Measures as announced in the Budget speech of 26 October 2026, checked against the speech as published by the Ministry for Finance. Legislation follows. Updated: 27 October 2026.
If you are planning a move to Malta, or already live here on a residence permit, and would like to know what these measures may mean for your own plans, I would be glad to talk it through with you. You can book a time with me directly.
Malta's Budget for 2027 was presented to Parliament on the evening of 26 October 2026. It covers the full range of the country's public finances, from pensions and support for families to energy prices and business taxation. This note focuses on the measures that concern people who live in Malta as non-EU nationals, and on the parts of the tax system relevant to anyone moving to Malta.
A set of measures changes the position of third-country nationals (TCNs), the legal category for people who are not citizens of an EU or EEA member state or of Switzerland. From January 2027:
- free public transport continues only for those who hold long-term resident status;
- driving on an international licence is limited to twelve months, after which a Maltese or EU licence is needed and a monthly administrative fee applies, with some nationalities exempt;
- the free early-years childcare scheme closes to new entrants;
- fees for the work permits issued by Identità rise.
There was no mention of the Malta Permanent Residence Programme (MPRP) or the Nomad Residence Permit, nor of the special tax status programmes. The latter's position stands as legislated: the Individual Tax Programme (ITP) comes into force on 1 January 2027, and applications under the existing special tax status programmes must be received by 31 December 2026. Each is explained below.
This note sets out the measures as announced and the categories of residents they concern.
The measures at a glance
- Public transport. Public transport in Malta typically refers to the national bus network. From January 2027, free public transport continues only for Maltese citizens, EU citizens resident in Malta and long-term residents. Other residents, tourists and short-term visitors will need to pay the standard fares for 2027, which were not specified in the Budget speech.
- Driving on an international licence. A valid international licence issued outside the EU can be used for twelve months from entry. Leaving and returning does not restart the clock. After that, a Maltese or EU licence is needed.
- A monthly fee on ordinary car licences. From 1 January 2027, a new administrative fee of €83 a month applies to category B and B1 licences (cars and quadricycles) issued or renewed from that date. Exempt: EU and EEA citizens; long-term residents and their spouses; citizens of the United Kingdom, Australia and the United Arab Emirates. No other nationality is named.
- Free childcare. The Free Childcare Scheme is the government's free early-years childcare for working or studying parents. From 2027, new entrants must be Maltese citizens, EU citizens resident in Malta or long-term residents. Families already in the scheme keep it until their children age out.
- The Atypical In-Work Benefit. A one-time cash payment of €150 a year to private-sector employees who worked shifts, weekends or evenings in listed sectors, earning up to €25,000 a year. From 1 January 2027 it too is limited to Maltese citizens, EU citizens resident in Malta and long-term residents.
- Work permits issued by Identità. The fee for a new single permit (the combined work and residence permit for non-EU employees, issued by Identità) rises from €600 to €800, with a new €400 annual infrastructure contribution on new applications and renewals, minors exempt.
- Wages. The cost-of-living adjustment (COLA), the statutory annual increase that every employee in Malta receives on top of salary, is €6.41 a week from January 2027. The national minimum wage rises by €10.41 a week, a figure that includes the COLA. Minimum wage income earners will not pay tax on this increase.
- Small companies. Companies with turnover up to €1 million are to be taxed at 25% instead of 35% on profits they retain or reinvest; profits paid out as dividends stay at 35%. The speech announces the framework only; its conditions, limits and start date are yet to be published.
- Unchanged. No increase in personal income tax rates, VAT or social security contributions. The tax bands for parents with children widen, as explained below. Energy subsidies continue.
- Not mentioned. No specific reference was made to:
- the Malta Permanent Residence Programme (MPRP);
- the Nomad Residence Permit;
- the Individual Tax Programme (ITP), the existing special tax status programmes, or the 31 December 2026 deadline;
- duty on documents and transfers (stamp duty) on property purchases.
