Landlords in Malta can choose to pay a flat 15% final tax on the gross rent, instead of declaring the rent in their tax return at normal rates. The 15% is paid with Form TA24 by 30 April of the following year, and it is final: no expenses are deducted and nothing is refunded. Landlords who choose the 15% option and have a registered lease of two years or more can also claim a yearly rebate.
Under the Income Tax Act (Article 31D), rent from residential property can be taxed in one of two ways. The choice is made each year and then covers all qualifying rental income for that year.
| 15% final tax | Normal tax rates | |
|---|---|---|
| Taxed on | Gross rent | Net rent, after allowable expenses |
| Rate | 15%, final | Your progressive income tax rate |
| How it’s declared | Form TA24 (individuals resident in Malta file it on myTax); the rent is not entered in your tax return | In your income tax return |
| Deadline | 30 April of the year after the rent was received | With your tax return |
| Who can use it | Resident and non-resident individuals, and companies | Anyone |
Rent paid by a related party (for example a company you own or control more than 25% of) cannot be taxed at 15%. Rent that is not declared and comes to light in an investigation is taxed at 35% of the gross rent, plus interest and additional tax.
The long-lease rebate
If you choose the 15% option and the lease is registered with the Housing Authority as a long private residential lease of two years or more, you can claim a yearly tax rebate (Legal Notice 258 of 2020). Only the lease’s original length counts, not renewals.
| Original lease length | 1 bedroom | 2 bedrooms | 3 or more bedrooms |
|---|---|---|---|
| 2 years to under 3 years | €200 | €300 | €400 |
| 3 years or more | €300 | €400 | €500 |
The rebate is reduced pro rata in the years a lease starts and ends, and it can’t exceed 15% of the rent from that lease.
Separately from tax, the Private Residential Leases Act requires the landlord to register every long let with the Housing Authority within 30 days of the lease starting. Your accountant can tell you which option pays less in your situation.
Sources
Reviewed by Yusef Dwah