Second Home in Malta: Legal and Tax Aspects for International Owners

Imagine this: Youre sitting on your terrace in Sliema, gazing out at the turquoise Mediterranean, thinking, This could be my life. The dream of a second home in Malta is tempting—300 days of sunshine per year, EU membership, English as an official language. But between that first I want to buy an apartment here and sipping a relaxed evening Cisk with a sea view, theres a whole lot of legal and tax-related hurdles to cross.

Ive been living in Malta for two years, making the journey from sun-seeker to second-home owner. Along the way, I tripped over just about every bureaucratic nightmare this island has to offer. The good news: Its possible. The bad news: Without the right info, it gets expensive and nerve-wracking.

In this article, I’ll walk you through everything you need to know about having a second home in Malta—from the legal basics to tax pitfalls, right down to those hidden costs that even seasoned agents tend to “forget” to mention. Spoiler: It’s more complicated than moving to Berlin within the EU, but easier than applying for a Green Card.

Second Home in Malta: What Does It Legally Mean?

Before we dive into the details, let’s clarify what “second home in Malta” actually means. Legally, it’s quite a stretchy term, which can have a variety of consequences depending on your nationality, length of stay, and your intentions.

EU Citizens vs. Third Country Nationals: The Critical Difference

As an EU citizen, you’ve got a major advantage: You can enter Malta visa-free, settle wherever you like, and even work. Sounds easy enough—but there are still rules to follow.

EU Citizens (Germany, Austria, Italy, etc.):

• Stay up to 90 days: No registration needed
• Stay over 90 days: Registration with the Maltese police required
• Permanent residence: EU Long-Term Residence Status possible after 5 years
• Buying property: Generally allowed, but with restrictions

Third Country Nationals (Switzerland, UK post-Brexit, USA, etc.):

• Stay up to 90 days in 180 days: Tourist status
• Longer stay: Visa or residence permit needed
• Malta Nomad Residence Permit: For remote workers (1 year, renewable)
• Global Residence Programme: For wealthy foreigners

I still remember my first dealings with the authorities. As a German citizen, I thought: EU freedom of movement, this’ll be easy. Not at all. Even within the EU, you have to officially register if you’re staying longer.

Residence vs. Second Home—a Legal Grey Area

Heres where it gets interesting: Malta distinguishes between residence (your place of living) and domicile (your central point of life). This difference has huge tax consequences, which I’ll explain later.

You obtain Maltese residence if:

• You spend more than 183 days a year in Malta
• You move your center of life to Malta
• You open a Maltese bank account and establish local ties

A second home without residency means:

• You keep your main home in your home country
• You spend less than 183 days in Malta
• You remain tax resident in your home country

The catch: Malta is extremely strict about the 183-day rule. They don’t just count the nights you stay, but also arrival and departure days. My tip: Keep meticulous records of all your stays. An Excel spreadsheet with entry and exit dates will save you endless headaches with the Maltese tax authorities.

Residence Rights for Second Home Owners

Just because you own property in Malta doesn’t mean you automatically have the right to live here. That’s a very common misconception I often see in German Facebook groups.

The reality:

• Property ownership ≠ right of residence
• You must comply with standard visa and residence regulations
• For longer stays, you still need to register
• Renting out your property requires additional permits

What does that mean for you? Plan your visits strategically and always stay within the permitted time periods. Otherwise, your dream second home can quickly turn into a bureaucratic nightmare.

Malta Second Home Taxes: The Rules You Need to Know

This is the heart of it—the taxes. This is where things get real, because Malta’s tax system is quite unlike anything you know from Germany or Austria. The good news: With proper planning, you can legally save taxes. The bad news: One mistake can get very expensive.

Tax Liability with a Second Home in Malta: When Is It Time to Pay Up?

Malta has what’s called a “remittance basis system” for non-domiciled residents. Sounds complicated, but it’s actually clever: You only pay Maltese taxes on income actually transferred to Malta.

You are tax resident in Malta if:

• You spend more than 183 days per year in Malta
• You officially move your residence to Malta
• You derive Maltese income (e.g. rental income)

You are NOT tax resident in Malta if:

• You spend less than 183 days in Malta
• You keep your primary residence in your home country
• You don’t transfer income to Malta

Here’s a concrete example from my consulting: Anna from Munich owns an apartment in Valletta, which she uses herself for 3 months a year and rents out for the rest. The rental income is paid into her German account. Result: She is tax resident in Germany, not Malta.

