TA24 or progressive tax in Malta — which costs you less?

The three Malta tax regimes for rental income

Malta's Income Tax Act gives residential landlords three ways to account for rental income each year. You elect once — and that election covers every residential letting you own for the whole tax year.

The three options are:

• TA24 (Article 31D) — a 15% flat rate applied to gross rental income, with no deductions of any kind.
• Article 31E — Housing Authority scheme — a 5% flat rate, available only on properties leased through the Housing Authority's affordable rental programme.
• Progressive income tax — net rental income (gross minus allowable expenses) is declared through the MTCA and taxed at your marginal rate alongside all your other income.

The election is made by filing the TA24 form with the Commissioner for Revenue (CFR) by 30 April for the previous calendar year. Miss the deadline and you default to progressive tax for that year — there is no extension and no amnesty. One election applies to all your residential rental properties simultaneously; you cannot choose TA24 for one property and progressive for another in the same year.

TA24 — flat 15% on gross rent

TA24 is deliberately simple. Under Article 31D of the Income Tax Act, you multiply your total gross rental receipts by 15% and that is your tax bill. Nothing is deductible — not mortgage interest, not letting agent fees, not repairs and maintenance, not insurance, not the annual Housing Authority registration fee, not depreciation.

Example: if your property generates €18,000 in gross rent during the year, your TA24 liability is exactly €2,700. It does not matter whether you spent €500 or €5,000 maintaining the property. The calculation is the same.

That simplicity is both the appeal and the trap. Landlords with a fully paid-off property, low ongoing maintenance costs, and no professional management fees benefit most. Landlords carrying a large mortgage or running a higher-maintenance property often end up overpaying relative to what progressive tax would cost them on the same income — sometimes significantly so.

TA24 income is ring-fenced: it is not added to your other income when calculating your marginal rate. If you have a salary and rental income, electing TA24 keeps those streams separate — the rental income does not push your salary into a higher bracket.

Progressive tax — declared as ordinary income

If you do not elect TA24, your net rental income is declared through the MTCA alongside your salary, business income, and any other taxable receipts. The tax bands that apply depend on your filing status:

• Single: 0% up to €9,100; 15% from €9,101 to €14,500; 25% from €14,501 to €60,000; 35% above €60,000.
• Married: 0% up to €12,700; 15% from €12,701 to €21,200; 25% from €21,201 to €60,000; 35% above €60,000.
• Parent: 0% up to €10,500; 15% from €10,501 to €15,800; 25% from €15,801 to €60,000; 35% above €60,000.

For the full 2026 bands and how they interact with National Insurance, see the Salary Calculator.

The key advantage of progressive tax is that you subtract allowable expenses before calculating net rental income. The CFR recognises these deductions on rental property:

• A standard 20% deduction on gross rent (a flat allowance in lieu of itemised maintenance costs).
• Mortgage interest on the loan used to acquire the rental property — this is the single most powerful deduction available and the main reason progressive tax beats TA24 for landlords with a recent purchase mortgage.
• Ground rent (emphyteutical or sub-emphyteutical tenure payments).
• Licence fees and registration fees — including the mandatory rental licence under the Private Residential Leases Act.

You cannot deduct capital repayments, furniture purchases, or improvements that increase the property's capital value. The 20% standard deduction or itemised maintenance costs are an either/or choice — most landlords take the standard 20% unless actual documented costs exceed that amount.

Article 31E — the Housing Authority 5% scheme

The Housing Authority affordable rental scheme, governed by Article 31E of the Income Tax Act, offers a 5% flat rate — the lowest of the three options. But the eligibility requirements are strict and the rent ceiling requirement frequently neutralises the tax saving.

To qualify, the property must be:

• Leased through a Housing Authority-administered agreement (not a private tenancy arrangement).
• Subject to a lease of at least seven years.
• Let at a rent set by the Housing Authority — typically well below open-market rates for the locality.

The 5% rate applies to the Housing Authority's rent ceiling, not to whatever the open market would bear. For a two-bedroom apartment in Birkirkara that might rent for €1,100/month privately, the Housing Authority ceiling might be €750/month — meaning you collect €4,200 less per year. The tax saving versus TA24 on that lower figure is around €750/year. In most cases, the rent reduction more than offsets the tax benefit.

Article 31E makes sense only in a narrow scenario: your property falls into a zone or size band where the Housing Authority ceiling is at or close to market rate, you have no mortgage, and you value tenure security over maximising short-term yield. That combination is rare but not impossible — some apartment types in certain localities sit near the ceiling. If you are actively considering this scheme, run your specific gross rents through the TA24 Decision Calculator to see whether the 5% rate survives the rent discount.

