26 October 2026

The Malta Budget 2027 sets out the measures and priorities that will shape the year ahead.

But what do they mean for you?

Our Budget update helps you quickly understand what’s changing and what it could mean for you, your family or your business.

Whether you’re a business owner, employee, pensioner, student or investor, follow our updates below as we break down the measures that matter most to you.

Keep checking this page for the latest Budget 2027 updates and insights from our team.

01.
Understanding What’s Next for

Students and Young People

  • Enhanced Support for Young People Leaving Care: Young people transitioning from alternative care into independent living will benefit from financial, educational and housing support between the ages of 17 and 21, in addition to existing educational allowances. 

  • Extended Orphans' Supplementary Allowance: Eligible orphans pursuing tertiary education will continue receiving support up to age 25, or until six months after graduating and starting employment, whichever comes first. The allowance will increase to €170 per week. 

  • More Opportunities for Young Entrepreneurs: A new corporate tax framework for smaller companies will complement the Youth-Led Start-Up Support Scheme, encouraging young people to establish and grow their own businesses. 

  • Support for Young People in Rehabilitation: Young people undergoing rehabilitation for behavioural difficulties will benefit from social security contribution credits, vocational training and assistance with employment or self-employment.
02.
Understanding What’s Next for

Parents and Families

  • Married Couples with One Child: The tax-free income threshold will increase to €20,000 in 2027 and €22,500 in 2028, with maximum annual tax savings of €1,450 and €2,175, respectively.

  • Parents with One Child: The tax-free income threshold will increase to €16,000 in 2027 and €18,000 in 2028, with maximum annual tax savings of €1,150 and €1,800 per parent, respectively.

  • Married Couples with Two or More Children: The tax-free income threshold will increase to €30,000 in 2027 and €37,000 in 2028, with maximum annual tax savings of €4,050 and €6,000, respectively. 

  • Parents with Two or More Children: The tax-free income threshold will increase to €24,000 in 2027 and €30,000 in 2028, with maximum annual tax savings of €3,250 and €5,000 per parent, respectively. 

  • Additional Cost-of-Living Assistance: Low- and middle-income households will benefit from additional payments ranging from €200 to €1,500 annually, depending on household income and family composition. 

  • €500 Support for Post-Secondary Education: Eligible families will receive €500 for each child attending post-secondary education.

  • Higher Carers Grant: The annual grant for parents unable to work because of their child's severe disability will increase to €7,500 in 2027. Parents working up to 20 hours per week on a part-time basis will also become eligible for assistance at the existing rate. (Page 23)
03.
Understanding What’s Next for

Single-person Households

  • No Increase in Personal Income Tax Rates: The Government confirmed that there will be no increase in personal income tax rates, VAT rates and social security contribution rates. 
04.
Understanding What’s Next for

Employees

  • Cost of Living Adjustment: The COLA for 2027 has been established at €6.41 per week. 

  • National Minimum Wage Increase: The national minimum wage will increase by €10.41 per week in 2027, inclusive of COLA. Employees earning the minimum wage will remain outside the income tax net. 

  • Super Bonus: Tax-free payment of up to €1,000 for individuals who worked during 2025, including self-employed and part-time workers. Payments scheduled for the first quarter of 2027.

  • Paid Sports Leave for Elite Athletes: Athletes representing Malta at European or world championships, together with accompanying technical and medical team members, will receive 10 days of paid sports leave.

  • Social Security Protection During Career Interruptions: Employees temporarily absent from employment because of mental health difficulties or domestic violence may receive up to two years of social security contribution credits. 

  • No Increase in Social Security Contributions: Employees' social security contribution rates will remain unchanged, with no increase in the statutory retirement age. 
05.
Understanding What’s Next for

Entrepreneurs, Employers & the Self-Employed

  • Corporate Tax Reduced to 25% for Small Companies: A new tax framework will allow qualifying companies with annual turnover not exceeding €1 million to benefit from a reduced corporate tax rate of 25%, instead of 35%, on profits retained or reinvested in the business. Distributed profits will remain subject to the 35% rate. 

  • Super Bonus: The self-employed individuals benefit from the Super Bonus, subject to the relevant criteria.

  • VAT:
    • Construction: A new VAT reverse-charge mechanism will shift VAT accounting obligations from suppliers to business customers for qualifying construction transactions, strengthening compliance and reducing opportunities for VAT fraud.
    • Non-Compliant Businesses: Revised administrative penalties for failing to issue correct VAT invoices or fiscal receipts will start at €100 and increase to €500 for repeated infringements within 24 months. 
    • VAT Treatment of Food: New guidelines will clarify the VAT exemption applicable to ready-to-eat food sold by supermarkets, minimarkets and convenience stores, promoting fair competition. 

  • Renewal of Existing Business Incentive Schemes: The Government confirmed that existing incentive schemes across different sectors will be renewed for 2027. 

