Malta Budget 2025

Malta’s economy continues to expand. The national deficit is likely to decline to 4% in 2024 and continue downwards to 2.6% by 2027 – below the EU’s 3% debt threshold. 2024 is set to see a debt-to-GDP ratio of 49.5%, with little change anticipated for 2025 at 50.1%. The first half of 2024 saw real GDP growth at 5.9%, with 4.9% forecast for the latter half of the year and 4.3% in 2025. GDP will reach €22.3 billion in 2024.

Public services, systems and individuals are feeling the impact of such robust rises. Within this context, the 2025 budget promises further investment in social support initiatives and programmes, designed to enhance living standards and wellbeing. The cost-of-living adjustment (COLA) is set at €5.24 for 2025, and the national minimum wage will rise to €221.78 per week. Unemployment rates are predicted to stabilise at 3.5%, while employment will rise by 4.6% by the end of 2024 and 4.1% during 2024. Inflation will fall from 5.7% in 2023 to 2.5% in 2024, and 2025 should see further falls to 2.1%.

Upcoming highlights by the end of 2024 include a planned public consultation on the Economic Migration Policy. 2025 will see the introduction of a dedicated visa for esports athletes relocating to Malta, as well a new law covering ‘Equal Pay for Work of Equal Value’. And Malta will launch its ambitious Vision 2025 in the final quarter of 2025, outlining plans to improve citizens’ quality of life through a focus on several sectors such as health, education, sustainability, employment, technology and digitalisation, among others.

