Malta Budget 2026

The Malta Budget 2026 was announced on Monday, 27 October 2025, by Finance Minister Clyde Caruana during a speech in Parliament. The minister outlined the government’s fiscal plan for the coming year, focusing on cost-of-living support, pension and family benefits, business incentives, and sustainability measures aimed at ensuring continued economic stability and social wellbeing. The economy is projected to grow by 4.1% by the end of 2025, and for 2026, the government expects GDP to expand at a similar pace, supported by strong domestic demand and continued public investment.

The key measures of the 2026 Budget are summarised below.

Malta Budget 2026 Overview

Support Measures	Detail
Social Measures	Cost-of-Living Adjustment (COLA) increased by €4.66 per week for all workers. Artificial Intelligence (AI) Training: Introduction of free AI courses, national certifications, and practical sessions for all age groups, along with a free subscription to a leading AI service upon course completion. Energy Benefits to help counter energy costs granted to a wider cohort as income limits for eligible households raised by €2,500. Encouragement across all sectors to extend remote working where possible to improve the work-life balance. New mental health centres to be opened in 2026 in Bormla, Central and Northern Malta. Eligibility for the Pink Card, that gives holders the right to free prescribed medication, will be extended to individuals 65 years and over. A new clinic tackling obesity to be opened.
Pensions & Allowances	Weekly pension increase of €10 for all pensioners. Pensions will remain tax free. Widow and widower benefits are to increase by €3.50 per week, and in the case of a widower raising children, a €10 allowance per week will be granted until the child reaches 23 years of age. An increase of €75 for elderly who reside in their own homes or with relatives, and those who pay privately for living in a care home. An increase of €50 for those not entitled to receive a pension. An increase of €10 per week in the allowance to individuals attending a drug rehabilitation programme. Carers’ Grant rises to €5,368.89 per year, offering further aid to full-time caregivers. Therapy Refund Scheme for children with disabilities increases by €250 annually (now €1,000) and extended to age 23. Rehabilitation allowance for individuals in drug recovery programmes increased by €10 weekly.
Support For Families	Significant changes announced for the income tax rate bands for parents with children under 18 or up to 23 years (if still studying full-time). Reduced taxes are to be introduced over the coming three years and distinguish between families with one child or families with two or more and between married and parent tax bands. Those who are self-employed will be entitled to miscarriage, bereavement leave and the eight week parental leave for the birth, adoption or fostering a child. Children’s Allowance rises by €250 per child for families earning under €30,000 and an additional €167 for those earning under €23,000. €500 of financial assistance to be granted to families with children in year 10 and 11 and post-secondary education for digital devices. Digital devices, such as laptops, to be distributed to students in years 4,7, 8 and 9. Youths of Maltese descent (ages 18–30) living abroad to be incentivised to return for study or work. Stipends to increase by 15%. An extension of the free gym memberships for 16-21 year olds. Gozitan post-secondary/tertiary students who study in Malta will be given an allowance of €280 per month. Increased bonus of €500 upon the birth or adoption to a total of €1,000 for the first child, €1,500 for the second and €2,000 for the third child onwards. Increased support for fostered and adopted children through direct allowances and grants with an additional €10 per week in the Fostering Allowance.
Tax	R&D tax deduction increased to 175 % of qualifying expenses to encourage investment. Tax deductions will be accelerated on investments relating to digitalisation, Artificial Intelligence, automation and cybersecurity over a period of two years. 60% tax credit on approved capital expenditure for eligible businesses. The reduced stamp duty rate for the succession of shares in a family business of 1.5% will be extended for another year. Government will finance 65% of pay increases, capped at €780 per year for employees who have been employed with the same employer for more than four years with a cap of €780 per year. With employers in Gozo receiving up to 80%, capped at €960 per year.
Business	€100 million investment package for digitalisation and innovation projects. MicroInvest scheme limits raised to €65,000 for Malta-based SMEs and up to €85,000 for Gozo-based firms. National Talent Register to be launched to align education and training with industry needs. Launch of the European Digital Hub to provide free access to AI technology and cloud computing services. Development of a new business complex for SMEs developing health and pharmaceuticals, light industry or biotechnology products.
Property	First-time buyer scheme, which provides grants of €1,000 per annum for 10 years to eligible first time buyers, made permanent, ensuring long-term stability in property incentives. The eligibility of a first-time buyer will be extended to those who have already purchased non-residential property, previously excluded from the scheme. Inheritance Duty relief expanded — first €400,000 of inherited property taxed at 3.5 % (previously €200,000). Minimum age of individuals eligible for the equity sharing scheme will be lowered from 30 to 25 years of age, with the purchase price of properties under this scheme to increase to €350,000.
Clean & Green	Eco-contribution for tourists increased from €0.50 to €1.50 per night to fund environmental projects. Young people under the age of 30 will be offered an annual grant of €5,000 to give up their driving licence. Previous grants for scrappage and electric cars will be continued, together with a new grant of €1,500 per year for those buying motorcycles or switching from cars. All public transport vehicles in Gozo in 2025 to be electric. Voluntary schemes will be introduced to compensate retired farmers giving up their land to younger farmers. Further enhancements to be made to the Ta’ Qali National Park to include jogging and cycling pathways. Government introduces a new framework to support the development of open spaces, pedestrian zones, and streets.

At Vertex Alliance, we can assist with any Budget 2026–related queries and help you understand how the new measures may impact your business or personal tax position. With years of experience in Malta’s corporate and tax sectors, our team of expert advisors is well-equipped to provide practical, tailored guidance.

Please contact Michelle de Maria, our Corporate and Tax Manager, at mdemaria@valtd.com.

Reference

Malta Budget 2026

Malta Budget 2026

Malta Budget 2026 Overview

Reference

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