Income tax on rental income from immovable property in Malta is subject to specific rules that landlords must carefully follow. Whether renting residential or commercial property, both resident and non-resident individuals may benefit from a 15% final tax regime, provided certain conditions are met.
Understanding how this regime works, including filing requirements and potential tax rebates for registered long-term leases, is essential for ensuring compliance and managing overall tax exposure.
The 15% Final Tax on Rental Income
Long-term rentals, typically residential leases exceeding six months, are considered investment income and fall under Article 4(1)(e) of the Income Tax Act (ITA). This classification is important, as it determines how rental income is reported and taxed in Malta.
Income derived from the long-term rental of immovable property situated in Malta, whether residential or commercial, is generally subject to a final withholding tax of 15%.
This tax applies to gross rental income, meaning that no deductions for expenses are allowed. Therefore it applies to residents and non-residents, individuals and companies. Furthermore, the tax is considered final, meaning that no further tax is due on that income when properly declared.
This regime is widely used due to its simplicity and relatively low tax rate.
TA24 Filing and Payment Deadline
The 15% tax is declared and paid through the TA24 form, which must be submitted annually.
- Deadline: 30 April of the year following the income year
- Example: Rental income earned in 2025 must be declared by 30 April 2026
Failure to submit the TA24 on time may result in interest and penalties.
Housing Authority Registration and Tax Rebates
A key development introduced in 2020 is the incentive for long-term residential leases registered with the Housing Authority. To qualify for a tax rebate, the following conditions must be met.
The lease must be:
- Residential
- Registered with the Housing Authority
- For a duration of 2 years or more
- Tax must be paid under the 15% TA24 regime
Available Tax Rebates
The rebate depends on the duration of the lease and the number of bedrooms:
| Lease Duration | 1 Bed | 2 Bed | 3+ Bed |
| 2-3 years | €200 | €300 | €400 |
| 3+ years | €300 | €400 | €500 |
The rebate is claimed through the TA24 form and its capped at 15% of the rental income. This effectively reduces the overall tax burden and incentivises longer-term rental stability.
Alternative Tax Treatment: 35% Standard Tax
The 15% final tax regime is optional rather than mandatory. If a landlord does not opt for this treatment, rental income must instead be declared in the annual income tax return and will be subject to standard tax rates. For individuals, this means progressive income tax rates, while companies are generally taxed at 35%. Under this method, certain expenses such as loan interest and maintenance costs may be deducted.
However, depending on the level of income and deductions available, the overall tax liability may be significantly higher compared to the 15% final tax regime.
Consequences of Non-Compliance
Failure to properly declare rental income or to comply with the applicable tax obligations may result in significant financial consequences. Landlords may lose the ability to benefit from the 15% final tax regime, with the income instead becoming subject to higher standard tax rates of up to 35%. In addition, late or incorrect filings can trigger interest charges and administrative penalties. Ensuring timely submission of the TA24 form and correct reporting of rental income is therefore essential to avoid unnecessary exposure and remain compliant with Maltese tax regulations.
Final Thoughts
Malta’s rental income tax framework offers flexibility but requires careful compliance. The 15% final tax regime remains the most straightforward option for many landlords, particularly when combined with available rebates for long-term registered leases. Each case should be assessed individually to ensure the most efficient tax treatment.
With increasing regulatory oversight and reporting requirements, landlords can no longer afford to treat rental income as a passive matter. Staying informed, structuring leases correctly, and meeting filing obligations on time are essential to avoiding unnecessary costs and ensuring peace of mind.
Disclaimer
Expatax Malta is here to support you. We work closely with certified tax professionals to ensure your rental income is structured correctly, fully compliant, and optimised from a tax perspective.
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