In 2013, Malta announced that it was ready to issue its passports in exchange for investments. Due to the small size of the country, a limit of 1,800 applications was set, which is already almost exhausted by a third. According to Henley & Partners, as of June 2015, 620 applications had been submitted, more than half of which come from investors from Russia and former Soviet Union countries. Some of them are still pending, but 300 applications have been approved. If this pace continues, by 2018 Malta will have issued all 1,800 new passports.
Malta citizenship will cost an investor about 1.2 million euros. Of this, 650,000 euros must be donated to the local National Development Fund, real estate must be purchased worth at least 350,000 euros, and another 150,000 euros in government bonds and shares. The remainder will go to due diligence and administrative and legal costs.
First, the investor receives a residence permit, and after a year, when all formal procedures are completed, a passport. With it, you can live and work in any European Union country and visit 163 countries worldwide without a visa, including the United States.
The decision to grant citizenship in exchange for investments caused real estate prices to rise, which had been steadily falling for the previous five years. According to Tranio, real estate prices in Malta have been rising for the second consecutive year. In the first quarter of 2015, housing prices increased by 4.7%, and in the first quarter of 2014, by 6.4% year-on-year. A square meter in Malta costs on average between 1,500 and 3,000 euros. Prices depend heavily on location, number of bedrooms, distance from the coast, sea view option, and infrastructure. A simple one-bedroom apartment on the secondary market in a good area can be purchased on average for 150,000 euros.
For the mandatory minimum amount for purchasing real estate under the program rules (350,000 euros), you can buy a two- or three-bedroom apartment. For 650,000 euros, houses or penthouses are offered. At a price from 650,000 to 800,000 euros, you can buy a four-bedroom villa with a pool.
Due to the small size of the island, the supply of housing is limited and new properties hardly appear. 'Often, properties that come on the market in the morning are already rented by evening, and properties listed for sale usually sell within one to four weeks,' say Henley & Partners.
As an alternative to buying real estate, Maltese authorities allow renting housing for at least five years with an annual rent of no less than 16,000 euros. But since the investment immigration program was launched, such rates have practically disappeared. For this money, you can only rent very small studios or apartments, and the average rental rate is 18,000-25,000 euros. Despite the high rates, many investors prefer to rent because, under the program rules, if you choose to buy rather than rent, you cannot resell the chosen property within five years of obtaining citizenship.
Currently, two- and three-room apartments are most often rented and bought in the most interesting coastal part of the island (Sliema, Valletta, St Julian's), where the main shops, restaurants, and popular beach clubs are located. Options in the central part of the country are also in demand.
Experts believe that the real estate market in Malta will continue to grow in the coming years. Given the limited supply and constant growth in demand for real estate, its cost will only increase, and the same applies to rental rates.