Who do the Malta Budget 2027 measures affect, and how?
Whether a measure affects you depends on your citizenship and on the type of residence status you hold in Malta. The main categories are set out below.
Maltese citizens. Unaffected by the measures concerning third-country nationals.
EU, EEA and Swiss citizens resident in Malta. Residence in Malta rests on the right of free movement, with residence documentation issued by Identità under the Free Movement of European Union Nationals and their Family Members Order (S.L. 460.17). Unaffected by the measures concerning third-country nationals.
Long-term residents. Unaffected by the measures concerning third-country nationals: under the Budget as announced, long-term residents keep free public transport and free childcare, and they and their spouses are exempt from the licence fee. Long-term resident status is the EU status created by Directive 2003/109/EC and granted in Malta under the Status of Long-Term Residents (Third Country Nationals) Regulations (S.L. 217.05), through Identità's Expatriates Unit, after five years of legal and continuous residence and on conditions that include integration measures. It is applied for and assessed, not automatic, and it changes the holder's tax position, as explained in the tax section below.
More on long-term resident status
Each EU member state grants its own long-term resident status within the directive's framework, and a person can hold it in one EU member state at a time.
In Malta, the Status of Long-Term Residents (Third Country Nationals) Regulations (S.L. 217.05) require:
- five years of legal and continuous residence immediately before the application, with only limited absences allowed;
- stable and regular resources;
- accommodation;
- sickness insurance;
- the integration measures in those Regulations: a cultural integration course and a Maltese language requirement, whose current form and pass levels are published by Identità and the Human Rights Directorate and have recently been revised.
Not every period of residence counts towards the five years. Under the directive, time spent as a student counts only in part, and residence under permits that are formally limited in time does not count at all.
Once granted, the residence permit is issued for five years at a time. The status is lost after twelve consecutive months outside the EU, six years outside Malta, or on acquiring the status in another EU member state.
The directive also provides for equal treatment with nationals in defined areas, subject to the limits it allows member states to set. The Status of Long-Term Residents (Third Country Nationals) Regulations (S.L. 217.05) set out how that applies in Malta.
Third-country nationals on residence programmes or tax statuses. This group includes:
- beneficiaries of a Certificate of Maltese Residence under the Malta Permanent Residence Programme, governed by the Malta Permanent Residence Programme Regulations (S.L. 217.26) and administered by the Residency Malta Agency;
- beneficiaries of the former Malta Residence and Visa Programme (MRVP), under the Malta Residence and Visa Programme Regulations (S.L. 217.18), closed to new applicants since 2021, with existing beneficiaries continuing under those Regulations;
- holders of the Nomad Residence Permit, issued by the Residency Malta Agency;
- third-country nationals holding a special tax status, under the Global Residence Programme Rules (S.L. 123.148) today and the Individual Tax Programme Rules (Legal Notice 195 of 2026) from 1 January 2027, with their residence documentation issued by Identità. Our ITP guide and our comparison of the special tax status programmes explain these.
An important detail: permanent residence under the MPRP is not long-term resident status. The two are different statuses under different regulations, and holding an MPRP Certificate of Maltese Residence does not make its holder a long-term resident. On the wording of the Budget speech document, an MPRP family therefore pays for public transport, pays the licence fee unless exempt by nationality, and cannot newly join the Free Childcare Scheme, unless a family member separately holds long-term resident status.
Third-country nationals on work-based permits. The position is as for the group above, with one addition: holders of a residence permit for driving-related work are exempt from the licence fee, and the permit fee changes apply to this group. It comprises employees on a single permit under the Single Application Procedure Regulations (S.L. 217.17), including those admitted through Identità's Key Employee Initiative and Specialist Employee Initiative, together with students and family members on dependant permits. Minor dependants, those under eighteen, are exempt from the €400 annual contribution.
Will I have to pay for public transport?
