A typical Malta street scene.

Owning property in Malta is becoming a reality for South Africans since the introduction of multiple-ownership in the country’s Special Designated Areas (SDAs), says Jenny Ellinas of Key Insight Solutions.

“There are six SDAs, each with its own appeal for investors including accessibility to beaches and the countryside, restaurants and shops, architecture, exceptional finishes and fixtures, and all the mod cons that come with living in a first world country,” she says.

“The ongoing costs of owning a property in Malta are very attractive: there are no annual rates, municipal contributions or any other expected payment due. The property registration process differs very slightly in Malta from South Africa, the main difference being the appointment of a notary to facilitate the registration and to ensure timeous payment of the various taxes and stamp duties to the authorities. The total fees amount to 10% of the purchase price.”

She says securing permanent residence is a relatively simple process. An applicant must prove either a nett worth of €349 000 or an annual income of €23 000; and once the permit has been obtained, the applicant must buy an apartment for at least €116 000, a house for €169 205, or sign a lease agreement for no less than €4 192 a year. At this stage a non-EU permanent resident will not be permitted to make application for citizenship (naturalization).

There are annual taxes of €4 200 due to keep the residency status valid; and an annual minimum remittance of income is also required. Permanent residents need to deposit €13 950 plus €2 300 for their spouses and each dependant into a Maltese bank account. There are no restrictions on the use of the funds once they have been remitted to Malta; and permanent residents may freely use this money for any purpose whatsoever.

Permanent residence permits need to be renewed annually, and unlike other countries which require minimum annual visits, Malta does not need residents to return every year to fulfil any prescribed time periods to retain residency status.

Because Malta is a full member of the Schengen Area Agreement, permanent residents are allowed free travel (with no border controls) to all member countries. Non-EU nationals will be allowed to stay a “short while” (normally three months) then will need to return to Malta. At the moment the UK, Ireland, Cyprus, Rumania and Bulgaria are not members of this area agreement, so their visa application processes will apply.

Malta is an EU country with a mild climate, set in crystal waters in the heart of the Mediterranean. It has a population of around 400 000 and the island has an area of just under 320 km².

The inhabitants have been influenced by many civilizations and cultural diversities over the centuries, all of which have left their stamp of architectural and artistic distinctiveness. The Order of the Knights of Saint John had 250 years of illustrious rule; and had a dramatic impact on the physical and political landscape of Malta. It was their urgency in protecting the island from attackers in the mid 1500s that resulted in many forts being built as well as new churches and palaces.

Malta now offers seasoned travellers a blend of the traditional and the cosmopolitan, with an impressive range of historical and cultural sites, together with a wide spectrum of outdoor activities.

“The four key points that make Malta attractive to South Africans are: the English-speaking population (official documentation is all in English); the high standard of living and safety factors; the climate with mild winters, pleasant springs and autumns and hot summers; and the favourable tax rates coupled with a double taxation treaty with South Africa.

“Malta, like the rest of the world, has experienced a slowdown in property growth. However, property prices have not reached double figure negative growth; and with the global recession on its last legs there is optimism for stability and possibly even growth this year,” says Ellinas.

“Tax is very favourable in Malta. There is no tax payable on worldwide wealth nor on any world wide income not remitted to Malta. There is also no inheritance tax and no wealth tax, however estate duty on immovable property is levied at 5% of the purchase price. For income remitted to Malta a flat rate of 15% applies. Capital gains tax is applicable if the resident hasn’t lived in the property for 183 days a year.”

She says securing employment in Malta is not possible at this stage. A permanent resident cannot be employed by a Maltese person or a Maltese registered company and cannot offer freelance services to Maltese persons or Maltese registered companies. However a permanent resident may use Malta as a base to work from, provided that he does not offer his services to locals. A permanent resident may also be employed by or offer freelance services to persons or companies outside Malta.

Call Jenny Ellinas on 083 448 8734, or email jenny@keyinsight.co.za.