Malta Budget 2025 Overview

Support Measures	Detail
Social Measures	With the new COLA set at €5.24, students, pensioners and those claiming social benefits will benefit from further increases. Student stipends will see proportional increases. Minimum wage will rise to €221.78 per week – an additional €8.24. Former drug addicts who are successfully rehabilitated and employed will receive two years’ social security credits. Children born between 2005 and 2007 inclusive will be eligible for six months’ free gym membership. €250 million will support over 50 PSPs (Public Social Partnerships). Funded provision for the voluntary sector will include training, research and resources, with a comprehensive service centre slated for the south of Malta. Donations from enterprises to NGOs focused on the environment, animal welfare and social sectors will be subject to a €500-maximum tax credit. New financial incentives for food producers and retailers to sell near-expired products at discounted prices or donate them to charity. New food safety authority to be established as sole sector regulator and authority over food safety during crises. Government subsidies for energy, animal feed and grain will continue.
Support For Families	Marriage grant will rise to €1,000 for each couple. Children’s allowance will go up by €250 per child. Parents of children still in education after the age of 16 will be eligible for a €500 benefit, paid annually. Parents caring for children receiving specialised therapy will get a €750 tax credit – up from the current €500. The same tax credit will also be extended to parents eligible for social benefits and for unemployed parents. Third and subsequent children will attract a bonus of €1,500, representing a €500 increase. Fostering allowances will be increased to €120 per week per fostered individual under 21. Self-employed prospective parents going through IVF treatment will benefit from the same 100 hours of paid leave given to the employed IVF recipients, while self-employed fathers will be eligible for the same 10-day/80-hour paid parental leave that employed fathers currently enjoy. Parents of children at private schools will also gain, with maximum deductions rising from €1,600 to €3,500 for kindergarten fees, €1,900 - €4,600 for primary school fess and from €2,600 to €6,500 for secondary school fees. Persons between 75 and 79 who live either at home or in a home they pay for will see their grants rise to €350 (up from €300). The Carer at Home Scheme will increase from €8,000 to €8,500.
Pensions	Pensions will be boosted by €8 per week/€416 per year. There will be adjustments for widowed pensioners and for those born prior to 1962, in line with established gradual tax exemptions – 80% of pension income will be untaxed, as will additional pension benefits for widowed pensioners and those over the age of 61. The full-pension entitlement requirement for those born from 1976 onwards will extend from 41 to 42 years of NI contributions. Persons lacking sufficient social security contributions will see increases in pension bonus rates, up to a maximum of €1,000. Retirees with disabilities will receive increased pensions to offset lost disability allowances and ensure their income meets the national minimum wage. Employers will be obliged to offer occupational pension plans to employees, though will not have to contribute. The government will contribute up to €100 per month for each employee.
Tax	Tax-free brackets will broaden, leading to savings of €345 - €675 depending on an individual’s marriage/parent status. A zero-VAT rate will apply to female sanitary products and other fundamental medical items used to treat female-specific cancers. Wine and low-alcohol beer and wine manufactured by small local producers will see reduced excise duty. Investment of €68 million over ten years to implement a digital IT system integrating Tax and Customs Administration functions, allowing taxpayers to verify their tax status in real time. While Malta delays implementing the OECD's Pillar 2 global 15% minimum tax for large multinationals, the government is in talks with the European Commission to introduce grants or tax credits that comply with EU State Aid Rules and BEPS Pillar 2 requirements.
Business	The duty rate for transferring family businesses to descendants will stay at 1.5%. To position Malta as a premier hub for administrative services, the 2025 budget expands the Highly Qualified Persons scheme to include providers of both regulated and unregulated back-office functions. The DiHubMT (European Digital Innovation Hub) will continue to provide startups and SMEs with mentorship, access to a high-performance computer for research purposes, and pre-accelerator and incubator support. Planned launch of a Digital Identity Wallet with secure smartphone access. Further legislation to boost Malta's status in financial services, focusing on family offices, aircraft leasing, fintech, and AI. New laws regarding limited partnerships to be enacted in 2025.
Property	Continuation of duty exemptions for first-time buyers and partial stamp duty refund for second-time buyers will continue. €10,000 grant for first-time buyers to remain. The grants offering €15,000 for properties in Malta and €40,000 in Gozo to first-time buyers will be extended. Eligible properties include those in UCAs, over 20 years old and vacant for seven years and new builds adhering to approved standards. Income tax and duty exemptions on the first €750,000 of property value will persist for properties in UCAs or those over 20 years old and vacant for at least seven consecutive years before transfer. VAT refunds up to €54,000 on the first €300,000 spent on restoration and finishing will remain available for properties in UCAs, properties over 20 years old vacant for seven years and new developments meeting approved criteria. Plans for temporary emphyteusis redemption scheme to expand eligibility.
Clean & Green	Government extends incentives for residential renewable energy investments, including water purification systems, restoration of wells in old houses, PV panels, solar water heaters, heat pump water heaters And energy storage batteries. Strategic clean energy vision includes developing a national renewable energy policy, gauging market preparedness through consultations, investing in mass energy storage batteries and implementing a second interconnector. Two of six potential zones identified for renewable energy projects have been deemed environmentally favourable by a Strategic Environmental Assessment. Exploration of wind energy in Malta's exclusive economic zone and solar projects in territorial waters, including offshore floating wind farms and nearshore floating solar installations. Regeneration projects for public and green spaces announced for Ħal Luqa, Ħal Lija, San Ġiljan, and Ħal Kirkop. Government to invest in an intelligent traffic management system. Upcoming national strategy to promote cycling as an alternative mode of transport. Extended grants for new electric vehicles (up to €8,000), motorbikes (up to €2,000), pedelecs, e-bikes; old-vehicle scrappage; incentives for wheelchair-accessible taxis, and conversions to gas or electric power. Electric vehicles and plug-in hybrids with a minimum 50km electric range to remain exempt from registration tax and annual road license fees for five years from first registration. Continued investment in free public transport, including expanded ferry routes and vehicles, fast ferry services, and projects to boost maritime transportation. Construction to begin on new waste management facilities for separating mixed bulky waste and recycling materials like wood and metal. Waste from organic processing to be transformed into clean energy and soil additives. A €310 million, 10-year national plan launched to invest in high-quality water supply compliant with European directives. New national water irrigation management plan to combat climate risks in agriculture and fisheries.

For further information about Malta’s Budget for 2025, please contact us.

Reference

Malta Budget 2025

Malta Budget 2025

Malta Budget 2025 Overview

Reference

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