If you are a third-country national living in Malta without long-term resident status, yes, from January 2027. Public transport has been free since October 2022 for residents holding a personalised Tallinja card, the public transport card issued by Malta Public Transport. From January 2027, free travel continues for Maltese citizens, EU citizens resident in Malta, and long-term residents. The answer therefore turns on citizenship and status: a Maltese or EU citizen living in Malta keeps free travel, while a third-country national living in Malta keeps it only with long-term resident status. Other residents will pay the standard fare, which the Budget speech does not specify.
Who is affected, by status, from January 2027
| Status | Free public transport, from January 2027 | Licence fee (€83 a month) on category B and B1 licences issued or renewed from 1 January 2027 | Free Childcare Scheme (new entrants from 2027) and Atypical In-Work Benefit (from 1 January 2027) |
|---|---|---|---|
| Maltese citizen | Free | Exempt | Eligible |
| EU, EEA or Swiss citizen resident in Malta | Free | Exempt | Eligible |
| Long-term resident (S.L. 217.05) | Free | Exempt, with spouse | Eligible |
| UK, Australian or UAE citizen without long-term resident status | Standard fare | Exempt | Not eligible |
| MPRP beneficiary (Certificate of Maltese Residence under S.L. 217.26) | Standard fare | Applies, unless exempt by nationality | Not eligible |
| MRVP beneficiary (Certificate of Maltese Residence under S.L. 217.18) | Standard fare | Applies, unless exempt by nationality | Not eligible |
| Nomad Residence Permit holder | Standard fare | Applies, unless exempt by nationality | Not eligible |
| Special tax status holder who is a third-country national | Standard fare | Applies, unless exempt by nationality | Not eligible |
| Single permit holder (including KEI and SEI) | Standard fare | Applies, unless exempt by nationality or holding a driving-work permit | Not eligible |
As announced in the Budget speech of 26 October 2026; details and figures to be updated once officially published.
Can I drive in Malta on my international licence?
Yes, but only for twelve months from your entry. The speech sets a twelve-month limit for driving in Malta on a licence issued outside the EU. Leaving and re-entering does not restart it. For people who already hold a residence permit, the twelve months run from the last entry before 1 January 2027. After that, a Maltese or EU licence is required. Some countries' licences can be exchanged for a Maltese licence without a test. Others cannot, and the Maltese theory and practical tests apply. Transport Malta's licence pages list the categories and the exchange rules by country.
Where an international licence cannot be exchanged, obtaining a Maltese licence involves the theory and practical tests and takes some months, so it is worth starting early.
An administrative fee of €83 a month applies to category B and B1 licences issued or renewed from 1 January 2027. Category B is the ordinary car licence: vehicles up to 3,500 kg with no more than eight passenger seats, with a light trailer. Category B1 covers quadricycles. The speech names only these two categories.
The announced exemptions are EU and EEA citizens, long-term residents and their spouses, citizens of the United Kingdom, Australia and the United Arab Emirates, and holders of residence permits for driving-related work. The licence lapses with the residence permit, and it is not renewed while a payment is outstanding.
The speech names no other nationality, so citizens of the United States, Canada and every other non-EU country not listed are within the fee as announced. The implementing rules will set out how the fee is applied and collected.
Will my free childcare stop?
Not if you are already in the scheme. The Free Childcare Scheme, run through Jobsplus since 2014, provides free places at registered childcare centres for children from three months of age until they are old enough for kindergarten, at about three years, where the parents work or study. It is the early-years scheme only: state kindergarten and state schooling are a separate matter and were not mentioned in the speech. Families already benefiting keep their place until their children outgrow the scheme. From 2027, new entrants must be Maltese citizens, EU citizens resident in Malta, or people who meet the criteria as long-term residents. For an MPRP family arriving in 2027 with a young child, free childcare is no longer available as announced; private childcare has to be budgeted.
The Atypical In-Work Benefit Scheme is also limited, from 1 January 2027, to Maltese citizens, EU citizens resident in Malta and long-term residents. It is a €150 annual payment through Jobsplus to lower-paid private-sector employees who work shifts, weekends or evenings in listed sectors. Jobsplus's page sets out the conditions.
