Looking for a sun-soaked Mediterranean destination with favourable tax treatment for retirees, excellent healthcare, and rich culture?
Malta, a historic island nation and EU member, ticks many of the boxes for expat retirees seeking a relaxed lifestyle with compelling tax advantages.
Malta’s blend of mild year-round weather, scenic coastline, and English-friendly environment makes it a popular choice for retiring expats.
It’s also a member of the European Union and the Schengen Area, meaning easy travel throughout much of Europe. English is an official language, and the island’s safety, healthcare quality, and expat communities are well-established.
According to Numbeo, living costs in Valetta are 30-40% lower than London.
Tax Advantages
Malta operates a territorial taxation system for residents who aren’t of Maltese domicile. This means you’re only taxed on Maltese source income, or income remitted to Malta.
So your wealth can stay invested offshore, and benefit from tax-free growth, until you bring it into the country.
Income arising outside of Malta is taxed at a flat rate of 15% when brought into the country. Foreign capital gains are exempt from tax, even if remitted.
For local taxable income or gains, married resident taxpayers have a €15,000 tax-free allowance, after which you’re taxed at progressive rates from 0% to 35%.
Owning Property
As a small island nation, Malta understandably has some restrictions on foreign ownership of property, but that doesn’t mean you have to rule it out.
There a no restrictions on expats purchasing in Special Designated Areas, which are usually high-end developments of apartments, in attractive locations.
For non-EU citizens, and some EU citizens, looking to buy elsewhere – you’ll first need to apply for an AIP Permit (the good news is it only costs €233).
For property purchased under an AIP Permit, there is a minimum purchase price of €174,274 for apartments, and €300,619 for other property. And the property can’t be rented out, it’s only for your personal use.
Obtaining Long-Term Residence
Malta has two main routes to obtaining long-term residence, the Malta Permanent Residence Programme and the Malta Retirement Programme. Each with different requirements.
The Malta Permanent Residence Programme is the more expensive of the two options. It requires you to have assets of over €500,000, of which €150,000 must be liquid capital. Or a net worth over €650,000 with at least €75,000 in financial assets.
On top of the financial requirements, you must also buy a property worth €375,000, or lease one with a minimum rent of €14,000 for 5 years.
In addition to that, the application fees (and contribution to the Maltese economy) add up to around €99,000.
However, this covers permanent residence for you and your spouse, dependent children, and even grandparents.
There’s no residence requirements to maintain your residence status. But bear in mind it is possible to be tax resident in multiple countries, if you spend significant time abroad.
You’ll receive a renewable 5 years visa, and after 5 years of maintaining residence, you can apply for Maltese citizenship.
Alternatively you could apply for the Malta Retirement Programme, which has lower financial requirements.
The programme is designed for pensioners, and part of the criteria is that your pension makes up 75% of your taxable income. You must also pay a minimum of €7,500 in tax each year. Plus €500 for each dependent.
You still need to purchase or rent a property, but the minimum price is €275,000, or rent of €9,600 per year.
You’ll need to reside in Malta for at least 90 days per year to maintain your residence, and spend no more than 183 days in any other country per year.
