Property Tax When Selling Property in Malta for Private Individuals

Malta remains one of the most attractive real estate markets in Europe, thanks to its stable economy, favourable tax system, and strategic location. Unlike many other countries, Malta does not impose annual property taxes nor does it require yearly council taxes, which makes this Mediterranean island especially appealing to investors and homeowners.

Still, when it comes time to sell, being aware of the applicable taxes and procedural steps is essential for a smooth, successful transaction. Whether you’re relocating, downsizing, or simply capitalising on your investment, understanding the tax implications when selling your property in Malta is crucial in ensuring a smooth transaction.

Capital Gains Tax on the Sale of Property in Malta

When selling immovable property in Malta, the tax that applies is referred to as a final withholding tax, often considered Malta’s version of a capital gains tax. This tax is paid by the seller directly from the proceeds of the sale of the property.

Malta’s withholding tax is a one-time tax that is paid from the funds collected after the sale of a property. The standard withholding tax rate is generally 8% of the properties transfer value calculated after deducting allowable expenses such as brokerage or agency fees and is payable regardless of whether or not the seller has made any profit on the sale of the property.

There are however certain conditions where the seller of a property in Malta may qualify for a reduced withholding tax rate.

What are the Exceptions to Property Sale Taxes in Malta?

There are several circumstances that will allow for exceptions to be made to the withholding tax rate when selling a property in Malta, providing that the seller applies for the deduction. These circumstances include, but may not be limited to the following;

If the property is transferred before five years from the date of purchase.

• Should you decide to sell your immovable property within the first five years of purchase, the withholding tax will be reduced to 5%. This is providing that the property does not form part of a development project.
• As of the 20th of March 2020, the 5% final withholding tax will not apply if at any time during the five years an application for development permission was needed under the Development Planning Act.

If the property is transferred within three years from the date of purchase

• Should you decide to sell your property within the first three years of purchasing the property then the withholding tax will be reduced to 2%. This is providing that the property does not form part of a project and that you the seller declared on the original dead that the property was purchased for your sole ordinary residence.
• This is only applicable if the seller does not own any other residential property at the time of the sale.

If the property is situated in an urban conservation area and or scheduled by the Planning Authority in terms of article 81 of the Environment and Development Planning Act for restoration and, or rehabilitation and the application for the permit was filed with the Planning Authority on or after 1 January 2015

• Should you the seller be able to produce to the notary the MEPA certificate confirming that the restoration and rehabilitation works were completed in compliance with the relative permit then a withholding tax of 5% will apply.
• This is providing that this deduction has not already been applied for previously on the transfer of the same property.

If the seller purchased the property before the 1st of January 2004 and a notice of the promise of sale or transfer relating to the property was not given to the CfR before the 17th of November 2014 then the applicable withholding tax rate will be 10%.

• If the promise of sale or transfer relating to the property was given to the CfR before the 17th of November 2014 then the applicable withholding tax rate will be 12%.

When are you Exempt from Property Capital Gains Taxes in Malta?

There are some instances that will make the withholding tax null and void, these are but not limited to as follows;

If the property is transferred after three years from the date of purchase

• Should you sell your property after the first three years from the date of purchasing the property but within one year after vacating the property you will be exempt from paying withholding tax.

If the property is donated

• Should you the seller decide to donate your property to a spouse, descendants or other direct family members, then you will be exempt from paying withholding tax.

If the property is assigned

• Should the property be on assignment due to a separation or divorce then you will be exempt from paying withholding tax.

What are the Property Taxes on the Sale of Inherited Property in Malta?

Taxes related to selling an inherited property in Malta are subject to a number of conditions and circumstances;

If the property was inherited before the 25th of November 1992, then the withholding tax when selling the property will be equal to a final tax rate of 7% of the transfer value.

• This tax rate also applies if the property was inherited after this date, even when the transfer occurs through a judicial sale by auction.

If the property was inherited after the 25th of November 1992, then a 12% withholding tax is applicable. The 12% is charged on the difference between the transfer value and the cost of acquisition.

• This rule applies to inheritances executed after 24 November 1992. The same 12% rate also applies to properties received as a donation, provided the donation occurred more than five years before the date of transfer.

Procedures When Selling a Property in Malta

Selling your property in Malta begins with careful preparation. Sellers should gather all necessary documentation, including title deeds, permits, utility bills, and any prior energy performance certificates. Understanding the tax on property sales in Malta 2025 is essential, as it allows you to anticipate withholding tax obligations and other requirements. Early planning ensures a smoother process and positions you to sell your house efficiently without legal or financial complications.

Sellers should also consider the market conditions and timing when listing their property. Knowing local real estate trends, including the average duration to complete a property sale and what the demand for certain property types are, helps you make informed decisions. Partnering with a professional agency can provide guidance on these factors, ensuring that selling your property in Malta is both efficient and profitable.

