Malta’s 2025 Budget: New Property Incentives and Extended Schemes to Boost the Real Estate Market

The 2025 budget release brings encouraging updates for Malta’s property market. Finance Minister Clyde Caruana has introduced new initiatives and expanded existing schemes to support buyers, sellers, and property investors.

With Malta’s economy projecting an estimated growth of 4.9% in 2024 and 4.3% in 2025, the 2025 Malta budget updates will prove advantageous to the private property market, which has continued to grow year on year.

As part of the 2025 budget, a new scheme will help residential property owners redeem temporary emphyteusis contracts, with expanded eligibility for current and previous schemes. The introduction of this scheme will provide families and individuals with more flexibility, enabling them to secure full ownership of their homes.

To incentivize the purchase of older properties, the government has extended previously introduced measures for first-time buyers who purchase properties within an Urban Conservation Area (UCA) that were built over 20 years ago and have been vacant for more than seven years. Individuals who qualify for this grant will receive €15,000 if the property is situated in Malta or €40,000 if the property is located in Gozo.

The first-time buyer’s grant scheme has also been extended, which entitles first-time buyers to a €10,000 grant spread out over 10 years should they purchase a property that does not exceed €500,000. In addition, first-time buyers and second-time buyers can also enjoy a reduced stamp duty on the first €200,000 of the value of the property, provided that the property will be used as their primary address.

The first-time buyers VAT Refund scheme, which offers VAT refunds to first-time buyers who build or renovate their homes, has also been extended and amended so that it may be as beneficial to single individuals as it is for married persons.

Similarly, current and prospective owners can benefit from a VAT refund of up to €54,000 on the first €300,000 spent on refurbishment works on qualifying properties. These properties should be privately owned residential properties that;

- are located in UCA areas, or

- were built more than 20 years ago and have been vacant for more than seven years or

- are newly built using traditional architecture.

These measures will support the preservation of Malta’s historic architecture and encourage sustainable investment.

Minister Clyde Caruana also highlighted a stamp duty refund for sellers. Individuals who sell their home to acquire another residence are eligible for a stamp duty refund of up to €3,000, provided that they own no other property at the time.

Regulations regarding Capital Gains Tax Duty were also highlighted whereby buyers who purchase a property that;

- was built over 20 years ago & has been vacant for more than 7 years, or

- is situated in an Urban Conservation Area (UCA) or

- is newly built using traditional architecture,

can benefit from an exemption on capital gains tax and stamp duty on the first €750,000 of the property value.

Further budget measures included removing the succession tax on leased agricultural land. This is an effort to reform the agricultural sector by simplifying inheritance processes and supporting families within the farming community, enhancing the sector’s long-term viability.

Further supporting sustainability, the Building and Construction Authority will introduce new initiatives regarding energy-efficient renovations for low-income homeowners. The initiatives will make energy-saving home improvements more accessible and affordable to low-income property owners.

Find out how you can benefit from these budget measures by contacting Malta Sotheby’s International Realty on +356 2010 8077/8070, viewing our website at www.maltasothebysrealty.com, or visiting our offices located on the Portomaso Marina and the Tigne Point Pjazza to start your property journey.

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