Malta’s 2026 Budget: Strengthening Property Investment and Market Confidence

The Malta Budget 2026 reflects a strategic vision centred on economic stability, investment attractiveness, and long-term growth. Several of the announced measures are of particular interest to the real estate sector and international investors, as they directly influence property transactions, ownership structures, and market demand. With a focus on sustained economic expansion, stable inflation, favourable fiscal measures, and infrastructural development, Malta continues to position itself as a prime location for both residential and investment property.

1. Stable Economic Outlook

Malta’s GDP is projected to grow by 4.1% by the end of 2025, with nominal GDP expected to rise from €24.7 billion to €30.2 billion by 2028. Inflation is forecast to stabilise at 2.2%, signalling a period of sustained and balanced growth.

A stable macroeconomic environment is particularly important for property buyers and investors, as it strengthens market confidence and supports long-term value growth.

2. First-Time Buyers Scheme

The First-Time Buyers Scheme will be permanently incorporated into Maltese law. Eligibility is being widened so that individuals who own non-residential property can also benefit, while the €10,000 grant spread over ten years will continue. This broadens the pool of eligible buyers and can stimulate demand in the residential property market, particularly in popular and high-value areas.

3. Reduced Stamp duty on Inherited Property

The 3.5% reduced duty rate on inherited residential property will now apply to the first €400,000 of the property’s value, doubling the previous threshold of €200,000. By lowering transaction costs for heirs and beneficiaries, this measure enhances the appeal of property inheritance and estate planning in Malta. It represents a significant tax saving for families and individuals inheriting high-value properties, particularly in prime or luxury locations where property values typically exceed the previous threshold. This change is expected to make succession planning more efficient and financially attractive, potentially encouraging earlier property transfers within families and reducing the burden on heirs. For international buyers, it also provides additional clarity and certainty in long-term wealth planning strategies.

4. Continued Support for UCA Properties

The popular Urban Conservation Area (UCA) property scheme, which exempts buyers from tax on the first €750,000 of the property price, will remain in effect. In addition, the UCA cash grants will continue to be available — offering buyers €15,000 when purchasing a qualifying property in Malta’s village cores, and an impressive €40,000 for those investing in Gozo.

These incentives not only preserve Malta’s architectural heritage but also enhance the appeal of traditional homes, making investment in restored or character properties all the more rewarding.

5. Land Reclamation and Development Potential

The government announced plans for a large-scale land reclamation project beyond the Freeport area to support maritime and commercial activities. Such an initiative could unlock new zones for future development and increase the availability of prime coastal sites, creating attractive opportunities for developers and investors alike.

6. Infrastructure and Digitalisation Investments

Malta will invest €100 million in digitalisation and technological infrastructure, focusing on areas such as AI, blockchain, cybersecurity, and advanced connectivity. These investments enhance Malta’s attractiveness to international investors, high-net-worth individuals, and digital entrepreneurs, supporting demand for both luxury residential and investment property.

7. Tourism and Rental Market Demand

The eco-contribution for tourists will increase from €0.50 to €1.50 per night, reflecting confidence in the continued strength of the tourism sector.

A robust and growing tourism market is a key driver of short-term rental demand, making this development particularly relevant for investors in hospitality and holiday properties.

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The 2026 Budget reinforces Malta’s reputation as a stable and attractive investment destination, particularly in the real estate sector. With favourable fiscal incentives, continued infrastructure development, and a strong economic outlook, the local property market offers compelling opportunities for both buyers and investors.

If you are considering purchasing property, expanding your investment portfolio, or would like tailored guidance on how these measures may impact your real estate strategy, our team at Malta Sotheby’s International Realty is here to assist.

Contact us today on +356 2010 8077/8070, or visit our offices located on the Portomaso Marina and the Tigne Point Pjazza to speak with one of our property specialists or to arrange a personalised consultation.