Malta Entices Expats with Low Pension Tax Offer

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British expats retiring to Malta will pay just 15% tax on their income in a bid to lure the wealthy to move to the Mediterranean island.

The deal does come with some strings attached – but they should be easy for expats to handle.

Besides the promise of a place in the summer sun and warm winters, Malta has a long and distinguished history of friendly political and economic links with Britain – and is just a short hop away for flights back home.

The tax break offers a rate that is 5% less than basic income tax in Britain, and 35% less than the higher rate tax rate of 40%.

The conditions are straightforward – retirees must:

  • Spend a minimum of €275,000 on home on Malta or €250,000 on the neighbouring island of Gozo or rent a home for a minimum of  €9,600 a year on Malta or  €8,750 on Gozo
  • Spend at least 90 days on the islands each year
  • Receive a pension that represents the majority of their income


The Maltese government also promises a strict selection procedure that ensures expats are no threat to “public health, public policy or public security” with a €2,500 application fee.

Expats will have to pay minimum income tax of €7,500 a year, plus €500 for each dependent.

“Demand for this scheme is considered to be substantial,” said a government spokesman. “This is therefore an exciting programme that will be managed by the International Tax Unit of the Inland Revenue Department under the same arrangements for the other High Net Worth Individual (HNWI) schemes in force”.

The scheme offers attractive tax benefits to expats who switch the retirement savings from the UK in to a Malta QROPS.

Low taxes for expats

Retirees could draw up to 30% of the transfer value as a tax free lump sum and subsequent payments in Euros, avoiding currency exchange rate fluctuation.

In addition, Malta has no council tax, annual property taxes or inheritance tax.

According to overseas real estate web site Property, for €300,000, a home buyer could purchase a three bed semi-detached house in a quiet neighbourhood, with off-road parking, a front garden, large living area, kitchen, bathroom and a rooftop terrace.

For buyers with a bigger budget, €5 million buys a five bed detached villa overlooking Ta’Xbiex marina, with spectacular views of capital Valletta’s harbour and fortifications

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