Malta for US citizens

Country Facts & Figures

Approximate Living Expenses Malta?

Travel requirements for a US citizen to travel to Malta?

U.S. citizens traveling to Malta for tourism or business purposes needed to meet specific requirements. However, please note that travel restrictions and requirements are dynamic and may change based on the evolving situation with the COVID-19 pandemic or other factors.

Here were the general travel requirements:

Passport: A valid passport with at least six months’ validity beyond the planned date of departure from the Schengen area.

Schengen Visa: For short stays of up to 90 days within a 180-day period, U.S. citizens do not need a visa for tourist or business travel to Malta. For longer stays or different purposes, such as work or study, a visa or residence permit might be required.

COVID-19 Restrictions: Due to the pandemic, Malta had implemented specific entry requirements, including:

• Negative PCR test results taken within a certain time frame before arrival.
• Quarantine measures, either mandatory or recommended.
• Health declaration forms or passenger locator forms.
• Proof of vaccination in some cases.

Proof of Accommodation: You might be required to provide proof of your accommodations (hotel reservation or invitation from a host).

Proof of Sufficient Funds: While it’s not always checked rigorously, technically, travelers should have proof that they have sufficient funds to support themselves during their stay. This could be in the form of bank statements, cash, or credit cards.

Travel Insurance: It’s recommended (and sometimes required) to have travel insurance covering medical emergencies, especially if your health insurance does not provide coverage abroad.

Return or Onward Ticket: Some airlines or immigration officials might ask for proof of a return or onward ticket.

Again, travel requirements can change, and it’s essential to check with the Embassy of Malta or the official Maltese immigration website for the most up-to-date information before planning your trip. Additionally, your airline may have further requirements or information regarding your travel to Malta.

Buying property in Malta as a US citizen?

Buying property in Malta as a U.S. citizen involves navigating certain regulations and procedures. Malta has specific zones where non-residents can purchase properties without obtaining a permit, but for properties outside these areas, an Acquisition of Immovable Property (AIP) permit is required. Here’s an overview of the process and some things to consider:

Acquisition of Immovable Property (AIP) Permit: If you are buying property outside of the designated zones (like Special Designated Areas), you would need to apply for an AIP permit from the Ministry of Finance. This permit is usually granted if the property is being acquired for the buyer’s personal use and not for rental or any form of business activity.

Special Designated Areas: There are specific areas in Malta where foreigners can buy more than one property and can rent them out without the need to get any special licenses. These areas are usually high-end developments and include places like Portomaso, Tigné Point, and others.

Price Thresholds: There’s a minimum property value that non-residents must meet to buy property in Malta. This threshold varies depending on the property’s location and type. Make sure to check the current thresholds, as they are periodically adjusted.

Notary: When you decide to purchase a property, you’ll need a notary. The notary conducts searches to ensure there are no debts or outstanding dues on the property. They also draft the final deed of sale. It’s crucial to have a trusted notary as they play a significant role in ensuring the legality of the transaction.

Preliminary Agreement: Before the final sale, a preliminary agreement (known as “konvenju”) is signed between the buyer and seller. This agreement binds both parties to the sale at an agreed-upon price. Typically, a 10% deposit is paid at this stage.

Final Deed: After the notary completes the searches (which usually takes around three months), the final deed of sale is signed, and the balance of the purchase price is paid.

Taxes and Fees:

• Stamp Duty: This is a tax on property purchases. The buyer typically pays a 5% stamp duty on the property’s value, though there were occasional government schemes or incentives that might alter this rate.
• Notary Fees: These are also paid by the buyer and are typically around 1% of the property price, though this can vary.
• Agency Fees: If you use a real estate agent, their fees (often 5% of the purchase price) are usually shared between the buyer and seller.

