The Tax Rebate for Long Leases in Malta: Up to 500 Euro a Year

Most Maltese landlords know the 15% final tax on rent. Far fewer know that the law then gives part of it back. If your lease runs for two years or more and it is registered with the Housing Authority, you are entitled to a rebate of between 200 and 500 euro a year, deducted straight off the tax on that lease.

The rules have been on the books since June 2020 and have not changed since. They are short, they are precise, and they contain one condition that quietly disqualifies the most common lease in Malta: the one-year contract that keeps renewing.

What the rebate is worth

The amount depends on two things only: how long the lease was agreed for, and how many bedrooms the leased premises has according to the contract. Rule 5 of the Private Residential Leases (Tax Rebate) Rules (S.L. 123.201) sets the whole table:

• At least two years but less than three years - one bedroom, 200 euro; two bedrooms, 300 euro; three or more bedrooms, 400 euro.
• Three years or more - one bedroom, 300 euro; two bedrooms, 400 euro; three or more bedrooms, 500 euro.

Two details matter more than they look. First, the rebate is annual, not one-off: it comes off the tax for every year the lease is in force, so a three-year lease on a two-bedroom flat is worth 400 euro a year, 1,200 euro across the term. Second, it is granted per lease. A landlord with three qualifying leases claims three rebates.

There are two limits. In the year a lease starts or ends, the rebate is reduced pro rata to the number of days the lease was actually in force (rule 5(3)). And in any year the rebate cannot exceed 15% of the rent derived from that lease in that year (rule 5(4)). Since the tax itself is 15% of gross rent, that second limit simply means the rebate can wipe out the tax on a lease but never turn into a refund.

The three conditions, in order

Rule 3 and rule 5(1) set out what has to be true. All three, not two of three.

1. The lease was agreed for two years or more. Under Cap. 604 a long private residential lease cannot be shorter than one year, so the legal minimum and the rebate threshold are not the same number. One year is legal; two years is the point where the rebate starts.
2. It is registered with the Housing Authority as a long private residential lease. Registration is the landlord's obligation and it has to happen within 30 days of the lease starting - see how many days you have to register a rental contract in Malta. An unregistered lease is null and void under Article 4(1) anyway, so it cannot produce a rebate.
3. You opted for the 15% final tax. The rebate exists only as a deduction from the tax charged under Article 31D of the Income Tax Act. Declare the rent in your normal tax return at progressive rates instead and there is nothing for the rebate to come off.

The renewal trap

This is the part almost nobody explains. Rule 4 says the duration of the lease is worked out by reference to the original period agreed in the contract, and that no regard is taken of any period of renewal or extension of that original period.

So the single most common arrangement in Malta - a one-year lease that rolls over, year after year - never qualifies. Not in year one, not in year six. The same goes for a one-year lease stretched by an express renewal agreement: the renewal period is disregarded, and the original period is still one year. Three consecutive one-year terms produce a rebate of zero. A single three-year term on the same flat, at the same rent, produces 400 euro a year for a two-bedroom.

What it looks like in euros

Take a two-bedroom apartment let at 1,100 euro a month on a three-year contract, properly registered. Annual rent is 13,200 euro. The 15% final tax is 1,980 euro. The rebate for a two-bedroom lease of three years or more is 400 euro, so the tax actually payable on that lease is 1,580 euro - an effective rate of about 12% instead of 15%.

On the same flat let on a two-year contract, the rebate drops to 300 euro and the effective rate lands near 12.7%. Signed for one year, the rebate is nothing at all and you pay the full 1,980 euro. The rent has not changed in any of the three cases. Only the term written into the contract has.

The 15% cap in rule 5(4) only bites at the bottom end. A 400 euro rebate needs at least 2,667 euro of rent from that lease in the year to be claimed in full, which a whole apartment will always clear but a single let room might not.

How to claim it

You claim the rebate on the TA24, the form prescribed under Article 42(4)(c) of the Income Tax Management Act, and you submit it together with the payment of the tax (rule 6). There is no separate application and no separate deadline.

That deadline is 30 April of the year following the year in which you received the rent, per Article 42(4)(c) of Cap. 372. Rent collected during 2026 is declared and paid by 30 April 2027. It is worth being precise about this, because plenty of guides still quote 30 June, which was the older rule.

You are not expected to compute the figure from scratch. Rule 7 requires the Housing Authority to send the Commissioner, by 31 January each year, a list of every registered lease of at least two years as at the previous 31 December, showing the commencement date, the annual rent and the rebate calculated under rule 5. In other words, the tax administration already has the number. Registering the lease is what puts you on that list. Our walkthrough of the TA24 covers the rest of the form.

How the rebate gets taken back

Rule 8 lets the Commissioner ask for more information, make enquiries with the Housing Authority, and refuse a claim outright where there is reason to believe a condition was not met. Rule 9 goes further: if a rebate turns out not to have been due, you can be asked to pay back an amount of tax equal to it, with interest running from 1 May of that year of assessment. Rule 10 gives you the usual right to object and appeal.

The bigger risk sits one step earlier. Under Article 31D(5) of the Income Tax Act, rental income that should have been declared and was not is taxed at 35% of the gross rent when an enquiry finds it, final, with no set-off or refund, on top of interest and additional tax. The rebate is a discount for doing the paperwork. The penalty for skipping it moves in the opposite direction, and by more.

The short version

• Two years or more, registered, taxed at 15%: rebate of 200 to 500 euro a year off the tax on that lease.
• Three years or more moves you up one band. Two bedrooms on a three-year term is 400 euro a year.
• Only the original term in the contract counts. Renewals and extensions are disregarded entirely.
• Claimed on the TA24, due with the tax by 30 April of the following year.
• Pro rata in the first and last year, and capped at 15% of that lease's rent.

If you are about to draft a lease, the term you write in is worth real money, and a longer term is usually what a tenant wants anyway. When you are ready to advertise, you can list your property on Letify and deal with tenants directly, with no agency fee on either side.