Budget 2026 at-a-glance: what’s in it for you?

Finance Minister Clyde Caruana unveiled the 2026 budget on Monday evening.

In an extensive speech, lasting over two and a half hours, Caruana reeled through a host of measures intended to boost Malta’s birth rate, help the elderly keep up with the rising cost of living and help local businesses grow.

But the budget offered precious little that we did not already know when it comes to transport, energy, the environment or infrastructural projects.

Here are some of the key measures that will impact you over the next year:

Parents

• Income tax bands for parents widened, with parents set to receive a bumper tax cut over the next three years in the budget’s flagship measure.
• Children’s allowance will increase by €250 per child for families earning less than €30,000.
• Grants for people having or adopting a child will increase by €500. People having their first child will now receive a €1,000 grant, those on their second will get €1,500 and parents will receive €2,000 for every child beyond that.
• Parents will receive an additional €75 In-Work Benefit grant per child.
• Prospective parents hoping to adopt from overseas may receive a refund of up to €12,000, rather than the previous €10,000. If they adopt locally, the refund will double from the previous €1,000 to €2,000.

Parents are the big winners in this year's budget. File photo: Matthew Mirabelli

Workers

• Cost of Living Adjustment (COLA) for 2026 will be €4.66 per week, slightly lower than last year’s €5.24.
• COLA Plus, first introduced in 2022, will again be offered to lower income families.
• Social security contributions paid before the age of 18 will now count towards pensions.

COLA for workers will be €4.66 per week in 2026. File photo: Jonathan Borg

Elderly & pensions

• Pensions will increase by €10 per week.
• Widowers will receive an additional €3.50 per week, while widowers raising children will be given an additional €10 each week until their child turns 23.
• Elderly people in nursing homes will pay less for the care they receive.
• Grants for senior citizens living at home or with relatives, or in private care homes, will be increased by €75.
• The grant for elderly people opting to hire a live-in carer will increase by €500, taking it up to €9,000 yearly. 

Pensions are set to increase next year. File photo: Matthew Mirabelli

Property

• First-time buyers scheme to become enshrined in Maltese law, becoming a permanent programme, rather than a temporary scheme.
• Equity sharing scheme, allowing people to buy properties with the help of the Housing Authority, will be extended to people aged 25.
• A scheme to help first-time buyers cover the deposit on their property will be extended to cover up to €250,000, up from the previous €225,000.

A scheme for first-time buyers will become part of Malta's laws. File photo: Matthew Mirabelli

Education

• Stipends to rise by 15%.
• Free gym membership scheme to be extended to those between the ages of 16 and 21.
• Parents of children in Year 10 and 11 to receive €500 in financial assistance to purchase digital devices and resources.

Students will be given a grant to purchase digital equipment. File photo: Matthew Mirabelli

Environment & agriculture

• Plans for a new public space, featuring a shaded garden and underground car park in Sliema.
• Public calls to restore Fort Campbell and Selmun Palace to be issued next year.
• Voluntary compensation scheme for farmers retiring and leaving their agricultural land to young farmers.
• New vegetable market (pitkali) building to be built and Gozo pitkali to be re-opened.
• Animal hospital to re-open and emergency veterinary services to be offered during the night, on Sundays and public holidays.

A new farmer's market is being promised. File photo

Transport

• Gozo’s bus fleet to be fully electrified.
• Marsascala ferry terminal works to continue.
• Ferry service from Valletta to Buġibba and Gozo to start operating.
• Drivers under 30 to get €5,000 allowance for five years if they surrender their driving licence.

Gozo's bus fleet will be fully electrified next year. File photo

Health

• Eligibility age for pink slip free medicines scheme lowered from 75 to 65.
• Grants for coeliac patients to rise to €85 per month.
• Qormi and Gżira health centres to remain open 24 hours a day. Victoria health centre to open until midnight.
• Three new mental health clinics to be set up, one in Cospicua, another in the north of the island and another in the central region.

The Qormi health centre will remain open 24/7. File photo

Industry & technology

• Business Development Scheme to be extended.
• A new complex for SMEs in Ħal Far will be developed by Indis in the next two years.
• Government to subsidise pay rises for workers who have spent four years with one company, covering 65% of a pay rise up for workers in Malta and 80% for those in Gozo.
• Local companies to receive a 60% tax credit on investment over a period of four years.
• ‘Digital identity wallet’ to be developed.
• Free AI courses will be offered to all citizens, with anyone completing a course eligible to receive a free subscription to an AI tool like ChatGPT or Gemini.

The government will subsidise pay rises for workers in the private sector. File photo: Mark Zammit Cordina

Tourism & Gozo

• Tourists’ eco tax to triple from 50 cents to €1.50 per night.
• Gozitan students studying in Malta to receive a €280 monthly grant.

Tourists' eco tax will triple next year. File photo: Matthew Mirabelli

Arts, Culture & Sport

• The long-promised Culture and Arts Hub in Marsa remains in the works, years after it was first announced.
• A public call for a soundstage at the Malta Film Studios, first promised in 2022, will be issued next year.
• The City Gate Arcade is to be restored, and works to restore Villa Guardamangia will continue.