Worked examples — when each regime wins

Three patterns hold across most landlord situations. TA24 wins when gross rent is high and allowable expenses are low — a paid-off property with modest maintenance generates almost no deductions worth claiming, and a flat 15% on gross beats 25%+ on net once your marginal rate clears 15%. Progressive tax wins when you are carrying a substantial mortgage with large interest payments, or when your gross rent is low enough that deductions bring the taxable net into a band below 15%. Article 31E wins only in a narrow case: the Housing Authority's rent ceiling sits at or near market rate for your specific property and you can commit to the seven-year minimum. The tipping point depends on your exact gross, deductions, mortgage interest, and marginal rate — the only reliable way to find it is to run all three regimes against your actual figures.

The two scenarios below show how sharply the answer can move depending on the landlord's circumstances.

Example A: paid-off property, low expenses

A landlord with €15,000 gross annual rent, no mortgage interest (fully owned), €1,000 of other deductible expenses, and other income that pushes the marginal rate to 25%.

TA24 saves this landlord €500 compared to progressive tax. With no mortgage and modest expenses, the 20% standard deduction and €1,000 in itemised costs only reduce the taxable base to €11,000 — and at the 25% marginal rate that costs more than a straight 15% on the gross. The higher the marginal rate and the lower the deductions, the more TA24 outperforms.

Example B: recent mortgage, high interest payments

A landlord with €20,000 gross annual rent, €8,000 of annual mortgage interest, €2,000 of other deductible expenses, and other income that pushes the marginal rate to 25%.

Progressive tax saves this landlord €1,500. The €8,000 mortgage interest deduction is the decisive factor — it reduces the net rental income from €20,000 to €6,000, and at 25% that yields a bill of only €1,500 versus TA24's €3,000. Landlords who bought recently or borrowed to renovate often find the gap is even larger in the early years of a mortgage when interest makes up most of the repayment.

These examples use rounded figures for clarity. Your actual tipping point depends on your exact gross rent, interest schedule, documented expenses, and marginal rate. Find your exact tipping point with the TA24 Decision Calculator — it computes all three regimes side by side from your inputs and highlights which one wins and by how much.

The election mechanics — TA24 form, deadlines, what binds you

The TA24 form is filed annually with the CFR covering the prior calendar year. The deadline is 30 April — there is no provision for late election. Miss it and you are automatically assessed under progressive tax for that year; you cannot switch retroactively once the return is processed.

The election is all-or-nothing across your residential portfolio. If you own three properties, electing TA24 means all three are taxed at 15% on gross rent. You cannot ring-fence one under progressive while electing TA24 for the others — important if your properties have very different mortgage profiles.

The election is not permanent. You can switch regimes year to year as long as you file on time; the CFR does not require you to justify the change. The election covers only residential letting income — commercial rental income is always taxed progressively regardless of what you elect for residential. And the CFR has discretion to disallow TA24 if the property is mainly used for business purposes; short-term holiday lets registered with the MTA sit in a different category entirely.

What this means for you

Working through the examples above manually is prone to error, especially when rental income meets your other taxable income at the margin. Plug your gross rent, deductible expenses, mortgage interest, and other taxable income into the TA24 Decision Calculator — it returns the exact liability under each regime with the cheapest highlighted, and shows the tipping point (the expense level at which TA24 and progressive break even) so you can plan forward as your mortgage amortises.

Then carry the after-tax figure into the Rental Yield Calculator for net yield, cash-on-cash return, and the 25-year compounded scenario. Compare all three regimes side by side first, then layer the yield analysis on top. If you're evaluating a new purchase, running both before you commit is the only reliable way to avoid a surprise at year-end.

Edge cases worth knowing

Newly built or first-time-let properties. There is no waiting period before you can elect TA24 — you can elect it in the first year of letting. However, if you incurred significant acquisition costs (stamp duty, notarial fees, renovation) and can argue those are allowable against rental income for the first year, the progressive route may be worth examining before locking in TA24 from year one.

Non-resident landlords. If you are not ordinarily resident in Malta, rental income is typically subject to a 15% final withholding tax at source under a separate regime — not TA24. The TA24 election is available only to persons assessable to Maltese income tax as residents. Non-residents should confirm their position with a Maltese tax adviser rather than assuming TA24 applies to them.

Properties held through a company. If your rental property is owned by a Maltese company (Ltd or equivalent), the rental income is subject to corporate tax — currently 35% at the corporate level, with partial refunds available to shareholders on distribution. The TA24 personal election is irrelevant in this structure. Whether to hold property personally or through a company is a separate planning question that depends heavily on your overall income level and long-term exit plans.

Mixed-use properties. If you let part of a property commercially and part residentially, you will need to apportion income and expenses. The residential portion can potentially use TA24; the commercial portion cannot. The CFR expects a reasonable and documented apportionment — typically by floor area or by revenue.

For any of these edge cases, run your gross rent and expenses through the TA24 Decision Calculator to establish a baseline, then take the output to a Maltese accountant or tax adviser if the situation involves corporate structures, non-residence, or mixed-use complications. The calculator handles the straightforward residential landlord scenario; the edge cases benefit from professional advice.