Making Use of the Germany-Malta Double Taxation Agreement

The double taxation agreement (DTA) between Germany and Malta is your best friend for tax planning. It ensures you don’t pay taxes on the same income in both countries.

Important: The DTA only applies if you’re properly registered. Staying under the radar can cause problems with both tax offices.

The 183-Day Rule and Its Traps

The famous 183-day rule isn’t quite as simple as it appears. Malta counts differently than Germany, which can lead to some nasty surprises.

How Malta counts:

• Arrival day counts as a full day
• Departure day counts as a full day
• Stopovers over 24 hours count as a day present
• Technical stopovers dont count

Example: You fly to Malta on March 1 and return August 31. That’s not 5 months, it’s 184 days—which makes you tax resident in Malta. Ouch.

My mistake in the first year: I miscounted my days and ended up 12 days over the threshold. The Maltese tax office was not amused and demanded a full tax return. Since then, I keep a meticulous Excel record.

Pro tip for planning your stays:

• Plan deliberate breaks of at least 7 days at a time
• Use the Christmas period for stays in Germany
• Document all flights and ferry trips
• Get your passport stamped on entry and exit (even within the EU)

What does that mean for you? Be strategic in planning your stays. 183 days sounds like a lot, but it adds up faster than you think—especially if you prefer Malta’s winter to Germany’s.

Buying Property in Malta as a Foreigner: Legal Requirements

Now for the most exciting part: buying property. Here too, Malta clearly differentiates between EU and non-EU citizens—and even as an EU citizen, you can’t just buy whatever you like.

AIP (Acquisition of Immovable Property) Permit: When Do You Need One?

The AIP permit is Malta’s version of a purchase permit for foreigners—only more complicated. Whether you need it depends on your nationality and the type of property you want to acquire.

AIP permit required for:

• All non-EU citizens (no exceptions)
• EU citizens buying in restricted areas
• EU citizens buying more than one property
• Commercial properties over certain sizes

No AIP permit required for:

• EU citizens buying their first property in unrestricted areas
• Maltese citizens
• People with EU Long-Term Residence Status

Processing takes 6–12 weeks and costs between €1,500 and €3,000—depending on the purchase price. My tip: Apply for the permit before house-hunting, not after. Sellers take you more seriously if you’ve already obtained approval.

Restricted vs. Unrestricted Areas: The Malta Property Map

Malta classifies districts as restricted and unrestricted areas. This division dates back to the 1970s and often no longer makes sense today, but Maltese law is set in stone.

I originally wanted to buy a townhouse in Valletta—romantic, historic, authentic. Then I found out that as an EU citizen I’d need an AIP permit, renovation rules are crazy, and I wouldn’t even be allowed to change the color of my windows without permission. In the end, I bought a modern apartment in Sliema—less charm, but less bureaucracy.

Price Controls and Minimum Prices: Malta’s Artificial Property Market

Malta has set minimum prices for foreigners to “prevent speculation.” In practice, this means: As a foreigner, you’ll automatically pay more than locals.

Current minimum prices for foreigners (as of 2024):

• Main island of Malta: €275,000 for apartments, €400,000 for houses
• Gozo: €220,000 for apartments, €300,000 for houses
• These prices are updated annually (usually increased)

In practice: Even if you find a fixer-upper in Valletta for €200,000, you’d still have to pay at least €275,000. The difference goes to the state—a kind of hidden foreigner tax.

But there are loopholes: Anyone with a Maltese partner or who’s lived legally in Malta for five years can buy at local rates. Some of my German friends got married first, then bought. Not so romantic, but financially smart.

What does this mean for you? Factor the minimum prices into your budget and don’t get too upset by the unfairness. That’s just the way things are here. Focus on finding a good property anyway.

Registering a Second Home in Malta: Step-by-Step Guide

Now let’s get practical: How do you register your second home properly? Ill guide you through the entire process—from your first government office to your final stamp. Spoiler: It takes longer than you think, and it rarely goes the way the website describes.

