Malta has unveiled its 2026 budget, focusing on boosting family incomes, incentivising business innovation, and building long-term economic resilience. This year’s budget introduces generous tax cuts, improved social benefits, and targeted investment in digital transformation and AI.
Main Points of Malta’s 2026 Budget
1. Tax Cuts for Families & Parents
- Parents will benefit from a landmark three-year tax reduction plan, saving up to €2,400 per parent annually.
- Family and child allowances are increased, with low-income families eligible for extra benefits.
- First-time buyers can access housing grants worth €1,000 per year for up to ten years.
2. Business Innovation & Investment Incentives
- €50 million allocated to support business, including wage subsidies and investment grants.
- MicroInvest tax credits raised to €65,000 for Malta-based SMEs, €80,000 for Gozo.
- Qualifying automation and digitalisation investments get up to 60% tax credits.
- R&D projects can deduct 175% of eligible costs from taxable income.
- New legal provisions granting businesses the right to open bank accounts.
3. Pension Upgrades & Social Support
- Pensions rise by €10 per week, with cost-of-living adjustment (COLA) supplementing an extra €4.66 per week.
- Enhanced children’s allowances and social housing supports.
4. Asset & Inheritance Tax
- The first €400,000 of inherited estate is subject to only 3.5% tax, easing the burden for many families.
5. Digital & Technology Investment
- More than €100 million invested in artificial intelligence, blockchain, and digital infrastructure.
- Youth training, sports funds, and “digital packs” for students encourage upskilling and social mobility.
6. Fiscal & Macroeconomic Stability
- Projected budget deficit trimmed to 2.8% of GDP.
- Debt ratio expected to remain stable at 46–47%, well within EU thresholds.
7. Sustainable Tourism & Environment
- Eco-tax for tourists increased to €1.50 per night to fund infrastructure and environmental initiatives.
Table: Malta Budget 2026 at a Glance
| Measure | 2026 Highlights |
|---|---|
| Family Tax Cuts | Up to €2,400/year per parent. Extended housing grants. |
| Business Incentives | Higher MicroInvest credits. Automated tech tax relief. |
| Pensions/Benefits | +€10/week pensions, COLA, social housing boost. |
| Asset Taxes | 3.5% on first €400,000 inherited estate. |
| Digital/AI | €100M+ for AI, blockchain, youth tech training. |
| Fiscal Target | Deficit: 2.8% GDP; Debt: ~47% GDP. |
| Tourism/Environment | €1.50/night eco-tax; public spaces upgrades. |
FAQs: Malta Budget 2026
Q1: Who benefits most from Malta’s 2026 budget?
A: Families, parents, small business owners, startup entrepreneurs, and pensioners all see direct benefits.
Q2: Are there new incentives for digital and tech companies in Malta?
A: Yes. Companies investing in AI, automation, and new tech can claim significant tax credits and deductions.
Q3: How have pension rates changed for retirees?
A: State pension rises by €10 weekly, along with cost-of-living increase of €4.66 weekly.
Q4: What are the new housing and child benefits?
A: Housing grants for first-time buyers extended, child allowance and social supports raised—especially for low-income families.
Q5: How does the budget support business innovation?
A: €50 million is earmarked for business investment, R&D projects enjoy extra tax benefits, and new banking access rights encourage foreign investment.
Q6: Is there any change in inheritance tax?
A: Yes, the first €400,000 of an inherited estate is now taxed at a reduced 3.5% rate.
Q7: What is Malta doing for sustainability and tourism?
A: The eco-tax is increased to fund environmental improvements, with investments targeting green infrastructure.
Q8: How stable is Malta’s fiscal position?
A: Malta’s deficit and debt ratios stay well below EU thresholds, ensuring long-term fiscal sustainability.
Finally…
The Malta Budget 2026 prioritises families, future-facing businesses, social fairness, and digital transformation. If you’re considering Malta for business or relocation, the new tax incentives and forward-thinking policies make it more attractive than ever for expats, entrepreneurs, and families alike.
Want individualised budget impact analysis for your business or family situation? Contact our expert advisory team for a personal consultation.
