just 5%. This is achieved by combining non-dom status with a special regime for foreign-sourced income. Example calculation: You generate €100,000 in rental income from three properties in Germany. As a non-dom resident, you transfer €60,000 to Malta to cover living expenses. Maltese tax liability: €3,000 (5%). The remaining €40,000 stays in your German account and is tax-free in Malta. The requirements for non-dom status are straightforward: You must spend at least 183 days per year in Malta, not be a Maltese national, and Malta must not be your domicile (main tax residency). The latter sounds paradoxical but works: You are tax resident, but not domiciled. Malta vs. other EU locations: An honest comparison Before you get too excited and start packing your bags, lets be honest: Malta isn’t the best choice for everyone. Here’s a realistic comparison with other popular EU locations for real estate investors: Country Rental Income Tax Rate Capital Gains Tax Special Features Minimum Stay Malta (Non-Dom) 5% (remittance) 5% (remittance) Only on amounts transferred 183 days Portugal (NHR) 0-28% 0% 10-year limit 183 days Cyprus (Non-Dom) 0-35% 0% 17-year limit 183 days Spain 19-47% 19-23% Beckham Rule for 6 years 183 days Germany 0-45% 26.375% Progressive rental income taxation – What does this mean for you? Malta excels if you have high and ongoing foreign income. Portugal (NHR program) can be more attractive for the first 10 years, but it’s temporary. Cyprus offers capital gains benefits, but brings political risks. When Malta pays off for you (and when it doesnt) After three years experience in Malta and countless conversations with other property investors, I can offer these rules of thumb: Malta is a good fit if: You generate at least €200,000 a year from foreign real estate You’re flexible and can spend 6+ months per year in Malta You want to build a diversified portfolio in multiple EU countries You prefer English as your working language (official in Malta) You value EU membership and political stability Malta is NOT for you if: Your property income is less than €100,000 annually (cost > benefit) You only invest in one country (e.g., Germany) You can’t or dont want to fulfill the 183-day rule You need big cities and cultural variety (Malta is… compact) You rely on public transport (Malta = car country) An investor from Munich told me recently: “Malta is perfect for my business, but after two years I miss the Bavarian mountains and German punctuality.” Be honest with yourself: Tax savings alone won’t make you happy. Cross-Border Real Estate Investment: The tax basics you need to know Before we dive into Malta-specific details, you need to understand the basics: How does cross-border real estate taxation actually work? These fundamentals decide if your Malta strategy succeeds—or becomes an expensive lesson. Withholding tax vs. residency taxation: Understand the principle International property taxation follows a simple but important rule: Property is always taxed where it is located (withholding tax). At the same time, your country of residence wants to tax all your worldwide income (residency taxation). For example: As a Malta resident, you own a rental apartment in Berlin. Germany wants to tax the rental income (withholding tax) AND Malta wants to tax it as part of your worldwide income (residency-based taxation). Without protection, you pay double. Practical example: You earn €5,000 per month from a Berlin apartment. Germany charges about 35% income tax (€1,750). Malta, as your country of residence, would demand another 35% on the €5,000. Without a double taxation agreement (DTA), you’d pay €3,500 instead of €1,750 in tax. This is where Double Taxation Agreements (DTA) come in. These agreements between countries define who can tax what and how double taxation is avoided. Malta has DTAs with almost all EU countries and many others. Double taxation agreements: Your protection against double taxes Double taxation treaties are your most important tool in cross-border real estate investments. They mainly work via two mechanisms: 1. Credit method: You pay tax in the source country (e.g., Germany) and offset this against your Maltese tax liability. Example: Germany charges €1,750, Malta wants €1,750—you pay €1,750 in Germany, €0 in Malta. 2. Exemption method: The country of residence (Malta) does not tax certain income at all—less common for property, but possible with some DTA setups. The Maltese DTAs are especially attractive to property investors since they mostly apply the credit method. Combined with non-dom status, this results in major tax advantages: Germany-Malta DTA: German rental income taxed in Germany, Malta gives credit—but only on remitted amounts Italy-Malta DTA: Same principle, with nuances for certain property types Spain-Malta DTA: More complex, but can be highly advantageous with the right setup Malta’s unique features: What other countries don’t offer Malta has three unique characteristics that make it so attractive to international real estate investors: 1. Remittance basis for non-doms Unlike Germany or Austria, Malta only taxes income you actually bring to Malta as a non-dom. This gives you full control over your tax burden. 