Documents and Appointments: Malta’s Bureaucracy Marathon

Maltese officials love paperwork. Lots of paperwork. And they like it when you come back multiple times because you always forget something the first time.

Essentials for EU citizens:

1. EU passport or national ID card (original + 2 copies)
2. Proof of accommodation: Rental contract, purchase agreement, or hotel confirmation
3. Proof of funds: Bank statements from the last 3 months
4. Health insurance certificate: EHIC or private policy
5. Proof of employment: Work contract, business registration, or pension statement
6. Passport photo: 2 units, EU standard (35x45mm)

Additionally for non-EU citizens:

• Visa or residence permit
• Apostilled birth certificate
• Police clearance certificate (no older than 6 months)
• Proof of international health insurance

My tip: Get all your documents notarized before coming to Malta. Maltese authorities often don’t accept German certifications, and you’ll end up needing to schlep everything to the German embassy.

The Authority Gauntlet: From Immigration to Customs

Step 1: Expatriate Unit (Immigration Police)

Address: Police Headquarters, Floriana
Opening hours: Mon–Fri 8:00–12:00 (yes, just four hours!)
Queue: Allow 2–3 hours

This is where you’ll get your “Residence Certificate”—the yellow sheet that proves you legally live in Malta. Without it, nothing works here.

Step 2: Inland Revenue (Tax Office)

Address: St. Calcedonius Square, Floriana
Opening hours: Mon–Fri 8:00–16:30
Queue: Now with online appointment booking

This is where you get your Maltese tax number. You’ll need it for everything: bank account, rental agreements, purchase contracts, phone contracts.

Step 3: Identity Malta (formerly LESA)

Address: Various locations
Opening hours: Varies by location
Queue: Online booking available and highly recommended

Here you’ll receive your ID card—Malta’s version of the German Personalausweis. With it, you can finally open a bank account and sign contracts.

I still remember my first visit to the Expatriate Unit. I arrived at 7:30 am, thinking I’d be first when they opened. Wrong. There were already 40 people ahead of me. Lesson learned: Arrive early, but be ready for a wait anyway.

Setting up a Bank Account and Utilities: The Chicken-and-Egg Problem

Here comes the classic Malta paradox: To get a bank account, you need an address. For a rental agreement, you need a bank account. For utilities, you need a bank account. But for the bank account, you need proof of regular payments. Welcome to Malta!

The solution in 4 steps:

1. Organize a temporary address: Hotel, Airbnb, or friends
2. Open a basic bank account: With a temporary address and EU ID
3. Find permanent accommodation: With proof of bank account
4. Update your bank address: With new rental contract

Bank recommendations for foreigners:

• Bank of Valletta: Traditional, fairly straightforward for EU citizens
• HSBC Malta: International, English-speaking, but higher minimum deposits
• APS Bank: Local and affordable, but sometimes tricky for foreigners

Pro tip: Open your bank account in person, not online. Maltese banks are old school and prefer face-to-face meetings. Dress smart-casual and bring plenty of patience. A meeting with the bank manager can easily last two hours.

What does it mean for you? Set aside at least 2–3 weeks for the full registration process. And yes, you’ll need to visit every office multiple times. That’s normal, don’t get frustrated. Malta works on island time.

Costs of a Second Home in Malta: Realistic Budget Planning

Now for the part that everyone underestimates: the costs. Malta might look small and affordable, but that’s deceptive. I’ll break down what a second home really costs—from the obvious to the hidden expenses that can blow your budget.

Purchase and Ongoing Costs in Detail

For a €400,000 property, you can easily add another €50,000–80,000 in additional costs. Many people forget this when budgeting.

Ongoing costs per year:

• Condominium fees: €1,200–3,600 (depending on property & amenities)
• Property tax: €200–800 (based on value)
• Utilities (electricity/water): €800–1,500 (for part time use)
• Internet/TV: €300–600
• Maintenance/Repairs: €1,000–3,000 (highly variable)

So, budget around €4,000–8,000 per year in running costs for a standard second home. For luxury properties with pool, concierge, or sea view, expect higher costs.

