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Budget 2026 Highlights

BUSINESSES

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  • Micro Invest scheme will be strengthened, now covering digital solutions, increasing tax credits to €65,000 (65% of eligible costs), keeping the 20% Gozo bonus, and allowing total aid up to €85,000, promoting capital investment and competitiveness.

  • A 60% tax credit on investments in machinery, tools, IT software, electronics, and cybersecurity solutions, spread over four years.

  • Malta is expanding support for start-ups with B-Start (seed capital), Start-up Finance (repayable loans), and Accelerate (world-class accelerators).

  • Malta is supporting self-employed and small businesses with a scheme covering up to €300,000 to buy industrial garages. A new SME complex in Ħal Far is underway, while modern spaces for health, pharma, light industry, biotech, and marine biotech are being developed, creating a value chain from local ideas to international markets.

  • A Digital Identity Wallet by year-end, giving citizens and businesses a secure, easy way to share and verify digital IDs and certificates.

  • The eco-contribution will rise from €0.50 to €1.50 per tourist per night to fund infrastructure and environmental improvements.  New regulations are planned for short-term rentals.

  • Tax incentives are being accelerated for AI, digitalisation, automation, cybersecurity, and modernisation, while R&D and innovation spending will receive a 175% tax deduction to encourage consistent investment.

  • Extension of reduced stamp duty rate of 1.5% for family business transferred to next generation.

  • Financial support is being streamlined via the Credit Review Office and a Central Data Repository, with plans to make opening a bank account a legal right for businesses

  • INDIS will also release a policy for better use of industrial roofs and open spaces for solar panels, helping industry reduce energy use and invest in renewable energy.

  • A new free-zone logistics hub is being planned near the airport, potentially linked to the Freeport, boosting high-value maritime and aviation activity.

  • From 2026, cooperatives will be exempt from submitting audited accounts for tax purposes.

  • Malta enterprise will finance up to 65% of salary increases for long-serving employees, capped at €780 per year.

  • The eco-contribution will rise from €0.50 to €1.50 per tourist per night to fund infrastructure and environmental improvements.  New regulations are planned for short-term rentals.

 

EMPLOYMENT/PERSONAL TAX

  • Income tax brackets to be widened over three years for families having children.  Revised tax rates are:

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  • For 2026, the cost of living allowance shall be €4.66 per week and shall be given to all employees. 

  • In-work benefit to increase by €75 per child under 23 years old.

  • Employed or self-employed persons may retrospectively pay missing social security contributions, so they are eligible for a contributory pension or can improve their pension rate.​

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Image by Remi Yuan

PROPERTY RELATED MEASURES

  • Schemes for first-time buyers to be enacted as law to ensure its permanent effect.  Nikru biex Nassistu scheme will continue supporting tenants, while the First-Time Buyers scheme provides a €1,000 annual grant for ten years. 

  • Additional measures include rehabilitating vacant homes for social use, funding €2 million for lift installations, and exploring the extension of the Rent Subsidy Scheme to older private residences and farmhouses.

  • The Property Price Register will give the public comprehensive, real-time property transaction data for the first time in Malta.

  • The 10% deposit loan scheme will increase from €225,000 to €250,000

  • Separated individuals wishing to buy a home, the property limit will be increased to €350,000.

  • People inheriting a property that is already being used as their residence to pay a reduced rate of 3.5% on the first €400,000.

  • Sustainable Property Purchase scheme and Irrinova Darek will expand, a new NGO renovation scheme will launch, and studies will explore energy-efficient buildings from 2030 onward.

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FAMILY/SOCIAL MEASURES

  • Stipends to increase by 15%

  • Pensioners will be given a COLA allowance of €10 weekly.  

  • An additional €3.50 per week to be given to widowed pensioners.

  • Carer grant for non-working parents of children with severe disabilities to be increased to €5,368.89.

  • Children allowance will increase by €250 per child.  Parents earning less than €23,000 per year, may receive an additional allowance of up to €167.

  • The Birth and adoption bonuses to be increased to €1,000 for the first child, €1,500 for the second child, and €2,000 for the third child and subsequent children.

  • From January 2026, subsidies under the Home Helper of Your Choice will rise from €9 to €10 per hour, and the Carer at Home scheme will increase by €500 to €9,000 per year.

  • The weekly allowance to foster parents will increase by €10 per week, i.e. €6,760 annually for each fostered child.

  • A scheme to encourage children of Maltese expats to come study or work in Malta. It will target people aged 18 to 30 whose Maltese parents live abroad. 

  • The Energy Benefit, with the income threshold increased by an additional €2,500 for couples.

  • Increase in the adoption grant. The reimbursement for adoption expenses abroad will rise from a maximum of €10,000 to €12,000. For local adoptions, reimbursement will increase from €1,000 to €2,000, of which €500 will be given as a grant.

  • Pensioners will not pay tax on the equivalent of the maximum pension, including bonuses.

  • Elderly persons residing in care homes pay a portion of their pension, depending on the level of care, ranging from 60% to 80% of the pension and 60% of additional income.

  • Those born between 2004 and 2009 will get a free 6 month gym membership.

  • The government will be launching “AI for Everyone”, offering free courses, national certification, and practical sessions for parents, students, workers, and seniors. Graduates will receive a free AI service subscription (e.g., ChatGPT or Gemini) to integrate AI tools into daily life, with the program starting early next year.

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​GREEN MEASURES

  • Plans to make buses all electrical in Gozo.

  • Schemes for people to invest in solar panels, heat pumps, solar water heaters, well restoration and water filtering systems.

 

CAPITAL INVESTMENT

  • A land reclamation project at the Freeport to create industrial space and relocate commercial activities for better community use.

  • A caravan site in Mellieħa's Aħrax will be upgraded, while a new, as-yet unnamed campsite somewhere in the north will be opened.

  • There will be a public call for offers to build a sound stage at Malta Film Studios

  • Animal hospital to open in the next weeks.

  • Apart from the completion of the Msida Creek flyover project, you can expect works to develop water reservoirs and a jogging track in Ta’ Qali and the start of a “massive” project to regenerate the BirżebbuÄ¡a promenade.

  • Work on a ferry terminal in Marsascala to commence.

  • Works on the National Motorsport Centre to commence in 2025.

  • Plans to rebuilt roads in Rabat and Nadur, Gozo.

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