2. 5% minimum tax on foreign source income Transferring foreign income to Malta triggers a maximum tax of just 5%—no matter how much. This rule is unique in the EU. 3. Flexible company structures Malta offers various corporate forms for real estate holdings that are highly tax-efficient. Especially the Maltese Private Limited Company, combined with the participation exemption, brings additional advantages to larger portfolios. A German investor with 15 properties told me: “In Germany, I’d have paid €200,000 in tax on my rental income. In Malta with non-dom status: €15,000. The move paid for itself within the first year.” But a word of caution: These benefits only work if implemented correctly. Mistakes in structuring can be costly, as we’ll see in the next section. Tax treatment of international real estate portfolios in Malta: The practical guide Let’s get concrete. How do you, as a Malta resident, actually pay tax on your international property income? Ill walk you through the key scenarios—with real numbers and practical examples from my own experience. Foreign rental income: How non-dom residents are taxed Rental income is a classic in property investment. As a non-dom resident in Malta, you have a crucial advantage: you decide when and how much is taxed. The basic rule: Foreign rental income in Malta is only taxable if you transfer it to Malta (remittance basis). What stays on your foreign account doesn’t matter to the Maltese tax authorities. Practical example – German rental portfolio: You own three apartments in Munich and generate net monthly rental income of €8,000 (annually = €96,000). As a Malta non-dom, you transfer only €40,000 to Malta for living expenses, the remaining €56,000 stays in Germany. Tax burden: – Germany: ~€30,000 (income tax on all €96,000) – Malta: €2,000 (5% tax on €40,000 transferred) – Credit: The German €30,000 is set off against your Maltese tax liability – Result: You only pay the German €30,000, no additional Maltese tax The trick: If you had transferred the full €96,000 to Malta, your Maltese tax would be €4,800 (5% of €96,000)—still well below Germany’s rate of around 31%. Key timing strategies: Year-end optimization: Transfer large sums in January of the following year to defer tax Investment timing: Use accumulated foreign income to buy property abroad without bringing it to Malta Living cost planning: Precisely calculate your Malta cash needs to avoid unnecessary transfers Capital gains on sale: How to apply the 5% rule correctly Capital gains are often the biggest item in real estate investments. A sale after 10 years can easily generate six-figure profits. This is where Malta really shines. The basic rule: Capital gains from foreign real estate are also subject to the remittance principle in Malta. Plus: They fall under the 5% rule for foreign-source income. But here’s where it gets tricky. Many countries don’t tax capital gains on property at all, or tax them much less than rental income. This opens up real optimization opportunities: Country Property Capital Gains Tax Holding period for exemption Malta treatment (Non-Dom) Germany 0% (private, >10 years) 10 years 5% on remitted amounts Austria 0% (principal residence, >2 years) 2 years 5% on remitted amounts Spain 19-23% None 5% on remitted amounts Italy 26% 5 years (principal residence) 5% on remitted amounts Case study – German property sale: An investor sells a Berlin apartment after 12 years with €300,000 profit. In Germany: tax-free (>10-year holding period). As a Malta non-dom, he transfers €100,000 to Malta, reinvesting the remaining €200,000 directly into new property in Portugal. Tax burden: – Germany: €0 – Malta: €5,000 (5% on €100,000 transfer) – Effective tax: 1.67% on the total gain This combination makes Malta especially attractive for buy-and-hold strategies with occasional sales. You accumulate tax-free or low-tax capital gains abroad and only transfer funds to Malta when needed. Structuring through Maltese companies: When its worth it Once your portfolio gets big enough, the question arises: Hold property privately or through a Maltese company? The answer depends on your individual situation. Advantages of a Maltese Limited Company for real estate: Participation exemption: Dividends from foreign property holdings may be tax-free under certain circumstances Loss utilization: Losses from different properties can be offset more easily Financing: Banks often prefer to lend to companies rather than individuals Succession planning: Transferring shares is easier than direct property transfer Disadvantages and costs: Annual company costs (accounting, compliance): €5,000–€15,000 More complex tax planning required Possible financing challenges in some countries CRS reporting requirements (automatic information exchange) Rules of thumb for your decision: Portfolio value below €2 million: Usually not worth it; costs outweigh benefits Portfolio value €2–5 million: Case-by-case, depending on country mix and strategy Portfolio value over €5 million: Almost always