Hidden Costs Nobody Talks About

The truly nasty costs often show up only after your purchase. Here’s my list of “surprises” that happened to me and my friends:

Bureaucratic costs:

• Apostilles and certifications: €300–800 per year
• Translations: €50–150 per document
• Lawyer for minor issues: €150–300 per consultation
• Official fees: €20–100 for every stamp

Property quirks:

• No elevator: Renovation on the 4th floor costs 50% more
• Old wiring: Full replacement €8,000–15,000
• Damp issues: Ongoing mold control €500–1,000/year
• Air conditioning: Installation €2,000–5,000, electricity €100–200/month

The Malta tax traps:

• Eco-contribution: €5,000 for non-EU citizens (one-time)
• Property tax: Progressive, up to 0.8% of property value
• Capital gains tax: Up to 35% if selling before 2030
• Rental income tax: 15% on rental income

My most painful hidden cost: air conditioning. The apartment had two ancient split units that used more electricity than a whole house. Replacement: €4,500. At least my electricity bill dropped from €180 to €80 per month afterwards.

Tax Consulting—When It Pays and When It Doesn’t

A good tax advisor can save you thousands—or be completely unnecessary. Here’s my take:

Absolutely get a tax advisor if:

• Your income is over €75,000/year
• You have complex international earnings
• You plan to spend more than 183 days/year in Malta
• You’re planning to rent out
• You’re self-employed or an entrepreneur

Probably NOT needed if:

• Pure holiday home (less than 90 days/year)
• Simple employment contracts
• Clear tax residency status
• Property used for personal reasons only

Typical tax advisor fees in Malta:

• Initial consultation: €200–500
• Yearly tax return: €800–2,500
• Complex tax planning: €2,000–10,000
• Ongoing support: €300–800/month

My tip: Invest in a professional tax consultation at least once, even if you think you don’t need it. Just knowing about the pitfalls and opportunities is worth the money. Then you can decide if you need ongoing support.

What does that mean for you? Be realistic in your calculations and allow for a buffer of 20–30% for unexpected costs. Malta is more expensive than it looks, but with proper planning, it’s still feasible.

Common Pitfalls When Setting Up a Second Home in Malta

After two years in Malta and countless conversations with other expats, I’ve developed a nose for the classic mistakes. These traps catch almost everyone—and some are seriously costly. Here are the biggest stumbling blocks—and how to avoid them.

Registration Timing Mistakes: When Does It Get Critical?

Timing matters for registration in Malta more than most places. Registering too early or too late can have both legal and tax consequences.

Classic mistake #1: Registering too late

Many think, “I’ll buy the property first, then register.” Wrong. You should start registration alongside the purchase process, not afterwards.

The consequences:

• Fines from €500–2,000 for late registration
• Trouble opening a bank account
• Delays in contracts
• Tax questions for unregistered periods

Classic mistake #2: Choosing the wrong category

Malta has several residence categories, and picking the wrong one can be expensive:

I have a German acquaintance who registered as a “resident” out of ignorance, even though she spent only 4 months a year in Malta. Result: Full Maltese tax return and a hefty back payment.

Underestimating Bureaucracy: The Malta Reality Check

Malta may be an EU country, but bureaucracy is still very much Italian-British style. Meaning: loads of paperwork, little digitization, and everything takes longer than promised.

Realistic timelines for key steps:

• Residence Certificate: 2–4 weeks (not the promised “few days”)
• ID card: 6–10 weeks (even though it says “4–6 weeks” online)
• Bank account: 2–6 weeks (depends on your nationality)
• AIP permit: 8–16 weeks (officially “6–8 weeks”)
• Tax number: 1–3 weeks (usually fastest)

The biggest bureaucracy traps:

• Documents expire: Many proofs are only valid for 3–6 months
• Authorities close early: Expatriate Unit closes at noon
• Holidays not announced: Malta has 14 public holidays
• Online systems often offline: Always have a plan B

My worst bureaucracy day: I got to the Expatriate Unit at 7:00 am, waited 3 hours, only to be told my bank statement was one day out of date. Next day was St. Paul’s Shipwreck (a public holiday I didn’t know about) and the office was closed.

Legal Risks with Rentals: What German Owners Overlook

Many buy Maltese property planning to rent it out when they’re not there. Good idea—but legally more complex than you think.

