Key facts
- Flat-rate option
- 15% of gross rent
- Deductions under 15%
- None
- Residential since
- 1 January 2014
- Commercial since
- 1 January 2016
- Related-party rent
- Excluded from 15%
- Long lease rebate
- Available (≥ 2-year registered lease)
Rental income from property in Malta is taxable — and landlords have a genuine choice about how. You can pay a flat 15% on the gross rent, with no deductions and no further tax, or you can declare the net rent (after allowable expenses) and pay the ordinary progressive rates.
The 15% flat rate
Introduced for residential lettings from 1 January 2014 and extended to commercial lettings from 1 January 2016, the 15% option is the method most private landlords use because it is simple:
- It is charged on the gross rent received.
- It is final — nothing more is due on that income, and nothing is refunded.
- No expenses can be deducted: not maintenance, not agency fees, not loan interest.
- It does not apply to rent paid by related parties.
- If you choose it for a year, it applies to all your qualifying rental income for that year.
Tax is paid annually, with a simplified return.
The ordinary rates on net income
Alternatively, you add your net rental income to your other income and pay tax at the normal progressive rates. This can be better when:
- your other income is low, so the rent falls into lower bands;
- your expenses are high — for example significant repairs in a given year;
- the property is let at a modest rent relative to its costs.
Which method is better? A simple example
Consider a Sliema apartment let for €24,000 a year.
| 15% method | Ordinary rates | |
|---|---|---|
| Gross rent | €24,000 | €24,000 |
| Deductible expenses | not allowed | e.g. €5,000 |
| Taxable amount | €24,000 | €19,000 plus your other income |
| Tax on the rent | €3,600 | depends on your marginal rate |
For a landlord already paying tax at a high marginal rate, 15% of gross is usually cheaper and far simpler. For someone with little other income, the ordinary rates may cost less. Your accountant can run both calculations before you file.
The long-lease rebate
Malta encourages longer, registered lettings. If you let a home on a long private residential lease of at least two years, register it with the Housing Authority and opt for the 15% method, you may be entitled to an annual tax rebate. Registration is also a legal requirement for residential leases — see letting your property in Malta.
Short lets
Holiday and short-let accommodation must be licensed by the Malta Tourism Authority before it operates, and the tax treatment can differ where hotel-like services are provided. Read short-let licensing in Malta before listing a property on a booking platform.
Non-resident landlords
Rent from Maltese property is taxable in Malta whether you live here or abroad. The 15% option is available to non-residents too. Your country of residence may also tax the income, with credit for Maltese tax under any applicable treaty.