worth it; considerable tax benefits possible An Austrian investor with 12 properties in three countries told me: “The Maltese holding structure saves me about €80,000 in tax every year. The €12,000 extra compliance costs are well spent.” Important: These structures must be set up properly from the start. Retrofitting your structure later can create tax disadvantages and is often complicated. Cross-border real estate investments: Strategies for your portfolio Malta for tax purposes is one thing—but where should you actually invest? After three years of building international property portfolios from Malta, here are my insights into the key target markets. Germany: Managing property from Malta For many Malta residents, Germany remains the core of their portfolio. For good reason: stable rental markets, clear legal frameworks, and the Germany-Malta DTA makes tax planning manageable. Tax specifics for German properties: Rental income: Taxed in Germany at 25–42%, Malta credits on remitted amounts Capital gains: Tax-free after 10 years—perfect for Malta non-dom Depreciation: German depreciation (2% p.a.) significantly reduces German tax Deductibles: Travel costs Malta-Germany can be deducted as expenses Optimization tip: Buy properties in need of renovation in Germany and finance the upgrades with accumulated Malta income. Renovation costs reduce your German tax while increasing property value. Practical challenges: Property management: Hard to coordinate from Malta, external managers often required Tenant support: Minor time zone difference, but on-site presence is tricky for issues Contractors: Without a local contact, every repair becomes a project My tip: Only invest in markets you know well. Hamburg, Munich, or Berlin are easier to manage from Malta than small towns in Brandenburg. Italy: High-yield properties and tax pitfalls Italy is particularly attractive for Malta residents: short flights, similar mindset, and sometimes very high yields. But beware—the Italian tax system is tricky. The opportunities: High yields: 8–12% gross possible in Southern Italy Low purchase prices: Sicily, Calabria, Apulia offer inexpensive entry EU-standard: Legal and property rights are reliable Geographic proximity: Malta is just 1–2 hours away The risks: Complex taxation: Italy has several different regimes for foreigners Bureaucracy: Purchase process can take 6–12 months Vacancy risk: Hard to rent out in economically depressed areas Cedolare secca: Italy’s flat tax can cancel out Malta advantages Region Ø Gross yield Purchase price/m² Malta investor recommendation Milan 3–5% €4,000–8,000 Best for long-term strategy Rome 4–6% €3,000–6,000 Very solid, but pricey Sicily 8–12% €800–2,000 High potential, higher risk Apulia 6–10% €1,000–2,500 Good compromise A German investor bought five apartments in Bari in 2022, averaging €60,000 each. After renovations, he earns €500 rent per apartment—that’s a yield of over 10%. “Without the Malta tax benefits, it wouldn’t have worked,” he says. Spain: Structuring holiday properties the right way Spain is the classic spot for European second homes and vacation properties. Valencia, Alicante, Malaga—everywhere new projects spring up. But how do you structure Spanish properties for optimal taxation when you’re based in Malta? Understanding Spanish tax structures: Residentes vs. No Residentes: As a Malta resident, you count as a “No Residente” in Spain IRNR (Non-Resident Income Tax): 19% flat rate on rental income Capital gains: 19% for non-residents, with no personal allowance Wealth tax: For real estate holding in Spain exceeding €700,000 The combination of IRNR and Malta non-dom can be highly efficient: Example calculation – Costa del Sol apartment: Purchase price: €300,000, rental income: €18,000/year – Spain: €3,420 IRNR (19% of rental income) – Malta: €900 (5% on €18,000 transferred to Malta) – DTA credit: Spanish €3,420 is credited – Effective burden: €3,420 = 19% (no additional Malta tax) Vacation property strategy from Malta: Personal use + rental: Live there 2–3 months, rent out the rest Short-term letting: Use Airbnb/Booking.com for higher returns Long-term holding: Focus on capital appreciation and future tax-free sale Eastern Europe: Using emerging markets smartly Poland, Czech Republic, Croatia—Eastern Europe offers bold Malta residents interesting opportunities. The markets are growing, EU membership means legal certainty, and yields are often in double digits. Top markets for Malta investors: Poland (Warsaw, Kraków): 6–8% return, stable democracy, EU rules Czech Republic (Prague): 4–6% return, very low capital gains taxes Croatia (Zagreb, Split): 5–10% return, EU member since 2013, growing tourism Hungary (Budapest): 6–9%—but watch for political risks Special advantages of Malta structure in Eastern Europe: Low local taxes + Malta’s 5% rule = minimal total burden EU freedom of movement makes purchase/management easier Currency risk eliminated in euro countries (Slovakia, Slovenia) Malta-East Europe DTAs are usually very investor friendly A Swiss investor with Malta residency bought six apartments in Warsaw in 2021 for €150,000 