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How to Retire in Malta: Costs, Visas and More

Ashley Chorpenning
An aerial view of Sliema, Malta, at dusk

Malta is a small five-island archipelago 100 miles south of Sicily, Italy. This Mediterranean nation and European Union member offers spectacular cities and crystal-clear waters. It’s no wonder retirees are flocking to this destination. But before you move thousands of miles, you should understand what it entails to retire in Malta. From the cost of living to healthcare to taxes, here’s a breakdown of what you can expect when retiring in Malta.

Getting a Malta Visa

The best visa for retirees to get is the Maltese permanent residence permit. It allows you to live but not work in the country. This means that you may collect retirement income at home, but not work in retirement in Malta.

The requirements for the Maltese permanent residence permit include the following:

  • Have a net worth of at least $39,5127.33 or earn an annual income of at least $26,039
  • Provide a clean criminal record
  • Go through an interview process

Once you receive permanent residence, you must either purchase a house worth at least $132,463 or an apartment worth at least $79,251. If you cannot purchase a home, permanent residents must pay at least $4,698 in annual rent. Recipients of the permanent residence permit must also open a Maltese bank account.

Cost of Living in Malta

It’s vital to your retirement success in Malta that you understand the cost of living. The cost of living is important because it will allow you to live the lifestyle you want in retirement. Fortunately, the cost of living is about 4% lower than in the U.S., excluding rent, according to Numbeo.com. Rent is about 24% lower in Malta, on average, than in the U.S.

In the U.S., the national average cost for a one-bedroom apartment in a city is $1,360.89. In Malta, the national average cost for a one-bedroom apartment in a city is $970.51. One of the most popular cities in Malta for expatriates is Sliema. You can get a one-bedroom apartment in the Sliema city center for approximately $1,000. By comparison, in Tampa, Florida – an American city popular with retirees – you can get a one-bedroom apartment for $1431.75 in the city center.

Housing in Malta

The world famous Azure Window inMalta's Gozo Island

If you are considering a move to Malta, it’s important to understand the home buying process and what’s involved. The first thing to know is that non-EU citizens must obtain an Acquisition of Immovable Property (AIP) Permit from the Ministry of Finance. This process typically takes about three months.

A notary public is necessary and will lodge the AIP on your behalf and can assist in many other aspects of purchasing a home.

The AIP permit will only allow you to purchase one residential property with the intent to be used by you and your family. There are districts called Portomaso, Tigne Project, Cottonera Waterfront, and Charmai on the island of Gozo in which people can purchase more than one property.

Once you have chosen a notary public and have found a property that you want to buy, the next step is to contact the seller or real estate agent to make an offer. Then, your notary will draw up a purchase agreement. Finally, both the buyer and seller agree on all the terms and sign the document.

The purchase agreement is good for three months. During these few months, the notary will submit all the necessary paperwork and check the background of the property. When all their work is finished, they will prepare the final deed. Both parties will also sign this document. The balance due on the home and stamp tax will be paid at this time.

The buyer is expected to pay 10% of the property’s value at the time of signing. A 1% stamp tax will also be given to the notary public, who will, in turn, pay the commissioner of Inland Revenue. Once all the fees are paid and documents are signed, the home buying process is complete.

Taxes in Malta

When living in Malta, foreigners are only subject to taxes on two types of income. These types are capital gains and income you earn from Maltese sources. Therefore, if you work in Malta, you will be taxed on the income. Additionally, if you sell a property for a gain, you will be taxed on that income as well.

As a U.S. resident, you will be expected to file taxes in the United States each year. You will have to report any foreign bank accounts as well, and as a resident of Malta, you will have to have a Maltese bank account. If you earn any money outside of the U.S., you can use a few different provisions to reduce your U.S. taxable income. These include the foreign earned income exclusion, the foreign tax credit and the foreign housing exclusion, among others. If you’d like to forecast your tax burden more specifically, you may want to consult with a tax expert who is familiar with both U.S. and Maltese tax laws.

Healthcare in Malta

Malta has both a publicly funded funded healthcare system and private facilities. The public healthcare system is subsidized by the government and is often referred to as the government healthcare service.

The public healthcare system is free. In many countries, people choose to use the private healthcare systems because the quality of care is much higher. However, Malta was ranked the fifth best health system in the world by the World Health Organization. In comparison, the United States came in 37th.

People in Malta have access to free primary and emergency care regardless of if the people have state health insurance. Residents have lifetime healthcare rights. If you choose to buy a private healthcare insurance plan, you can expect premiums to be less than $100 per month. Some services will cost you out of pocket. These costs include a private specialist visit at about $65, lab work costs about $30, and an MRI costs upwards of $200. These costs are significantly less than in the United States.

Safety in Malta

Malta is one of the safest countries in Europe. Personal crimes such as robberies or attacks are very low but are more popular in busy areas such as on buses. Malta’s roads are notoriously in poor condition and there were 18 traffic deaths in Malta in 2018. As an island country, the beaches are patrolled by lifeguards, thus preventing water-related deaths as well.

The Bottom Line

Malta is not only safe but provides warm weather and the stability of the European Union. From diving to beaches, UNESCO World Heritage Sites to modern art, Malta seems to have it all. Malta has an overall low cost of living and very few barriers to residency for U.S. citizens. Ultimately, Malta is a great retirement option for Americans.

Tips for Achieving Your Retirement Goals

  • Consider talking to a financial advisor about about whether you’re financially prepared to retire outside the United States. Finding the right financial advisor that fits your needs doesn’t have to be hard. SmartAsset’s free tool matches you with financial advisors in your area in 5 minutes. If you’re ready to be matched with local advisors that will help you achieve your financial goals, get started now.
  • It’s tough to plan for your retirement if you aren’t sure what kind of costs you’ll have when you retire. To get an idea of what to expect, use this retirement calculator. You’ll need a few details about where you want to retire, when you want to retire and how much you have in savings.

Photo credit: ©iStock.com/rusm, ©iStock.com/ViewApart, ©iStock.com/liseykina

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