Malta Budget 2026 — what changed for your finances

The headline number — €160 million off family income tax

Budget 2026 set aside €160 million to reduce the income tax burden on families with dependent children. The Hon. Minister of Finance described it as targeted at roughly 68,000 parents, with an average tax saving of about €2,400 per parent once the reform is fully phased in by 2028. The measure is structured as a progressive widening of four tax-band tables — Married Computation with one child, Married Computation with two or more children, Parent Computation with one child, and Parent Computation with two or more children — across the three years 2026, 2027, and 2028. Standard Single and Married (no children) rates are unchanged.

The Budget Speech is precise about which families each computation is designed for. Married Computation, the speech states, applies "in situations where typically only one spouse is earning an income, or where the income of the other spouse is minimal" — the one-earner household case. Parent Computation, by contrast, "applies to families where both parents are working", and the speech repeatedly describes the savings as "per parent" rather than per household. That distinction is the load-bearing piece of the reform: under Parent Computation, each working parent independently applies the widened bands to their own income, so a two-earner couple gets the wider bands twice, not once.

The Couple Salary Calculator runs every viable filing route — Married Computation (with the appropriate child-widened bands), Separate Computation at single rates, single-spouse parent claim, and the both-spouses-claim scenario — and ranks them by combined household net. For most two-earner couples with dependent children, the both-spouses-claim Parent Computation is now the cheapest filing path by a meaningful margin.

Family tax reform — the bands

The 2026 bands are the first step of the three-year progression. The numbers below are taken directly from the MTCA "NEW TAX RATES, 2026 — Budget Amendments" document (January 2026), which is the operative source for payroll and self-assessment calculations.

By 2028 the Parent Computation 0% band for two-plus children widens further to €30,000, and the 15% band runs up to €42,000. The Budget Speech put this in concrete terms: "parents earning €30,000 each with two or more children will pay no income tax within three years." Use the tax-year toggle in the Salary Calculator or the Couple Salary Calculator to model the 2027 and 2028 figures alongside 2026 — what you negotiate now and what your payslip nets in 2028 are two different conversations.

One nuance worth highlighting: parent rates are only available to a Malta-resident taxpayer who is also a Malta or EU/EEA national (or a long-term resident with Malta-born, Malta-resident children). Step-parents and registered cohabitants of a child's parent qualify too, provided the relationship is formal. If you're an expatriate working in Malta with children, run the calculator both ways — the eligibility flag changes whether the wider bands apply.

Property — First-Time Buyers becomes permanent

The First-Time Buyers (FTB) grant scheme has been renewed every year since 2013. Budget 2026 ends that annual ritual: the scheme is being "enshrined in mainstream law, ensuring it is permanently applicable." The benefit remains the same — a grant of €1,000 per year for ten years for first-time buyers — but it is no longer at the discretion of an annual budget vote. More than 7,000 individuals have benefited from FTB since 2013, and the certainty of permanence matters for anyone planning a purchase 18 months out.

Budget 2026 also broadens FTB eligibility: previously, individuals who had purchased non-residential property (a garage, a commercial unit, an office) were disqualified from the FTB grant on their first residential purchase. Under the new rules, only a prior residential purchase counts against eligibility. If you bought a garage in 2019 and you are now buying your first apartment, you qualify.

The closely-watched stamp duty headline rates — first-time buyer 0% on the first €200,000, 3.5% on €200,000–€400,000 for UCA / qualifying properties, and the standard 5% above that — are unchanged. The Cost of Buying Property guide still applies; only the FTB grant's legal status moved. The Rent vs Buy calculator bakes the FTB stamp-duty regime into its purchase-side costs.

Property — the 10% home-loan deposit scheme rises to €250,000

The Housing Authority's deposit-loan scheme covers the 10% deposit on a home for buyers who can service the mortgage but can't muster the cash upfront. The Authority effectively lends the deposit, repayable over 25 years with interest covered by the Authority itself. Budget 2026 raised the property-value ceiling from €225,000 to €250,000, a +11% jump that tracks (loosely) the property-price drift since the prior figure was set.