each. With an 8% gross yield and clever Maltese structuring, his total tax burden is under 10%—in Switzerland, he’d pay over 30%. Don’t forget the risks: Investments in Eastern Europe require local know-how, political shifts can impact markets, and liquidity is often lower than in Western Europe. Compliance and Reporting: How to stay on the safe side The Malta non-dom status is legal and EU-compliant—but only if you follow the rules. After three years in Malta, I can tell you: Compliance is where most mistakes happen. And those mistakes can be expensive. Maltese tax return: What you need to declare As a Malta resident, you have to file an annual tax return. The Maltese system is luckily less complicated than the German one, but it has its own peculiarities. Key deadlines and dates: June 30: File the tax return for the previous year December 31: Settle any tax owed (if applicable) Quarterly: Advance tax payments for higher income What to report in your Maltese tax return: All worldwide income (even if not remitted to Malta) Exact amounts transferred to Malta Foreign taxes paid (for DTA credit) Property holdings worldwide (even if not income-producing) Bank accounts and investment accounts outside Malta Important note: You must declare ALL income, even if not taxed. Malta wants a complete overview of your financial situation. Concealing income is not an option, and can cost you your non-dom status. Typical mistakes in the Maltese tax return: Incorrect remittance calculation: Many misunderstand when a transfer counts as ‘remitted’ Forgetting DTA credits: Foreign taxes paid need to be properly credited Timing mistakes: Transfer on December 31 vs January 1 can move income into another tax year Exchange rates: Incorrect conversion of foreign currencies My tip: Invest in a good Maltese tax advisor. The €2,000–€4,000 per year is well spent and will save you plenty of headaches later. CRS and automatic information exchange: Transparency is a must Since 2017, EU countries automatically exchange financial information (Common Reporting Standard – CRS). For Malta residents, this means: Your home countries will learn about your Maltese accounts and income. What is reported automatically: Balances on Maltese bank accounts above €250,000 Interest and dividends Proceeds from securities sales Insurance payouts from life policies What is NOT reported automatically: Overseas real estate (unless via companies) Balances under €250,000 Cash and physical assets Private loans between individuals Important: CRS makes tax evasion virtually impossible. If you hid income in the past, make things right before moving to Malta. Voluntary disclosure is almost always cheaper than discovery by the authorities. Documentation: What paperwork you need Proper documentation is absolutely essential for international property investments. Both Maltese and foreign authorities can ask you at any time to prove where your funds came from and how you paid tax. Required documentation for Malta: Residence certificate: Annual proof of Malta residency Tax residence certificate: Confirmation of Maltese tax liability Transfer receipts: All transfers to Malta, with date and purpose Rental contracts and utility bills for overseas properties Foreign tax notices for DTA credit Recommended supporting documentation: Property purchase contracts with financing details Renovation invoices for added value Management cost receipts (flights, hotels for property visits) Currency conversion records at historic rates Company agreements if using corporate structures Document Retention period Importance How to obtain Malta Tax Residence Certificate Permanent Critical Malta Tax Department Transfer receipts 10 years Critical Bank statements Foreign tax notices 10 years High Local tax authorities Property purchase contracts Permanent High Notary/lawyer Renovation invoices 10 years Medium Contractor/construction company A German investor told me: “After five years, I was audited by the German tax office. Because I had everything documented, the audit was done in two hours. My neighbor with no documentation has been fighting his for two years.” Digital organization tips: Use cloud storage with EU servers (GDPR compliant) Scan all documents immediately upon receipt Use consistent filenames (Year-Month-DayDocumentTypeCountry) Create annual backups on external drives Share key documents with your tax advisor Implementation in Practice: From planning to your first return Enough theory—how do you put this into practice? Here’s my step-by-step process, from first idea to ongoing optimization of your international property portfolio. Your first property: Step by step to cross-border investment Your first international property investment from Malta is a milestone. Here’s the tried-and-tested approach from my experience: Phase 1: Laying the groundwork (Months 1–3) Establish Malta residency: Prove 183+ days spent in Malta Open a Maltese bank account: HSBC or BOV are reliable Find a tax advisor: Specialist in non-dom status Define your target market: Choose country and region Clarify budget and financing: Equity vs. loans Phase 2: