EU states eye property tax surges – and Malta’s property market could benefit 

Spain has recently proposed to double property tax on non-EU buyers, with France, Greece and Portugal also potentially following suit. Research from 1st Move International said the potential sparks concerning impact of the EU’s property sector, making it especially difficult for UK buyers to buy second homes abroad. 

These high-tourism destinations are dealing with a spiking over-tourism problem, which hacks rental prices up and makes it much harder for locals to find affordable housing. Spain’s “golden visa programme”, similar to Malta’s in that it is a residency by investment scheme, allows foreign citizens to reside in Spain in exchange for an investment, be it property, government bonds or company shares. 

In 2024, according to UK-based moving company, Portugal, Spain and Germany were some of the most popular destinations for British buyers to relocate to. However these new laws may significantly change things for these countries – and Malta too. 

And while this happens across the Mediterranean, Malta’s controversial property market may benefit. 

“Malta still remains highly competitive for foreign buyers looking to invest in property on the island, which could further strengthen the economy by proxy of those wishing to find alternative destinations,” an expert with more than 35 years in property told BusinessNow.mt. 

Recently, the Government was looking into a scheme that would require Airbnb owners to seek consent from their immediate neighbours, but this seems to have fallen to the wayside, he added.

Another industry expert, Ian Casolani, Managing Director from BelAir Property, feels that Malta’s strong market won’t be overly touched by this potential tax surge.

“The kind of client looking to buy in Spain is typically looking to buy a holiday home and this is hardly ever the type of person who is also looking to buy in Malta. On the other hand, if this newly proposed tax in Spain had to actually happen and then rub off on destinations like Portugal, this could eventually result in a trickle effect of these investors looking towards Malta instead. This mainly since Malta and Portugal have tended to attract similar types of Residency Investors over recent years,” Mr Casolani told BusinessNow.mt 

Can foreign nationals buy property in Malta?

Malta’s has a limited supply of property, and there are therefore certain restrictions when purchasing real estate when compared to other countries in the bloc and beyond. Maltese and European Union citizens who have resided in Malta for at least five continuous years can purchase any amount of property they like. Those who have not been a resident for that amount of time must obtain an Acquisition of Immovable Property (AIP) permit before being able to buy a second residential property. This permit is not needed in for the buying of commercial use property.

Buyers from outside the EU face further restrictions. They need an AIP permit to buy any property except that situated in Special Designated Areas (SDAs) and can only acquire commercial real estate for touristic or industrial use, or for uses that contribute to the development of the Maltese Economy.