This is the closest thing Malta has to a public-sector co-investor in your home purchase: if your gross income is high enough for the bank to lend you 90% of the price and your DSTI ratio passes the CBM Directive 16 stress test, the Housing Authority can plug the 10% deposit and you finish the purchase without parental help or a savings ten-year plan. Use the Mortgage Affordability calculator to see what your salary supports at full LTV before deciding whether the scheme is the right unlock for you.

Property — equity sharing opens to 25-year-olds

The Housing Authority's equity-sharing scheme buys 50% of your home and lets you repay over 20 years. Budget 2026 dropped the minimum age from 30 to 25, opening it to a cohort that has been priced out of single-name mortgage applications since the 2018 price acceleration. Around 380 families have used the scheme over the last four years. The property-value cap is raised to €350,000 for separated buyers (the standard cap remains lower for unseparated single applicants).

For young single buyers, equity sharing changes the affordability calculus materially. Under a single-name 25-year loan at €350,000 with a 4% rate, your monthly payment is around €1,850 — well above what a typical €1,800 monthly net can service under CBM Directive 16's 40% DSTI ceiling. Under equity sharing on the same property, you finance €175,000 — a monthly payment closer to €920, which fits comfortably under the same DSTI ceiling. The trade-off is that 50% of any future appreciation accrues to the Authority, not to you. Run both scenarios through the mortgage calculator and the rent-vs-buy comparison before signing.

Property — causa mortis threshold doubles

Inheriting the family home in Malta has historically attracted a 3.5% reduced rate of stamp duty on the first €200,000 of value, with the standard 5% applying to the balance. Budget 2026 doubles the reduced-rate threshold to €400,000. For a Maltese property worth €450,000 inherited and used as a primary residence, the stamp duty drops from approximately €20,500 (under the old rule) to roughly €16,500 — a €4,000 saving. The change applies to inheritances after 1 January 2026.

The reduced-rate stamp duty applies only when the inherited property becomes the heir's residence. Inherited rental properties continue to be assessed at the standard rate. If you are weighing whether to keep an inherited family home or sell, the new threshold tilts the math toward keeping it — at least if you intend to live in it.

Solar — the small-system feed-in tariff is maintained

Budget 2026 confirmed the feed-in tariff for electricity generated by photovoltaic installations smaller than 40 kWp will continue at current rates. There is no announced phase-out, no reduction, no shift to net metering only. For residential and small commercial solar, the export rate that the grid pays you for surplus generation remains intact for another year.

The REWS grant schemes for PV and battery storage — Option A (new systems), Option B (battery + inverter upgrades for existing arrays), and Option C (high-NZIA-bonus configurations) — also continue. The Solar ROI Calculator already models all three Options against the current REWS caps and the maintained feed-in tariff; nothing in Budget 2026 invalidates the existing payback figures. If you've been on the fence about a 4 kWp + 6 kWh installation, the unchanged tariff is the implicit signal that 2026 is still a good year to install.

Salary — COLA rises by €4.66 per week

The Cost-of-Living Adjustment for 2026 is set at €4.66 per week, equivalent to approximately €242 per year before tax. The increase is automatic for all employees and pensioners and is paid on top of contracted wages. Combined with the DIER statutory pay (€512.52 per year for full-time Class 1 employees — €135.10 in late June, €135.10 on 23 December, €121.16 at end of March, €121.16 at end of September), a full-time worker's non-base annual income tops €750 in 2026.

The COLA and statutory pay are taxable employment income and run through the same MTCA band as your regular salary. The Salary Calculator rolls both into the annual gross figure so the net you see already accounts for the tax owed on these components. If you're a Class 2 self-employed worker, neither COLA nor statutory pay applies — there is no employer to mandate them against, and the Class 2 SSC mechanics differ from Class 1 in any case.

