Malta Rental Income Tax Calculator (TA24)

If you rent out residential property in Malta, you choose between two tax regimes every year - and the choice is yours to make again each year.

Option one: the 15% final withholding tax. You pay a flat 15% on your gross rental income by submitting form TA24. Gross means gross: no deductions for repairs, interest, ground rent or anything else. The tax is final - the income does not appear in your tax return, does not push your other income into a higher bracket, and cannot be refunded later.

Option two: declare it in your tax return. The rental profit is added to your other income and taxed at your normal progressive rates. You may deduct a short, fixed list of expenses (more below) - but nothing outside that list.

You cannot split a year's rental income between the two regimes: for any given year of assessment it is all 15%, or all in the return.

The TA24 form, together with the payment, must reach the Commissioner for Revenue by 30 April of the following year. Miss it and interest of 0.6% per month starts running on the tax due - and you risk losing the option of the 15% rate for that year altogether.

Filing online is the practical default, and if you want the registered-lease rebate it is the only way: the rebate can be claimed exclusively through the online TA24.

Deductions against rental income declared in the return are strictly limited to:

• interest on money borrowed to acquire the rented property (not capital repayments),
• rent or ground rent you pay on the property, and
• licence fees,

plus a further 20% maintenance allowance calculated on the gross rent after deducting ground rent and licence fees (but before interest). Repairs, improvements, agency costs and everything else: not deductible. A loss on one property cannot be set off against other income, other properties, or carried forward.

This route usually wins only when your other income is low (so your marginal rate is below 15%) or your financing costs are substantial.

If your lease is registered with the Housing Authority as a long private residential lease of two years or more and you opt for the 15% rate, you qualify for an annual tax rebate L.N. 258 of 2020:

The rebate is pro-rated in the years the lease starts and ends, can never exceed 15% of that year's rent, and is claimed through the online TA24 only. In practice it rewards exactly what the law already requires of you - a registered, longer lease - so if you're signing a two-year contract anyway, this is free money.

Say you let a two-bedroom flat in Gżira for €1,200/month on a registered three-year lease - €14,400/year gross.

• TA24 route: 15% of €14,400 is €2,160, minus the €400 rebate = €1,760 - an effective rate of about 12.2%.
• Tax-return route: with no ground rent or loan, the 20% allowance leaves €11,520 taxable. At a 25% marginal rate that is €2,880.

The TA24 route saves €1,120 here. Flip the numbers - a big bank loan on the property, or a landlord with almost no other income - and the return route can win. That's why it is worth running your own figures every year rather than defaulting to either option.