Types of rental and their regulations:

• Long-term (12+ months): Easy, but strong tenant protections
• Short-term (1–11 months): Complicated, special permits required
• Airbnb/holiday let: Only legal with STR license
• Furnished rentals: Additional requirements and taxes

The STR (Short-Term Rental) License:

Without this license, holiday lets are illegal—with fines up to €50,000. The license costs €500–1,500 and comes with strict rules:

• Minimum distance to schools and churches
• Maximum number of guests (often only 4–6)
• Noise restrictions (especially in Valletta)
• Fire safety and emergency exits
• All guests must be registered with the police

Tax traps with rentals:

• Rental income tax: 15% on all rental income
• VAT liability: Starting at €35,000 a year in rental turnover
• Social security: For commercial rentals
• Capital gains: Sales can be taxed higher due to rental history

A German friend rented his Sliema flat via Airbnb for two years without an STR license. Earnings: about €15,000. Fine: €25,000 plus back taxes. His lesson: Compliance costs more than you think, but non-compliance is even more expensive.

My advice for would-be landlords:

1. Check BEFORE purchase whether renting is allowed in your building
2. Factor in all license and tax costs upfront
3. Allow 2–3 months for licensing
4. Hire a local property manager (costs 15–25%, but saves headaches)

What does this mean for you? Malta is unforgiving if you’re uninformed, especially when it comes to taxes and rentals. Do your homework before making decisions, and don’t skimp on professional advice. One expensive mistake can cost you more than ten hours of expert consulting.

Frequently Asked Questions

Can I buy property in Malta as an EU citizen without restrictions?

Yes, but with some limitations. EU citizens can buy freely in unrestricted areas, but need an AIP permit for restricted areas (e.g. Valletta, Gozo). There are also minimum prices: €275,000 for apartments, €400,000 for houses on the main island.

When am I liable for tax in Malta?

You become tax resident in Malta if you spend more than 183 days a year there or move your center of life here. Arrival and departure days count as full days. With correct planning, as a non-domiciled resident you only pay tax on income transferred to Malta.

Do I need a residence permit for Malta as a German citizen?

No, as an EU citizen you don’t need a residence permit. For stays over 90 days, however, you must register with the Expatriate Unit and will receive a Residence Certificate. This registration is mandatory and free of charge.

Can I rent out my Malta property on Airbnb?

Only with an STR (Short-Term Rental) license, which costs €500–1,500 and comes with strict requirements. Without a license you face fines up to €50,000. You also must pay 15% rental income tax and register for VAT if you earn over €35,000 a year in rental income.

How long does the full registration process in Malta take?

Plan at least 6–10 weeks for all formalities. The Residence Certificate takes 2–4 weeks, the ID card 6–10 weeks, and the bank account 2–6 weeks. Remember, Malta moves at island pace, and you’ll probably be missing documents on your first visit to each office.

What does a second home in Malta really cost?

On top of the purchase price, expect 6–12% in transaction costs (stamp duty, notary, lawyer). Ongoing annual costs: €4,000–8,000 for condo fees, insurance, utilities, and maintenance. Also budget extra for hidden costs like repairs or bureaucracy fees.

Can I use my German health insurance in Malta?

The European Health Insurance Card (EHIC) gives you access to emergency care. For longer stays or residency, you’ll need private international health insurance or must register within the Maltese health system.

Which banks are best for Germans in Malta?

Bank of Valletta has traditionally been the most German-friendly. HSBC Malta is international and English-speaking (but pricier), APS Bank is affordable but sometimes challenging for foreigners. To open an account, you need your Residence Certificate, tax number, and proof of regular income.

Is it worth hiring a tax consultant for Malta?

If your income is above €75,000, you plan on stays over 183 days, or you intend to rent out—absolutely yes. An initial consultation costs €200–500 and can save you thousands in taxes. For simple holiday homes (under 90 days), it’s usually unnecessary.

What happens in a Brexit-like scenario?

Malta has been an EU member since 2004 and in the Eurozone since 2008. An exit is extremely unlikely, as the economy heavily relies on EU benefits. Existing ownership rights would also be protected via bilateral agreements in the (hypothetical) event of a withdrawal, as with other EU exits.