Investment — Investor Tax Credit raised to 60%

Budget 2026 raised the Investor Tax Credit ceiling: qualifying investors in eligible Maltese enterprises (typically angel and seed-stage investments in technology, health, gaming, and financial software) can now claim a tax credit of 60% of the investment value, with the maximum credit raised to €65,000. This is a return-side incentive: every euro you invest in a qualifying enterprise reduces your tax bill by 60 cents up to the cap, on top of any equity-side return.

For Maltese residents who would otherwise hold their portfolio in a global index ETF subject to the standard 15% Investment Income Provisions tax on disposal — the framework modelled by the Investment Return calculator — the Investor Tax Credit is a meaningfully different proposition. The base-case ETF math is "what do I net after a 15% IIP haircut on the gain"; the Investor Tax Credit math is "what does my tax bill look like after a 60% credit on the principal, ignoring exit". The two are not directly comparable without modelling the holding-period risk and liquidity profile, but for high-net-worth Maltese investors the credit is now sufficiently large to model alongside the index-ETF base case.

What this means for you

The single largest impact of Budget 2026, for the average Maltese household, is the family tax reform. If you and your spouse both work and you maintain at least one dependent child, the Couple Salary Calculator will almost certainly recommend filing under Parent Computation with both spouses electing, and the savings versus your prior filing route will be substantial — €1,500 to €3,000 a year for typical mid-income couples, rising to the announced €2,400-per-parent average by 2028.

If you're a first-time buyer, the FTB scheme is now permanent, the deposit ceiling is higher, and equity sharing opens to a younger demographic. None of those changes the headline price of the property you're looking at, but they reduce the upfront cash requirement and the income threshold you need to clear at the bank. Run your numbers through the Mortgage Affordability calculator and the Rent vs Buy comparison with the new household-net figure from your Parent Computation re-filing — the additional tax savings flow directly into your borrowing capacity.

If you already own and are weighing a solar install, the maintained feed-in tariff means the Solar ROI Calculator's 2026 payback figures remain valid through next year. If you've inherited the family home and intend to live in it, the doubled causa-mortis threshold cuts your stamp duty by several thousand euros. And if you have surplus capital looking for a yield, the Investor Tax Credit changes the relative attractiveness of seed-stage Maltese investments versus a global ETF run through the Investment Return calculator.

Budget 2026 is bigger than a single line on a single payslip. The compounding effect of family tax savings reinvested into a mortgage, a solar install or an ETF over the next decade is meaningful — €60,000 to €100,000 of household net worth uplift, depending on income mix and starting position. The calculators on this site model each step independently. The point of this guide is that the steps now compose differently than they did a year ago, and re-running the numbers is worth a Saturday morning.

Sources and citations

The primary sources for every figure in this guide are two government documents published in January 2026 and available on this site for verification:

• MTCA — NEW TAX RATES, 2026 (Budget Amendments). The Malta Tax & Customs Administration's operative document for the 2026 income-tax band schedules. Section 1 covers Married Computation (Article 56(1)(a)) standard / +1 child / +2 or more children; Section 2 covers Single rates and Parent Computation (Article 56(1)(b)) standard / +1 child / +2 or more children. All bands in this guide are reproduced verbatim from that document.
• 2026 Budget Speech by the Hon. Minister of Finance (October 2025), printed and published by the Ministry of Finance. The speech contains the policy framing — including the explicit statement that Parent Computation "applies to families where both parents are working" and the "per parent" savings language — that confirms how the new bands are intended to be claimed under Separate Computation.

Both documents are available directly from the Maltese Government: the MTCA Budget Amendments document is published by the Malta Tax & Customs Administration, and the 2026 Budget Speech is available through the Ministry of Finance. If any figure in this guide differs from what your accountant tells you, defer to the primary sources first and a Malta-registered tax professional second. This guide is informational; it does not constitute financial, legal or tax advice.