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Malta's Special Designated Areas have played a major role in the Islands' exponential growth in residential and commercial real estate over the past years. The market is stronger than ever, reflecting the country's continued appeal to foreign investors.
What Makes Malta Appealing to International Investors
For decades, the Mediterranean island of Malta has combined a stable political environment, EU membership, English-language services, excellent weather all year round and a favourable tax and legal regime to attract wealthy individuals and international investors.
Malta has certainly banked on the much-enhanced interest, all the while slowly generating a more attractive real estate market to further add to its portfolio.
Whereas it is widely known that real estate is one of the most solid investments one can think about, what does it add to prospective foreign nationals seeking residence in Malta?
What Are Special Designated Areas (SDAs)?
Special Designated Areas (SDAs) are essentially government-approved qualifying property development zones. These developments are rigorously regulated to ensure the highest of standards, transparency and security.
SDAs have proved to be very highly sought-after by international investors for a number of reasons.
Benefits of Buying Property in a Special Designated Area
- SDAs are typically found in prime and desirable locations across Malta and Gozo, enhancing investment and resale value;
- Properties featured in SDAs boast very high standards – luxurious finishes, modern living, premium amenities and most often leisure facilities, thus enriching the residents' quality of life and offering an element of exclusivity;
- Foreign investors are not limited in property acquisitions in SDAs, especially when compared to other properties across the Islands which would require an Acquisition of Immovable Property permit (AIP); thus leaving the door open for flexible investment options.
How SDAs Ownership Aligns with Malta's Residence Programmes
Malta has seen a rise in its appeal to High-Net-Worth Individuals (HNWIs), especially through the implementation of hugely popular residence and tax programmes, and formerly also the citizenship via investment scheme.
SDA ownership dovetails with residency in Malta, owning or renting a qualifying property in Malta's Special Designated Areas often satisfies real estate requirements for certain migration schemes. This in turn attracts investors whose goals are much more focused on personal mobility and lifestyle. Malta has in fact seen an exponential number of international investors engaging in residence schemes, and most notably the Malta Permanent Residence Programme (MPRP), with the goal of building tangible ties to the jurisdiction.
International investors seeking residence in Malta will benefit from having access to the EU through a Mediterranean base which also offers them all the luxury and comfort that they demand. This combination – easy acquisition of immovable property coupled with migration utility – amplifies the demand for high-quality residential options.
The Role of Location and Lifestyle in Attracting HNWIs
The MPRP has been largely successful over the years in attracting HNWIs to the Maltese islands. Over the years Malta has learned that higher-quality clients mean higher expectations and elevated demands, which is precisely where SDAs have excelled.
The SDA client can be broadly profiled into specific clusters. International HNWIs from Europe, Middle East and North Africa have identified Malta as their ideal Mediterranean hub for addressing their business needs. Holders of Maltese residence have been benefitting from visa-free travel throughout the Schengen zone – a prospect which is highly enticing for the dynamic entrepreneur and financier.
Some SDAs are strategically positioned close to marinas, international schools, business and networking hubs. They have become a brand in themselves, one only needs to look at the Portomaso Marina or Mercury Towers developments to understand the importance of having premium amenities available to the higher-end resident.
HNWIs holders of Maltese residence or even citizenship cherish the significant importance of logistics. Even though Malta is a very small island in the middle of the Mediterranean, life on the Islands moves at a very fast and busy pace. Entrepreneurial residents have identified the strategic location of these SDAs as their hub for networking and business accomplishments.
The attractiveness of these locations carry with them a higher-than-average return per square meter, especially when compared to the national average housing prices. Waterfront SDA developments have proved to be exceptionally popular with the higher-end investor seeking a home away from home, a luxury retreat or a place to truly call home when relocating to Malta.
The Bottomline: Malta's SDAs as the Core of Luxury Real Estate
Malta's Special Designated Areas have become a linchpin in the expansion of Malta's luxury property portfolio. They have proved to be extremely attractive to HNWIs resident, or planning to relocate, in the jurisdiction.
Such high-quality developments offer a frictionless route to Mediterranean living which is deeply sought by EU and non-EU nationals. The benefits of SDA ownership is evident, and remain one of the most effective ways Malta converts its geographic advantages into real estate value that appeals to international markets.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
