For expats in Malta, the charming island of Gozo offers a compelling alternative for real estate investment and lifestyle. Known for its relaxed pace, breathtaking landscapes, and rich cultural heritage, this tiny island has become an increasingly attractive destination for those seeking a quieter lifestyle. Our guide explores real estate market in Gozo, investment opportunities, and key considerations for expats considering making the move.
Why Consider Gozo?
Gozo is a great option for expats who enjoy a more relaxed, rural lifestyle but still want access to modern amenities. The island is known for its beautiful coastline, charming buildings, and strong community spirit. It’s quieter and less crowded than Malta’s main island, but it’s becoming more popular with both locals and expats. This has made Gozo’s real estate market worth checking out.
Real Estate Market in Gozo – Overview
Pricing Trends
The real estate market in Gozo offers more affordable options compared to Malta’s main island. However, prices have been steadily rising due to growing demand. The island is particularly appealing to those interested in traditional Maltese houses, rustic farmhouses, and houses of character.
According to the Times of Malta, property prices in Gozo have seen significant growth in recent years. A 2021 report highlighted a 27.5% increase in townhouse prices compared to the previous year. Additionally, a 2023 study revealed that Gozo was the only region in Malta to witness an increase in asking prices per square metre across all property types, with apartment prices rising by 1.28%, more than double the increase observed in other regions. These trends underscore the strong demand for property in Gozo, driving its consistent price growth.
Types of Properties
Gozo features a diverse range of properties, from charming limestone-clad homes to modern apartments and new developments with contemporary amenities. Traditional homes often showcase spacious interiors and unique architectural features that set them apart from properties on Malta’s main island.
Rental Market
The rental real estate market in Gozo caters to expats, retirees, and remote workers, offering short- and long-term rental options. While rental prices remain generally lower than in Malta, demand has surged, particularly for properties near coastal areas or with scenic views.
According to an article in the Times of Malta in July 2023, renting in Gozo is generally more affordable than on mainland Malta. For instance, the average rent for a two-bedroom apartment in Gozo’s Rabat (Victoria) is around €579 per month, with Munxar being even more economical at approximately €495. However, from personal experience, it is now difficult to find an apartment in Victoria for less than €750, though this remains significantly cheaper than similar properties on the mainland. In popular mainland localities like St. Julian’s and Sliema, two-bedroom apartments command significantly higher rents, averaging €1,141 and €1,439 respectively. This disparity highlights Gozo as a cost-effective alternative for renters seeking more economical housing options within the Maltese archipelago.
Popular Areas for Expats
The most popular areas for expats in Gozo are:
Victoria (Ir-Rabat Għawdex), the island’s capital, is a hub of activity with shops, cafes, and cultural attractions, a great choice for those who want to have access to essential services.
Coastal villages like Xlendi and Marsalforn are popular for their scenic bays and coastside restaurants, promising a relaxed seaside lifestyle with options for holiday rentals and long-term accommodations. Although bear in mind that these locations become very busy with tourists in the summer
Qala and Nadur are perfect for winter walks. These areas offer stunning country views and a serene atmosphere, making them an ideal choice for nature lovers.
Investment Opportunities
The real estate market in Gozo presents promising investment potential. Its popularity among expats and locals has driven demand for rentals and holiday homes, especially during peak tourist seasons.
Investing in Gozo’s property market can yield attractive returns, with well-located and well-maintained properties offering rental yields of approximately 4% and capital appreciation of around 8% per annum. However, recent policy changes may influence future investment outcomes. The Maltese government has announced the termination of the reduced stamp duty scheme for Gozo properties, to stimulate economic activity (see below for more details.) This change could impact transaction costs and market dynamics, making it essential for investors to conduct thorough due diligence. Consulting local real estate experts is highly recommended to navigate the evolving market and optimise investment returns.
Short-Term Rent Demand
Short-term rentals in Gozo are very popular, especially in the summer when many tourists visit the beaches, festivals, and lively atmosphere. During this busy season, rental occupancy rates can go above 80%, providing property owners with good returns.
In the quieter winter months, demand comes mainly from retirees, remote workers, and visitors looking for a peaceful escape. While rental prices are usually lower in winter, the island’s mild weather and calm environment still attract many. This seasonal difference gives property owners the chance to rent to different types of guests all year round.
Considerations Before Buying or Renting
Property Regulations
Non-EU nationals face certain restrictions, such as the need for an Acquisition of Immovable Property (AIP) permit to purchase property in Gozo. Understanding these legal requirements is essential before proceeding with an investment.
Tax Relief and First-Time Buyer Benefits in Gozo
Gozo offers attractive tax incentives for property buyers, particularly for first-time buyers and those looking to invest in residential real estate. The Government of Malta offers several benefits that can make buying property on the island even more appealing.
First-Time Buyer Benefits
First-time buyers in Gozo can benefit from reduced stamp duty rates. Instead of the standard 5%, first-time buyers can enjoy a reduced rate of 2% on the purchase price of property, up to a certain value. This benefit can be particularly helpful for those starting their property journey in Malta.
In addition, properties under €200,000 are subject to more favourable tax conditions for owners, particularly when it comes to capital gains tax. The capital gains tax rate may be lower for such properties, depending on the holding period and other qualifying factors.
Read More: What You Should Know About Capital Gains Tax in Malta
Tax Relief on Property Investments
In addition to the reduced stamp duty for first-time buyers, there are also opportunities for tax relief for property investors, such as lower capital gains taxes on the sale of property in certain conditions. These benefits make Gozo an even more attractive option for expats and investors looking to settle or invest on the island.
Access to Amenities
While Gozo offers essential services, options for shopping, entertainment, and international schools are more limited than on Malta’s main island. Expats should evaluate if the quieter lifestyle aligns with their preferences and needs.
Transportation
Gozo is connected to Malta via ferry. Gozo Channel ferries are operating every day between Mġarr (Gozo) and Ċirkewwa (Malta), providing uninterrupted service throughout the day for both vehicle and passenger transportation. The journey typically takes 30 minutes, but if you are travelling to Gozo on a Friday evening or returning to the main land on a Sunday night expect to queue. Gozo is a very popular destination amongst the Maltese at the weekends.
The second option is the Fast Ferry – high-speed, passenger-only ferries that connect Gozo with Valletta, Malta’s capital city. While commutes between the islands are manageable, frequent travellers should account for the extra travel time involved.
Tips for Expats Interested in Real Estate Market in Gozo
- Research the Area: Spend time exploring different neighbourhoods to find the best fit for your lifestyle.
- Work with a Local Real Estate Agent: Local agents can provide invaluable insights into the market and guide you toward the best investment opportunities.
- Consider Future Development: Investigate upcoming projects to ensure the area maintains the character and tranquillity you desire.
Conclusion
The real estate market in Gozo offers a unique blend of affordability, charm, and solid investment potential. With growing demand and consistent property value appreciation, the island remains an attractive option for those seeking a family home, vacation property, or long-term investment. While recent policy changes, such as the end of reduced stamp duty incentives, may impact costs, Gozo’s steady rental yields and robust capital growth continue to make it a promising market. Whether you’re drawn by the island’s tranquil lifestyle or its evolving opportunities, now is an ideal moment to explore the possibilities on this Mediterranean island.
For personalized guidance and support, Expatax can help you navigate your journey to owning or renting a property in Gozo.
Sources
Government of Malta – Stamp Duty Information
Malta Financial Services Authority
Interesting Read:
Buying Property in Malta? Essential Contract Clauses to Safeguard Your Interests
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