If you let a property in Malta you can choose how the rent is taxed.
Most landlords take the flat rate, because it is simpler and usually cheaper.
The 15% flat rate
Fifteen per cent of the gross rent, paid as a final tax.
Gross means before anything is taken off. You cannot deduct the loan interest, the maintenance or the agency fee.
The income does not get added to the rest of what you earn, so it does not push your other income into a higher band.
It is declared and paid on a separate form, by 30 April for the previous calendar year.
Declaring it with your other income
The alternative is to put the rent in your normal tax return and pay at the standard rates, after deductions.
Allowable costs there include ground rent, licence fees, maintenance and a 20% deduction for repairs and upkeep.
That only works out better if your total income is low, or your costs on the property are high.
Run both numbers before deciding. On a small flat with no loan on it the flat rate almost always wins.
You choose again every year
The election is made per property and per year.
Picking the flat rate one year does not lock you into it for the next one. A change in circumstances, like taking out a loan on the property, can flip which option is better.
The lease still has to be registered
Tax and registration are separate obligations and both sit with the owner.
Private residential leases must be registered with the Housing Authority within ten days of the start date.
A lease that was never registered is a problem whatever rate you paid on the income. An unregistered contract is also harder to enforce if the tenant stops paying.
Short lets are different
Holiday lets and anything advertised nightly fall under the Malta Tourism Authority and need a licence and a registration number.
The tax treatment is not the same as a residential lease, and there is an eco-contribution per guest per night to collect and pass on.
If you are letting a room or a flat by the night, read the MTA rules rather than these.
Before you file
This is general information, not tax advice.
Rates and rules change, and the right answer depends on figures only you have. Check the current position with an accountant or with the Commissioner for Revenue before you file.