Market research and property search (Months 3–6) Build local expertise: Agents and lawyers on site Tax analysis: Study DTA, consult local tax advisors View properties: Personally visit at least 3–5 options Due diligence: Legal review, building inspection, market comps Apply for financing: Local banks or Maltese sources Phase 3: Purchase and integration (Months 6–9) Negotiate contract: Price, terms, timing Tax optimization: Time the purchase for the Malta tax year Notarization and transfer: Transfer all docs to Malta Prep for rental: Renovations, furnishing, marketing Set up management structure: Property manager, accounts, processes Case Study – First Berlin apartment: An IT consultant from Vienna bought his first property in Berlin-Kreuzberg in 2023 for €450,000. Equity: €150,000 from Malta tax savings; loan: €300,000 from the Berliner Volksbank. Rental income: €1,800/month. After German tax (about €600/month), he transfers €1,200 to Malta. Maltese tax: €60/month (5%). Effective return on equity: 9.6% p.a. Building your portfolio: Smart diversification A single investment is just the beginning, but true wealth comes from intelligent diversification. Malta gives you every option. Geographical diversification – my recommended mix: 40% core market (Germany/Austria/Switzerland): Stable returns, familiar markets 30% growth markets (Spain/Italy): Higher returns, more risk 20% emerging markets (Eastern Europe): Speculative opportunities 10% alternatives (REITs/real estate crowdfunding): Liquidity and further diversification Real estate type diversification: Residential (60%): Classic lettings, steady cash flow Commercial (25%): Higher returns, longer leases Holiday property (15%): Personal use + rental, appreciation potential Year Investment Country Amount Expected return 1 Apartment Berlin Germany €450,000 4.8% 2 Apartment Valencia Spain €280,000 6.4% 3 Office Vienna Austria €650,000 5.2% 4 3x Apartment Warsaw Poland €450,000 8.1% 5 Villa Sicily Italy €320,000 7.3% Financing strategy over 5 years: Years 1–2: Conservative financing (60–70% LTV) Years 3–4: Use cross-collateralization, portfolio as security Year 5+: Refinance for new investments Tax advice: How to find the right expert For cross-border property investment, you need experts in at least two countries. Finding the right advice is critical—and harder than you think. Malta tax advisors: What to look for Non-dom specialization: At least 50% of clients should be non-dom Property expertise: Experience with international real estate portfolios DTA knowledge: Deep understanding of relevant double taxation treaties Proactive advice: Not just tax returns, but planning as well English + German: Communicate clearly in both languages Costs for professional advice (Malta): Annual compliance: €2,500–€5,000 Tax planning: €150–€300/hour Structuring advice: €5,000–€15,000 one-off Ongoing support: €500–€1,500/quarter Target country expertise (Germany/Austria/Spain, etc.): Local tax advisor: Essential for complex country-specific issues Property lawyer: Especially for purchases and structuring Auditor: For larger portfolios and annual statements Beware cheap advisors: An investor saved €1,500 on fees by choosing a cheap online service. Result: €25,000 in back tax due to misapplied DTA rules. Quality pays for itself. Interview questions for potential advisors: “How many non-dom clients with property portfolios do you serve?” “Can you explain the Germany-Malta DTA for real estate?” “How would you structure a €2 million portfolio?” “Which software do you use for the Malta tax return?” “Do you have contacts with German/Austrian/Spanish colleagues?” Finding the right advisors takes 3–6 months, but this time and money will pay off for decades. Common mistakes and how to avoid them In three years of experience with Malta, I’ve seen many investors—and many missteps. Some just cost nerves, others cost five- or six-figure sums. Here are the most common traps and how to sidestep them. Structural mistakes that become expensive The biggest mistake usually comes at the very start: choosing the wrong structure—or no structure at all. Once made, these mistakes are hard and costly to fix. Mistake #1: Buying property privately when a company would be better An Austrian entrepreneur bought four properties in Italy privately in 2021, total value €1.8 million. Problem: At this scale, a Maltese holding would have saved €40,000 in tax per year. Transferring them into a company later would trigger gift tax. How to avoid: Always get structural advice for portfolios over €1.5 million. Mistake #2: Choosing the wrong company form Not every Maltese company is right for real estate. A German investor used a Malta trading company for property—and lost the participation exemption on dividends. How to avoid: Only use lawyers who specialize in real estate holdings. Mistake #3: Timing company formation incorrectly Setting up a company after buying property often brings tax disadvantages. The transfer can be treated as a sale and trigger taxes. How to avoid: Structure everything BEFORE your first investment. Timing problems with residency Non-dom status