Abela insists there is no risk of foreign buyers driving up property prices

A law that requires non-residents to obtain a permit before buying property prevents wealthy foreigners from speculating in Maltese real estate, Robert Abela said.

“A foreigner can’t just come to Malta and buy properties as they please. We have limitations in the law to ensure there is no property speculation that raises prices,” the prime minister said.

He was speaking after Construction Minister Jonathan Attard and Malta Development Association representatives visited China as part of a trade delegation earlier this month.

At the LPS Shanghai Luxury Property Exhibition, Attard told the conference: “Malta is open for business... We welcome investors who share our vision for sustainable growth and innovation.”

The trip was organised by the Property Malta Foundation, a public-private partnership tasked with attracting property investment in Malta.

Times of Malta asked Abela about concerns that wealthy property buyers from overseas could mean higher property prices for working and middle-class locals.

Abela said the aim of the trade delegation was to bring investment “in a general way” into Malta.

“There were members who are part of the MDA but also other investors. The aim of this delegation was to attract quality investment – not necessarily in the construction sector.”

Abela said the trip was a success, as “there already is a lot of interest,” he said.

He argued that attracting foreign investment helps fund “the sorts of strong budgets that there have just been” and it would be a mistake not to do so. 

He said Malta’s laws safeguard against foreigners speculating in property, as third country nationals need a purchaser’s permit to acquire a property.

What does the law state?

The Immovable Property (Acquisition by Non-Residents) Act lists several conditions for when a non-resident can be allowed to buy property in Malta.

Non-residents are defined as any EU citizen (including Maltese) who has not lived in Malta for five years or third country nationals who are not granted permanent residence status. 

Among the conditions is that the “immovable property is solely used as a residence by the applicant and his family and for no other purpose” and “immovable property may not be sold in part or otherwise converted into more than one dwelling house”.

The law says the finance minister should also grant a purchasing permit if the property is needed for “an industrial or touristic project approved by the government”. 

The act also cites projects that would contribute to the Maltese economy as reasons to grant the purchasing permit.

However, several ‘Special Designated Zones’ listed in the law exempt non-residents from the conditions. Among the 26 locations are Fort Chambray in Gozo, Tigné Point in Sliema and Portomaso in St Julian’s.

A recent report into Malta’s property market found the average asking price for an apartment is now €414,600 – around €40,000 higher than a year ago – despite the average apartment shrinking in size. The median apartment price also rose, from €285,000 in 2023 to €317,000.

During her Republic Day address, President Myriam Spiteri Debono said Malta must continue to help mitigate housing market pressures for those in danger of falling behind.

While commending efforts like the Church-government Affordable Housing Foundation, she said further work must be done to ease market pressures.