Identità work permit fees: who pays them
This measure concerns the single permit, the combined work and residence permit for third-country national employees issued by Identità under the Single Application Procedure Regulations. The application fee for a new permit rises by €200, from €600 to €800 per new application. A new infrastructure contribution of €400 applies to new applications and to renewals, every year, with minor dependants, those under eighteen, exempt.
The measure does not specify any changes to fees related to permits handled through the Residency Malta Agency.
Does anything change for the MPRP, the Nomad permit or the ITP?
Nothing was specified in terms of any of the three.
The MPRP. Its fees, thresholds and conditions stand as set in the Regulations, summarised in our guide.
The Nomad Residence Permit. Not mentioned.
The ITP and the existing special tax status programmes. The Individual Tax Programme comes into force on 1 January 2027, as legislated, following the submission deadline for the existing programmes. No change to that deadline was specified: statuses granted, and applications received, under the existing programmes up to 31 December 2026 continue until 31 December 2031. Anyone relying on the existing programmes' terms should treat receipt of the application by the Commissioner for Tax and Customs before 31 December 2026 as the practical cut-off. Our comparison page sets the existing programmes beside the ITP.
I own, rent or let property here
No change to the duty on documents and transfers, commonly called stamp duty, was announced, and the speech states that all of this year's property schemes are renewed for 2027. Duty on the purchase of property remains governed by the Duty on Documents and Transfers Act (Cap. 364), and tax on transfers by the Income Tax Act, both administered by the Malta Tax and Customs Administration. Two measures touch owners who let: the eco-contribution on tourist stays rises from 1 January 2027 to €8 a night in collective accommodation and €10 a night in short lets, capped at €64 and €80 per person per stay, and a new disclosure requirement applies to transfers of airspace, with fuller declaration of the total consideration and stronger valuation checks. The eco-contribution continues to apply to guests over eighteen.
My tax, my bills and my wages
The personal income tax rates themselves stay at 0%, 15%, 25% and 35%, VAT stays at 18% and social security contributions are unchanged. What moves is the bands for married couples and parents with children, which widen in 2027 and again in 2028 as announced last year and doubled in this speech. The tables below show the position for 2026, the year now ending, and 2027, as set out in the speech; the Malta Tax and Customs Administration publishes the official rates each January.
Standard computations (no change specified for 2027)
| Chargeable income | Single | Married, no children | Parent |
|---|---|---|---|
| 0% up to | €12,000 | €15,000 | €13,000 |
| 15% up to | €16,000 | €23,000 | €17,500 |
| 25% up to | €60,000 | €60,000 | €60,000 |
| 35% above | €60,000 | €60,000 | €60,000 |
Family computations: where tax starts, and the bands for 2027
| Computation | Tax-free up to, 2026 | Tax-free up to, 2027 | 15% band, 2027 | 25% band, 2027 |
|---|---|---|---|---|
| Married, one child | €17,500 | €20,000 | €20,001 to €30,000 | €30,001 to €60,000 |
| Married, two or more children | €22,500 | €30,000 | €30,001 to €41,000 | €41,001 to €60,000 |
| Parent, one child | €14,500 | €16,000 | €16,001 to €24,500 | €24,501 to €60,000 |
| Parent, two or more children | €18,500 | €24,000 | €24,001 to €33,500 | €33,501 to €60,000 |
Income above €60,000 is taxed at 35% under every computation. The married computations apply where one spouse works or the other's income is small; the parent computations apply where both parents work. By 2028 the tax-free amounts rise again, to €22,500, €37,000, €18,000 and €30,000 respectively.
How Malta taxes a new resident: the basics the Budget did not change
The bands above matter less to most new arrivals than the system they sit in, which the Budget left untouched.
