Stamp duty on a Malta property: the rates, the reliefs, and when it is paid

Most people buying in Malta budget two numbers: the price of the property and the cost of finishing it. Both are large, and in a shell purchase the second one is often a guess at the point the first one is agreed. Duty on documents is the third number, it is not small, and — this is the part that catches people — a fifth of it falls due when the promise of sale is signed and notified, not at the final deed. That is typically months before you have a kitchen quote, and it comes out of the same pot of cash as the fit-out.

This article sets out what the Duty on Documents and Transfers Act (Chapter 364) and L.N. 305 of 2025 actually say. It is not tax advice, and the figure that ends up on your deed is computed by your notary, who is the person who applies these rules to your facts.

The standard rate

Article 32(1) charges duty at the rate of 5 euro for every 100 euro on a transfer of immovable property.

The base matters as much as the rate. The duty is charged on the amount or value of the consideration, or on the value of the property, whichever is the higher. A price written low on the deed does not produce a low duty bill if the value is higher. For a shell apartment this is worth understanding early: you are being charged on the property as transferred, and the finishing you add afterwards is not part of that transfer document.

At 5 euro per 100, the arithmetic is straightforward — on the first €200,000 of a transfer, the standard charge works out at €10,000. Your actual total depends on the whole base, and the notary computes it.

The reduced rate for a sole ordinary residence

Article 32(4)(a) provides a reduced rate of 3.50 euro for every 100 euro on the first €200,000 of the aggregate value, where the property is acquired by a person for the purpose of establishing therein his sole ordinary residence, and where that person does not require a permit under the law regulating the acquisition of immovable property by non-residents.

On that first €200,000 slice, 3.50 per 100 produces €7,000 instead of €10,000 — a difference of €3,000 against the standard rate. Value above the €200,000 threshold is not covered by the reduced rate.

Where a buyer acquires an undivided share rather than the whole property, article 32(4)(c) applies the benefit proportionally. Article 32(4)(e) allows a garage to be treated as forming part of the residence, within the limits that paragraph sets.

Who is excluded from the reduced rate

Two exclusions in the Act are the ones that most often surprise foreign buyers.

Special designated areas. The proviso to article 32(4)(a) withholds the reduced rate from a person who would have required a permit under the non-residents acquisition law but for the fact that the property is situated in a special designated area. In plain terms: buying in an SDA removes the permit obstacle, but it does not hand you the reduced duty rate. A British or other non-Maltese buyer who chooses an SDA development precisely because it is open to them should assume the standard 5 euro per 100 applies unless their notary advises otherwise.

You already used this relief. Article 32(4)(d) withholds the benefit from a person who already owns immovable property in respect of which the same relief had been claimed. The Act requires a declaration by the buyer in the deed, recorded by the notary.

The exemption on the first €200,000, from 28 October 2025

L.N. 305 of 2025 goes further for buyers who have never acquired residential property before.

For transfers made on or after 28 October 2025 that qualify under article 32(4)(a), no duty is chargeable on the first €200,000 of the aggregate value, provided the buyer has made no previous inter vivos acquisition of residential property. "Residential property" for this purpose includes land or airspace acquired for the purpose of building a residence on it — so a plot bought years ago and never built on will count against you.

Two mechanics matter:

• The buyer must declare in the deed that the conditions are satisfied, and legal evidence supporting the declaration must be produced to the Commissioner.
• A previous undivided share of less than 25% of the value of a residential property is disregarded, unless the relief had already been granted in respect of that share.

The effect on the first €200,000 is nil duty instead of €10,000 at the standard rate, or instead of €7,000 at the 3.50 rate. Note that the exemption sits on top of article 32(4)(a): if you fail the sole-ordinary-residence test, or you are caught by the SDA proviso, you do not reach the exemption at all. Note also that the Legal Notice we read gives a start date and does not give an end date — which is not the same thing as saying it is permanent. Treat its continued availability as something to confirm at the time, not something to assume.

The 20% that falls due at promise of sale

Article 3(6) is the provision that reorders your cash flow.

A promise of sale agreement is not valid unless it is notified to the Commissioner, and that notification must be accompanied by a provisional payment of 20% of the duty chargeable on the transfer it contemplates. This is not an optional pre-payment; validity is tied to it.

So if the duty on your transfer comes to €10,000, €2,000 of it is payable at the konvenju stage, with the balance at the final deed. If you qualify for the exemption on the first €200,000, the duty chargeable is lower and so is the 20%. Again, the notary computes the chargeable duty, and therefore the provisional payment, from the actual figures.

For a shell purchase this lands at an awkward moment. The promise of sale is usually signed before the bank has released anything, often before you have Planning Authority clarity on what you may do, and almost always before you have real prices for screeds, apertures, services and finishes. Plan for the deposit, the provisional duty payment and the notary's fees to coincide, and keep the fit-out budget separate from them.

What to do with this

Three practical conclusions follow from the text of these two instruments.

1. Ask the SDA question before you make an offer, not after. Whether you require a permit, and whether you would have required one but for the SDA, decides which of three outcomes you get: nil on the first €200,000, 3.50 per 100 on it, or 5 per 100 across the board.
2. Dig out your property history. A quarter-share of a flat inherited — no; acquired inter vivos — possibly yes, unless it was under 25% of value. A field bought with a view to building. These are what the declaration under L.N. 305 of 2025 asks about, and the evidence goes to the Commissioner.
3. Put the 20% in the promise-of-sale column of your budget, alongside the deposit, and leave the fit-out column alone. Shell finishing costs do not shrink to accommodate a duty bill you forgot.