Finally, preparation involves setting clear financial expectations. Sellers should estimate potential net proceeds after all expenses and taxes, including the tax on the sale of property in Malta, notary fees, and agency commissions. By understanding these elements, you can approach the sale confidently and make strategic decisions to maximise your return when you sell your property in Malta.

Listing Your Property for Sale

Listing your property for sale in Malta can be done either publicly or through an exclusive agreement with a real estate agency. Working with a professional agency such as Malta Sotheby’s International Realty provides access to both local and international buyers, increasing exposure and helping you sell your house faster. Exclusive listings offer privacy and targeted marketing to attract serious buyers while protecting your property’s value.

Agencies assist in creating high-quality marketing materials, including professional photography, virtual tours, and compelling property descriptions. These strategies are crucial in appealing to buyers and showcasing the best features of your property. When selling your property in Malta, using expert marketing can make a significant difference in both the speed and price of the sale.

Additionally, a real estate agency can guide you through the legal and financial aspects of the transaction. They help ensure that you comply with regulations, including tax on selling property in Malta, and coordinate communication with notaries, buyers, and other professionals. By leveraging their expertise, sellers can simplify the process and increase the likelihood of a successful sale.

Property Valuation

Property valuation is a critical step when preparing to sell your house in Malta. A professional valuation provides an accurate assessment of your property’s market value, ensuring your listing price is competitive and realistic. This attracts serious buyers, reduces prolonged negotiations, and helps avoid delays during the sales process.

Beyond setting the right price, an accurate valuation is essential for calculating taxes and estimating what your potential withholding tax on the sale of your property may be. Working with certified real estate agents who understand the local market ensures your valuation is reliable and credible.

Finally, a professional valuation adds trust and transparency to your listing. Buyers are more likely to take your property seriously, helping you sell confidently while optimising financial outcomes.

The Notary

The notary plays a central role when selling your property in Malta. They prepare and review all the legal documentation pertaining to your property sale and oversee the transfer of ownership of the property, whilst ensuring the sale process is compliant with Maltese property law - providing legal certainty for both buyer and seller.

Notaries also make sure all taxes, including withholding tax, are calculated and paid correctly, while managing the transfer of funds as a neutral party to avoid disputes. They guide sellers through the final stages of the sale, including the Promise of Sale and the Final Deed of Sale, reducing the risk of errors, delays, or legal issues. Partnering with a trusted notary ensures a smooth, legally secure, and efficient property sale in Malta.

Energy Performance Certificate (EPC)

Providing an Energy Performance Certificate (EPC) is mandatory when selling your property in Malta. The EPC, which must be presented to buyers before signing the Promise of Sale, indicates the energy efficiency of the home. Properties with higher efficiency ratings can attract more buyers, sell faster, and even support a higher sale price.

Sellers should ensure the EPC is up to date and accurately reflects the property’s energy usage. It not only demonstrates compliance with Maltese regulations but also helps buyers make informed decisions. Having a valid EPC readily available streamlines the sales process, enhances marketing appeal, and allows sellers to complete the transaction confidently.

Signing the Promise of Sale

The Promise of Sale is a legally binding agreement between the buyer and seller. It outlines the sale price, deposit, and completion timeline. The deposit secures the transaction and shows the buyer’s commitment, while understanding your tax obligations at this stage helps prevent surprises at the Final Deed of Sale. This agreement provides a clear legal framework, helping both parties avoid disputes and ensuring the sale proceeds smoothly under Maltese law.

Signing the Final Deed of Sale

The Final Deed of Sale completes the transfer of property ownership from seller to buyer. At this stage, the notary ensures all legal requirements are met, all taxes are paid, and sales proceeds are collected and properly distributed.

Sellers receive the remaining funds upon signing, with the notary providing security and oversight for both parties. The deed also provides legal confirmation of ownership, protecting the seller from future claims.

Expenses

Selling a property in Malta involves several expenses that sellers should plan for, including notary fees, agency commissions, legal fees, property valuations, and any applicable withholding tax. Working with a professional agency can help estimate expenses and integrate them into your overall sales strategy. Clear financial planning ensures sellers maximise their return, comply with Maltese regulations, and proceed with the sale confidently.

Navigating the sale of a property in Malta can be complex, with important considerations that need to be taken into account. Partnering with an experienced real estate agency ensures that every step, from accurate property valuations to signing of the final deed is handled professionally, efficiently, and in full compliance with Maltese law.

Partner with an accredited real estate agency such as Malta Sotheby’s International Realty to access unparalleled local expertise, an unrivalled global network and bespoke marketing strategies that maximise the value of your property. Our team guides you through the entire sales process with precision and care, helping you achieve a smooth and successful transaction.