Residence and domicile are different things. Malta still works with the concept of domicile, the country a person treats as their permanent home, which is usually inherited at birth and changes only by a settled decision to make somewhere else home for good. Most people who move to Malta become resident in Malta without becoming domiciled in Malta. Domicile is a question of fact assessed on a person's own circumstances, year by year; Malta has no rule that deems someone domiciled after a fixed number of years.
The remittance basis. A person who is resident in Malta but not domiciled in Malta is taxed on income arising in Malta wherever it is received, and on income arising outside Malta to the extent that it is received in Malta. Capital gains arising outside Malta are not taxable even if received in Malta. The MTCA sets out the rules, including what counts as receipt in Malta, in its guideline on the remittance basis of taxation for individuals, reached from its tax residence page. Income received in Malta is taxed at the bands above. A minimum annual tax of €5,000 applies under the Income Tax Act to resident non-domiciled individuals whose foreign income is at least €35,000 a year, whether or not it is received in Malta.
Long-term resident status changes the basis. The remittance basis described above is for residents who are not domiciled in Malta and who hold no settled status in Malta. Under the Income Tax Act, a person who obtains long-term resident status, or permanent residence under the Free Movement Order, is charged to Maltese tax on worldwide income at the ordinary rates, with relief for foreign tax under Malta's network of double taxation treaties. A special tax status ceases on acquiring either. The rights that long-term residence brings therefore come with a wider tax base, and the two are a consideration to weigh together before applying.
The special tax statuses. Holders of a status under the existing programmes, or under the ITP from 1 January 2027, pay the status's own rate on foreign income received in Malta, 15% under the ITP, subject to the status's minimum annual tax and conditions. None of this was altered by the Budget.
The Nomad Residence Permit's tax treatment. Under the Nomad Residence Permits (Income Tax) Rules, income from the authorised remote work is taxed at 10%, with the possibility of the first twelve months being exempt, subject to the conditions in those Rules. The permit is a temporary one, renewable to a maximum of four years, and under the Residency Malta Agency's rules it does not lead to long-term resident status or to citizenship. The Budget did not alter the rate, but it may impact the nomad's everyday costs: the bus fare and, for drivers without an exempt nationality, the licence fee.
Bills, wages and companies
Energy. Energy and fuel subsidies continue through 2027, so household energy prices hold.
Wages. Employees receive the cost-of-living adjustment (COLA) of €6.41 a week from January 2027. The national minimum wage rises by €10.41 a week, a figure that includes the COLA, and minimum wage income earners will not pay tax on this increase.
Pensions. Retirement, invalidity, widows' and age pensions rise by €10 a week from January 2027, a figure that includes the COLA, and the speech says the tax-free threshold on pension income will be raised.
The Super Bonus. A one-off tax-free payment of €1,000 is to be made in the first quarter of 2027 to those who worked in 2025 with employment income of €12,000 or more, pro-rated below that. The eligibility rules will specify who qualifies.
Small companies. A reduced tax rate of 25%, instead of 35%, was announced for companies with turnover up to €1 million. The speech specifies that the reduced rate applies to profits that are retained or reinvested, and that profits taken as dividends remain taxed at 35%. The Budget speech announces the framework, while the details are yet to be published.
When do the Malta Budget 2027 measures take effect?
The transport, licence, childcare and permit measures were announced for January 2027. Further details on the measures will be updated here once officially published.
Frequently asked questions
Will MPRP residents pay for public transport from January 2027?
As announced, yes. Free public transport is limited to Maltese citizens, EU citizens resident in Malta and long-term residents. MPRP permanent residence is not automatically long-term resident status, so MPRP families pay the fare unless they also hold that status. The speech sets no fare; the 2027 fares are yet to be published.
What is long-term resident status, and is it automatic after five years?
