Are you considering renting out your apartment or house in Malta? Thanks to the current booming economy and increasing demand for quality properties, there has never been a better time to invest in buy-to-let properties.
If you do invest in a rental property, it is important that you also take into consideration the legal requirements, in terms of Licences, VAT, Tax implications and EPC. The following information should help regarding legal requirements, however, please always refer to the respective authorities, Email or Contact us for more details.
Owner/Landlords have two options of what tax procedure to follow:
Owners of more than one property must tax all the properties at the same option.
Holiday rentals refer to the rental of a property for short periods, usually for furnished premises for any period less than 6 months. In such instances, tax is payable on the net rental income. This is determined after deducting any expense incurred in the production of income derived from such activity, given that upon demand, the taxpayer would be in a position to present to the Inland Revenue Authorities supporting documentation. Deductible expenses include amongst others, license fees, ground rent payable on the property, as well as renovation and maintenance costs.
Tax is payable according to the tax progressive rates applicable to the individual. One may also qualify for a preferential rate of 15%, applicable on rental income up to
€12,000, with any additional rental income being charged according to the tax progressive rates.
Owner/Landlords in Malta are not required to charge VAT. Exceptions to this rule include:
The process to obtain this license is a simple one, which would also require that a representative from MTA visits the property to vet its conformance to standards. Subject to fulfilling the quality requisites, the license will be issued at a nominal fee. The landlords are normally also required to be VAT registered, bar some exceptions:
The above-mentioned information should help, however, please always refer to the respective authorities for clarification on legal requirements, or contact a member of our property letting team for more details.
An EPC is required whenever a property is built, sold or rented out. Only qualified and registered assessors may prepare an EPC.
The purpose of an EPC is to provide information on a property’s energy use and typical energy costs and to make recommendations about how to reduce energy usage and increase efficiency.
It is the responsibility of a Landlord or vendor to arrange an EPC to give to prospective buyers or show to tenants.
An EPC Report typically costs between €200-€350 Euros depending on the service provider. This includes the BRO (Building Regulations Office) fee for registering the Certificate. EPC’s are valid for 10 years.