• Financing: Some banks in Malta offer mortgages to non-residents, but the terms and conditions might differ from those offered to residents. It’s advisable to discuss your options with a bank or financial consultant in Malta.Legal Counsel: It’s often recommended to hire a lawyer who can guide you through the process and ensure that your interests are protected, especially if you’re unfamiliar with Maltese property law.Residency and Tax Implications: Purchasing property can have implications on your tax status and residency rights. You might want to consider consulting a tax expert or lawyer in Malta to understand these implications better.Always keep in mind that while Malta is part of the European Union, it has its own specific rules and regulations concerning property acquisition by foreigners. Ensure you are well-informed and preferably seek advice from professionals in the field before making any decisions.

Golden Visa Program in Malta – Road to Residency & Citizenship?

Malta’s Golden Visa program is a part of the country’s broader initiative to attract foreign investment and high net worth individuals. Over the years, Malta has provided different programs and pathways for individuals interested in obtaining residency or citizenship in exchange for significant financial contributions or investments in the country. Here’s a breakdown of Malta’s primary programs:

 Malta Permanent Residence Programme (MPRP): This program offers non-EU/EEA/Swiss nationals the possibility of obtaining permanent residency in Malta through a combination of investments and contributions.

Requirements generally include:

• Purchase of property with a minimum value (typically starting from €300,000 if situated in Gozo or the South of Malta, or from €350,000 if located elsewhere in Malta). The property cannot be let or sublet.

OR

Renting a property for at least €10,000 per annum in Gozo or the South of Malta, or €12,000 per annum in other parts of Malta.

• A donation to a registered philanthropic, cultural, sport, scientific, animal welfare, or artistic non-governmental organization or society, as approved by the Community Malta Agency, of at least €10,000.
• An investment in government bonds or equities for a determined amount, to be retained for a minimum period.
• Proof of regular income or capital sufficient to maintain oneself and dependents without recourse to the Maltese social assistance system.

Malta Citizenship by Naturalization for Exceptional Services by Direct Investment (MEIN): Introduced in 2020, this program replaced the previous Individual Investor Program (IIP). It provides a path to citizenship for applicants and their dependents after a residency period, given they meet all the requirements and pass rigorous due diligence checks.

Requirements generally include:

• Residing in Malta for a minimum period (which can be 12 or 36 months based on the financial contribution).
• A non-refundable contribution to the Maltese government.
• Investment in property (either purchasing or renting, with minimum values similar to the MPRP).
• Other potential requirements, such as investments in stocks or bonds, and philanthropic donations.

Due Diligence: For both programs, Malta has a rigorous due diligence process. Applicants are thoroughly screened, and their sources of wealth are verified. This is to ensure that only individuals with a clean background can benefit from these programs.

Benefits:

• Visa-free or visa-on-arrival access to numerous countries, especially for Maltese citizens.
• Right to live, work, and study in any European Union country (for Maltese citizens).
• Favorable tax regime in Malta.
• Safe living environment and high quality of life.

Caveats:

• The Maltese government periodically reviews and modifies these programs. It’s crucial to ensure you have the latest and most accurate information before proceeding.
• Engaging a licensed agency or legal professional familiar with Maltese investment programs can help guide the process and ensure all requirements are met.

If considering participation in either of these programs, always ensure you work with licensed professionals and conduct thorough research to make an informed decision.

Mortgage/Financing of Property in Malta for a US Citizen?

Getting a mortgage or financing for property in Malta as a U.S. citizen (or any non-resident) is feasible, but it might come with certain conditions and nuances compared to what residents face. Here’s what you need to know:

Eligibility: While Maltese banks are generally open to lending to foreigners, they may impose stricter conditions. The individual’s financial status, credit history, the type of property being financed, and its intended use (primary residence, holiday home, rental, etc.) are all factors that can influence eligibility.

Loan-to-Value (LTV) Ratio: Typically, Maltese banks offer an LTV ratio of around 70-80% for residents. For foreigners, this might be lower. That means you would typically need to provide a higher down payment – potentially around 30-40% of the property’s value.