  • Continued Energy Subsidies for Businesses: Government support will maintain stable electricity and fuel prices, helping businesses manage operating costs and remain competitive. 
06.
Understanding What’s Next for

Pensioners and Older Persons

  • €10 Weekly Pension Increase: Retirement, invalidity, widows' and age pensions will increase by €10 per week from January 2027, inclusive of COLA. 

  • Higher Tax-Free Pension Threshold: The annual tax-exempt pension income threshold will increase by €520 to €37,624. 

  • Higher Maximum Pensionable Income: The maximum pensionable income for individuals born before 1962 will increase to €28,000, benefiting approximately 15,000 pensioners. 

  • No Increase in Retirement Age: The Government confirmed that the statutory retirement age and social security contribution rates will remain unchanged. 

  • Higher Carer at Home Grant: The annual benefit for older persons who employ a full-time carer will increase by €800, bringing the total benefit to €9,800.

  • Full Two-Thirds Pension for Widows and Widowers: The final phase of pension adjustments will ensure that eligible surviving spouses receive the full two-thirds pension entitlement, benefiting more than 7,000 individuals. 
07.
Understanding What’s Next for

Property Owners, Tenants and Prospective Homebuyers

  • Extension of Existing Property and Renewable Energy Incentive Schemes: Existing government schemes supporting property purchases, home improvements, housing-related initiatives, renewable energy installations and energy-efficient improvements will be renewed for 2027. 

  • Greater Transparency in Property Transfers: New measures will address arrangements involving the transfer of airspace rights, requiring more complete disclosure of the total consideration and strengthening property valuation and verification procedures. 

  • Fairer Taxation of Property Developments: Property transactions involving developers and intermediaries will be subject to enhanced scrutiny to ensure taxation reflects their economic substance. 

  • Continued Support for Household Energy: The Government will encourage greater use of domestic battery storage systems, while continuing electricity and gas subsidies to support households with their energy needs and costs

 

08.
Understanding What’s Next for

Non-Residents

Important: These measures distinguish between citizenship, residency and long-term resident status. Not all non-Maltese nationals will be affected equally.

 

  • Higher Work Permit Application Fees for Non-EU Nationals: The fee for new work permit applications will increase from €600 to €800 per person.

  • New €400 Annual Infrastructure Contribution: An additional €400 annual fee will apply to new and renewed work permits for workers from outside the EU. Individuals under 18 will be exempt. 

  • Changes to Free Public Transport Eligibility: From January 2027, free public transport will remain available to Maltese and Gozitan citizens, resident EU citizens and qualifying long-term residents.

  • Revised Free Childcare Eligibility: From 2027, new access to free childcare will be restricted to Maltese and Gozitan citizens, resident EU citizens and qualifying long-term residents. Existing beneficiaries will retain access while their children remain eligible.

  • Changes to Atypical Work Benefits: From January 2027, the atypical work cheque will be restricted to Maltese and Gozitan citizens, resident EU citizens and long-term residents.

  • Revised Driving Licence Rules: Holders of driving licences issued outside the EU will generally be permitted to drive in Malta for 12 months from their entry into the country, after which a Maltese or EU licence will be required, subject to specified exemptions.

  • New Monthly Driving Licence Administrative Fee: A fee of €83 per month will apply to certain category B and B1 driving licences issued or renewed from 2027. Exemptions will apply to specified categories, including EU/EEA citizens, long-term residents and certain other nationals.

  • Higher Tourist Accommodation Eco-Contributions: Visitors aged over 18 will pay €8 per night in collective accommodation, capped at €64, or €10 per night in short-let accommodation, capped at €80.

  • New €10 Cruise Passenger Eco-Contribution: A €10 contribution will apply to cruise passengers who disembark and re-embark on the same cruise ship in Malta. Passengers beginning their cruise in Malta will be exempt.

  • New €5 Eco-Contribution for Comino Visitors: Tourists visiting Comino's Blue Lagoon will be subject to a €5 contribution through the existing booking system.

  • Higher Gozo Ferry Fares for Non-Residents: Non-resident adult passengers will pay €11, while children will pay €7. The fare for a vehicle with its driver will increase to €22.

  • Higher Fast Ferry Fares for Tourists: Tourist fares on fast ferry services will increase by €3 per journey.
09.
Understanding What’s Next for

Investment, Tax & Incentives

  • Incentives for Business Reinvestment: The new corporate tax framework will encourage smaller companies to retain earnings and reinvest in business growth rather than distribute profits. 

  • Continued Support for Financial Services Investment: Malta will continue strengthening its regulatory and administrative frameworks to attract investment in financial services.

  • Combined Investment & Renewable Energy Incentives: Existing government schemes supporting business investment, renewable energy and other eligible activities will continue in 2027, alongside further investment in renewable energy infrastructure, including offshore wind, renewable energy imports and battery storage.

  • Continued Business Support Through Malta Enterprise: Existing incentives supporting digitalisation, automation, modernisation and higher-value investment will continue in 2027. 

