Malta Rental Income Guide 2026

Overview — Taxation of Rental Income

Rental income earned from immovable property situated in Malta is subject to income tax. For individual landlords, rental income is aggregated with other sources of income and taxed at the progressive IIT rates (0-35%). For corporate landlords, rental income is subject to the standard 35% CIT. The tax year is the calendar year, and rental income must be declared on the annual tax return.

Allowable Deductions

Landlords may deduct allowable expenses incurred in earning the rental income. Common deductible expenses include:

• Maintenance and repairs: Costs of keeping the property in a habitable condition
• Insurance premiums: Building and contents insurance for the rental property
• Loan interest: Interest on mortgages or loans used to acquire or improve the rental property
• Property management fees: Fees paid to letting agents or property managers
• Utilities: Water, electricity, and other utilities if paid by the landlord
• Depreciation: Wear and tear on furniture and fixtures in furnished lettings

Expenses must be wholly and exclusively incurred for the purpose of earning rental income. Capital improvements are not deductible but may be added to the cost basis for capital gains purposes.

Non-Resident Landlords

Non-resident landlords are subject to tax on gross rental income from Maltese property at the standard progressive IIT rates (0-35%) applied to their Malta-source income. Non-residents are not entitled to the personal allowance (EUR 9,700 tax-free threshold). The tenant or letting agent is generally required to withhold tax at source (20% of gross rent) and remit it to the CFR. The non-resident landlord must file a tax return and may claim a refund if the withholding exceeds the final tax liability, or pay additional tax if it is insufficient.

Short-Term and Holiday Lets

Income from short-term holiday lets (Airbnb, booking.com, etc.) is treated as business income in most cases. Landlords operating short-term lets must register with the Malta Tourism Authority and are subject to VAT registration if turnover exceeds the threshold. The income is taxed as trading income rather than rental income, which may affect allowable deductions and loss relief.

FAQs

Is rental income subject to social security contributions?

No, rental income from property is not subject to social security contributions. Only earned income (employment and self-employment) attracts Class 1 or Class 2 social security contributions.

Can I offset rental losses against other income?

Yes, if allowable expenses exceed rental income, the resulting loss can generally be offset against other income in the same tax year, provided the letting is on a commercial basis. Losses may also be carried forward to future years.

Disclaimer

This guide provides general information about the taxation of rental income in Malta for the 2026 tax year. Tax laws may change. Always consult with a qualified Maltese tax advisor or the CFR directly for advice specific to your situation. InvestmentKit does not provide tax advice.