Documentation: Expect to provide various documents, including:

• Proof of identity (passport, driver’s license).
• Proof of income (salary slips, tax returns, employment contract).
• Bank statements.
• Details about any existing debts or financial obligations.
• A valuation of the property you intend to buy (this is usually carried out by a bank-appointed surveyor).

Interest Rates: As with any mortgage, interest rates can vary based on the loan’s duration, the type of interest (fixed or variable), and the bank’s policies. It’s advisable to shop around and negotiate to find the best deal.

Terms of Mortgage: Mortgages in Malta generally have a term of up to 40 years or until the borrower reaches a certain age (often 65 to 70 years), whichever comes first.

Additional Costs: Remember to account for other costs associated with buying a property and obtaining a mortgage:

• Notary fees.
• Stamp duty.
• Bank charges.
• Property valuation fees.
• Potential life insurance or mortgage protection policy, which might be required by the bank.

Special Considerations for U.S. Citizens: Due to the Foreign Account Tax Compliance Act (FATCA), U.S. citizens have to report overseas financial accounts to the IRS. Some banks might also be wary of the administrative overhead associated with FATCA compliance. Make sure you understand your tax obligations and any additional paperwork required by the bank.

Professional Guidance: Engaging with a mortgage broker or financial advisor familiar with the Maltese property market can be helpful. They can provide guidance tailored to your specific situation and might have contacts with multiple banks, potentially getting you a better deal.

Finally, always ensure that you fully understand the terms and conditions of any mortgage agreement before signing.

Rental Income Potential in Malta?

The potential for rental income in Malta can be influenced by various factors, including the property’s location, type, condition, and the state of the property market at any given time. Here are some general insights and considerations regarding rental income in Malta:

Location Matters:

• Touristic areas: Properties in touristic zones like Sliema, St. Julian’s, Valletta, and the surrounding areas generally attract higher rents due to their proximity to entertainment venues, restaurants, and the seafront.
• Central areas: Central regions like Birkirkara, Msida, and Gzira can also command decent rents, especially given their convenience for locals and expats working in Malta.
• Quiet & upscale areas: Mellieha, Madliena, and Gozo can be attractive for those looking for tranquil settings or luxury properties.

Type of Property:

• Apartments: These are the most common rental properties in Malta. Modern, well-furnished apartments in good locations can command decent rental prices.
• Maisonettes & Penthouses: These often fetch higher rents, especially if they come with amenities like terraces or views.
• Houses of Character & Villas: These can be in high demand, especially in areas like Mdina or the Three Cities. They can fetch premium rents, particularly if they are well-maintained and modernized.

Seasonal Variations:

• Touristic areas might see seasonal fluctuations in demand, with higher rents achievable during the tourist season.
• The influx of expatriates and foreign workers can also influence demand in certain areas, potentially stabilizing rental income throughout the year.

Economic and Market Factors:

• The presence of gaming, financial, and tech companies in Malta has driven the demand for rental properties, especially in the central and northern areas.University students, especially international ones, can boost demand in areas close to the University of Malta.

Long-term vs. Short-term Rentals:

• Short-term rentals or holiday lets can be lucrative, especially in tourist areas, but they require more hands-on management.
• Long-term rentals can provide stable, continuous income with less day-to-day management.

Regulations:

• Ensure you’re familiar with Maltese regulations regarding rentals. For instance, short-term rentals might require specific licenses. There are also regulations around tax on rental income.

Potential Yield:

• Rental yields can vary, but as a ballpark, you might expect gross yields of around 4-6% annually, depending on the factors mentioned above.

Challenges:

• Like any property market, there are challenges. Maintenance costs, periods of vacancy, and dealing with tenants can impact the net rental income.
• It’s also essential to keep in mind the broader property market’s health. A saturated rental market or economic downturn can affect rental income potential.

If you’re considering investing in Maltese property for rental income, it’s wise to engage local real estate professionals. They can provide specific insights tailored to your investment goals and up-to-date market conditions.