  • Positive Economic Growth Outlook: Malta's economy is projected to grow by 3.8% in real terms in 2027, with investment expected to increase by 7%. 

  • Stable Income Tax and VAT Rates: The Government confirmed that personal income tax and VAT rates will remain unchanged. 
10.
Understanding What’s Next for

Social and Community Groups

  • €121 Million Social Measures Package: The Government announced a package of social measures exceeding €121 million, targeting pensioners, families, employees and vulnerable individuals. 

  • Support for Victims of Domestic Violence: Eligible employees temporarily unable to work because of domestic violence will receive up to two years of social security contribution credits. 

  • Mental Health-Related Social Security Protection: Employees temporarily absent from work because of mental health difficulties will also qualify for up to two years of contribution credits. 

  • Investment in Healthcare Infrastructure: Planned improvements include expanding Mater Dei's Emergency Department capacity from 35 to 70 treatment spaces, a new 135-bed mental health facility and further healthcare improvements in Gozo. 

  • Additional Assistance for Patients Receiving Treatment Abroad: From 2027, the Government will begin covering the cost of one accompanying person for adults receiving medical treatment overseas. 

  • Further Investment in Community and Recreational Spaces: Additional funding will support the maintenance and regeneration of public recreational areas and Malta's natural environment.
     
  • Continued Support for NGOs and Sports Organisations: Existing government incentive schemes supporting non-governmental organisations and sports associations will be renewed for 2027. 

  • Continued Support for Farmers and Fishermen: Financial and technical assistance will continue for farmers, fishermen, livestock breeders and others involved in food production. 

Key Industries & Sectors

Malta continues to strengthen its position across key industries and emerging sectors, with further initiatives aimed at attracting investment and supporting growth in areas such as financial services, family offices, crypto and fintech, and aircraft leasing.

  • The Government announced a significant revision to the eco-contribution regime applicable to tourist accommodation. As from 1 January 2027, guests staying in collective accommodation establishments will be charged an eco-contribution of €8 per night, subject to a maximum charge of €64 per person, while individuals staying in short-let apartments will be charged €10 per night, capped at €80 per person.

  • In addition, as from 2027, accommodation used by students attending English language schools will be exempt from the eco-contribution.

  • In a further extension of the eco-contribution regime, the Government will introduce a €10 charge on cruise passengers who visit Malta as part of their itinerary and who disembark and re-embark the same cruise vessel during its port call. Passengers embarking on cruises originating from Malta will remain exempt from this charge.

  • Furthermore, the Government announced that a €5 eco-contribution will be introduced for tourists visiting Blue Lagoon.

  • Tourist fares for maritime transport services such as the fast ferry service will increase by €3 per journey. Separately, the Gozo ferry tariff applicable to non-residents will be revised, with adult passengers subject to a fare of €11, children charged €7, and vehicles driven by non-residents charged €22 per crossing.

  • A second Malta–Sicily Interconnector will be installed, doubling Malta's electricity interconnection capacity, strengthening the security and resilience of the country's electricity supply.

  • Technical studies are underway for a proposed third Malta–Gozo Interconnector, supplying 132kV electricity to further strengthen electricity connectivity between the islands.

  • From 2027, the Government will cover the expenses of one accompanying person for adult patients receiving medical treatment abroad, extending the existing assistance provided to patients and accompanying parents of children receiving treatment overseas. 

  • Continued implementation of the Gozo General Hospital master plan, including additional outpatient clinics, facilities for minor procedures, expanded operating theatres and dedicated dental healthcare facilities. The Government also intends to increase healthcare services in Gozo to reduce the need for patients to travel to Malta and potentially reduce waiting times. 

  • The Budget introduces a revised charging framework for vessels eligible to purchase subsidised fuel, targeting vessels ranging between 10 and 24 metres in length. The new framework introduces a tiered system of annual charges based on vessel size, with charges ranging from €300 for vessels between 10 and 12 metres to €2,600 for vessels between 21 and 24 metres. Professional fishing vessels and vessels measuring less than 10 metres will remain outside the scope of the measure, while vessels exceeding 24 metres are already excluded from the subsidised fuel regime. 
Budget 2027 recognises that Malta’s economic model needs to evolve. While continuing to support families and businesses, the shift towards higher-value investment, greater contributions from non-residents and visitors, and stronger fiscal and VAT compliance is a necessary step. The challenge will be to deliver greater productivity and fairness while preserving Malta’s competitiveness and avoiding unnecessary burdens on compliant businesses.
Michael Agius Partner | Head of Tax, Wealth Management and Family Offices
Malta Budget 2027: Understanding What Comes Next

Malta Budget 2027: Understanding What Comes Next

Our specialists have analysed the Malta Budget 2027 announcements and their potential impact across industries, bringing together key highlights, expert commentary, and practical considerations in one comprehensive report.

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