is linked to strict presence rules. Timing errors can cost your status—and all your tax advantages. Mistake #4: Miscalculating the 183-day rule Many think “6 months = 183 days = Malta resident.” But Malta counts every calendar day. Arrival late on July 1 + departure early January 1 = 2 days, not 1.5. How to avoid: Keep a meticulous travel log with entry/exit stamps. Mistake #5: Overlooking double residency A German investor kept both German and Austrian passports. He was treated as tax resident in both, even though he spent 200+ days in Malta. How to avoid: Properly deregister all previous tax residencies. Mistake #6: Interrupting residency Covid 2020: One investor was stuck at 160 days in Malta due to travel restrictions. Lost non-dom status led to €80,000 back taxes for the whole year. How to avoid: Plan a buffer; aim for 200+ days in Malta annually. Underestimated incidentals Many investors only account for the obvious costs. Hidden incidentals can quickly eat up 20–30% of your yield. Cost item Annually Underestimated by Realistic budget Malta tax advice €3,000 50% €4,500 Foreign tax advice €2,000 100% €4,000 Travel costs for property management €3,000 200% €9,000 Property management/administration €1,500 50% €2,250 Compliance/reporting €1,000 100% €2,000 Currency risk/fees €800 300% €3,200 Mistake #7: Treating travel costs as private Flights Malta–Berlin for property inspection are deductible expenses! Many forget this and lose 30–40% tax savings on travel. How to avoid: Document all property-related travel and record it as business expenses. Mistake #8: Ignoring currency risk A Swiss investor with properties in Poland lost 15% of his euro yield to zloty fluctuations in 2022. No hedging, no calculation. How to avoid: Hedge currency risk in non-euro countries with forwards or natural offsets. Mistake #9: Neglecting liquidity planning Property is illiquid. In 2023, an investor needed quick cash and had to sell at a discount. Loss: €80,000. How to avoid: Keep no more than 70% of your wealth in property; keep the rest liquid or near-liquid. The most expensive mistake Ive seen: A German entrepreneur structured his €5 million portfolio via a Dutch BV instead of a Maltese company. Reason: Cheaper advisor. Annual extra cost due to inferior structure: €120,000. After three years, the “cheaper” advisor had cost €360,000 more than the Maltese specialist. My top lessons after three years in Malta: Invest in the best advice you can afford Plan your structure BEFORE buying your first property Document EVERYTHING that might be relevant for tax Budget incidentals 50% higher than you estimate Keep 20–30% of your wealth in liquid assets at all times FAQ: The most important questions about real estate investment from Malta Can I lose Malta non-dom status? Yes, non-dom status is not permanent. You lose it if you spend less than 183 days in Malta per year, acquire Maltese citizenship, or make Malta your tax domicile. An interruption can cost you the entire tax benefit retroactively. Do I have to pay tax on all my foreign income in Malta? No, as a non-dom resident, you are only taxed on income remitted to Malta. What stays in foreign accounts is tax-free in Malta. However, you must declare ALL income on your tax return. What is the minimum income for Malta to be worthwhile? As a rule of thumb, you should generate at least €200,000 per year from foreign sources. For lower amounts, compliance costs (€5,000–€10,000 per year) can eat up all tax savings. Can I finance German property from Malta? Yes, German banks do finance Malta residents. However, the terms are often less favorable than for residents of Germany. Alternative: finance through Maltese banks or international private banks. How does the 5% rule work for different income? The 5% only applies to foreign-source income remitted to Malta. Rental income from Germany transferred to Malta is taxed at a maximum 5%. German taxes paid are credited. Do I have to sell my German properties? No, you can keep existing properties. Malta non-dom status only affects future taxation. However, you should consider whether restructuring into a Maltese holding is worthwhile. What happens to my German health insurance? As a Malta resident, you are covered under Malta’s national health system. EU residents have access to health care in Malta. Many also choose private insurance for better coverage. Can I invest in all EU countries from Malta? Generally yes, thanks to EU freedom of movement. Some countries restrict foreign ownership of certain property types (e.g. agricultural land). Malta has double taxation treaties with almost all EU countries. How soon do I see the first tax benefit? From your very first day of Malta residency. Move to Malta in January 2024, buy property in Germany in March, and youll benefit straight away for the 2024 tax year (filed by June 2025). What’s the biggest mistake in Malta real estate investment? Lack of preparation. Many underestimate the complexity and scrimp on advice. Wrongly structured setups can cost more long-term than the taxes saved. Always invest up front in professional advice—it’s worth it.