It is the EU long-term resident status under Directive 2003/109/EC, granted in Malta under the Status of Long-Term Residents (Third Country Nationals) Regulations (S.L. 217.05) through Identità. It requires five years of legal and continuous residence immediately before the application, stable and regular resources, accommodation, sickness insurance, and the integration measures in those Regulations, currently a cultural integration course and a Maltese language requirement in the form Identità publishes. Not every residence permit counts towards the five years. It is applied for and assessed; it is not automatic. It also changes the holder's tax position: worldwide income becomes chargeable in Malta at the ordinary rates, with treaty relief, and any special tax status ceases.
Does the €83 monthly licence fee apply to Americans, Canadians and other non-EU nationals?
As announced, yes, unless they hold long-term resident status or a permit for driving-related work. The exemptions named are EU and EEA citizens, long-term residents and their spouses, and citizens of the United Kingdom, Australia and the United Arab Emirates. No other nationality is named.
Which driving licences does the €83 fee apply to?
Category B, the ordinary car licence for vehicles up to 3,500 kg with no more than eight passenger seats, and category B1, which covers quadricycles, when issued or renewed from 1 January 2027. The speech names no other category.
Does Budget 2027 change the MPRP, the Nomad Residence Permit or the ITP?
No changes were specified. The Budget speech did not mention the MPRP's fees and thresholds, the Nomad Residence Permit, the ITP's commencement on 1 January 2027, or the 31 December 2026 deadline for applications under the existing special tax status programmes.
Will my free childcare stop?
No, if your family is already in the Free Childcare Scheme; you keep it until your children age out. New entrants from 2027 must be Maltese citizens, EU citizens resident in Malta or long-term residents.
I am resident in Malta but not domiciled here. Does the Budget change my tax?
No. The remittance basis, as set out in the MTCA's published guideline, stands: income arising in Malta is taxable wherever it is received, income arising outside Malta is taxable to the extent that it is received in Malta, and capital gains arising outside Malta are not taxable even if received in Malta. The widened family bands apply to that taxable income from 2027.
When do the Malta Budget 2027 measures take effect?
The transport, licence, childcare and permit measures were announced for January 2027. Further details on the measures will be updated here once officially published.
This note is provided for general information only. It does not constitute legal or tax advice, nor does it create a lawyer-client relationship. It summarises the measures as announced in the Budget speech of 26 October 2026, checked against the speech as published by the Ministry for Finance, before publication of the implementing legislation; legislation, guidelines and official practice may change, and where anything in this note and the legal texts differ, the legal texts prevail.
About the author. Dr Russell Attard Baldacchino LL.B., M.Adv. (Melit.) is an Advocate registered on the Malta Register of Legal Professionals; a Residency Malta Agency Licensed Agent, licence RES-BALD, on the Residency Malta Agency list of Licensed Agents; an Authorised Registered Mandatory with the Malta Tax and Customs Administration, ARM04271, on the MTCA register; and holder of Malta Real Estate Agency Licence EA-00174-24, verifiable on the Real Estate Licensing Register. Attard Baldacchino, 6 Susan Court, Triq il-Prinjolata, Ta' Xbiex XBX 1130, Malta.
Sources: the Budget 2027 speech as published by the Ministry for Finance, 26 October 2026 (finance.gov.mt, Diskors tal-Budget 2027, in Maltese); the Status of Long-Term Residents (Third Country Nationals) Regulations (S.L. 217.05) and Identità's long-term residence page; the Free Movement of European Union Nationals and their Family Members Order (S.L. 460.17); the Malta Permanent Residence Programme Regulations (S.L. 217.26); the Malta Residence and Visa Programme Regulations (S.L. 217.18); the Single Application Procedure Regulations (S.L. 217.17); the Global Residence Programme Rules (S.L. 123.148); the Individual Tax Programme Rules (Legal Notice 195 of 2026); the Nomad Residence Permits (Income Tax) Rules; the Income Tax Act (Cap. 123) and the Malta Tax and Customs Administration's published tax rates for 2026 and guideline on the remittance basis of taxation; Transport Malta's driving licence pages; Jobsplus's Free Childcare Scheme and Atypical In-Work Benefit Scheme pages.
