Budget 2026 Summary | Zampa Partners

Malta Budget 2026 zampapartners.com

2

Table of Contents Introduction

04

Economic Overview

05

Fiscal

06

Family Support Measures

08

Pensions

10

Other Social Measures

12

Environment, Infrastructure & Transport

14

Businesses, Grants & Funding

16

Immovable Property

17

Digitalisation

18

Contact us

19

3

Introduction On Monday, 27 October 2025, Malta’s Budget for 2026 was presented to Parliament by the Hon. Clyde Caruana, Minister for Finance. The Budget sets out government priorities for the year ahead, maintaining economic stability, safeguarding households and businesses from cost pressures, and directing investment towards competitiveness, skills, and the digital and green transition. It outlines measures intended to sustain growth, with an emphasis on efficiency, productivity and long-term resilience.

4

Economic Overview GDP is up 3.1% this year in real terms, more than double the EU average.

The economy is expected to reach 4.1% growth by end of year.

For 2026, the government expects GDP to grow at a similar rate, fuelled by domestic demand and public investment.

Inflation is forecast to stabilise at around 2.2%.

5

Fiscal Incentives Beneficial tax-free bands for parents applying the parent tax computation

6

Tax-free bracket

1 child

2 or more children

2025 (current)

€13,000

€13,000

2026

€14,500

€18,500

2027

€16,000

€24,000

2028

€18,000

€30,000

Beneficial tax-free bands for parents applying the married tax computation

Tax-free bracket

1 child

2 or more children

2025 (current)

€15,000

€15,000

2026

€17,500

€22,500

2027

€20,000

€30,000

2028

€22,500

€37,000

7

Family Support Measures Self-employed

persons

to

benefit

from

Parental

Leave,

Bereavement Leave and Miscarriage Leave as of 2026.

Increase of €500 to birth/adoption bonus, meaning €1,000 for the first child, €1,500 for the second and €2,000 for the third child and beyond.

An increase of €10 per week in the allowance for widows who are still raising children (up to 23 years of age). Additional allowance of €500 for families with children in post-secondary education.

The reimbursement of expenses for adoptions will rise to €2,000 if local and €12,000 if from abroad. Whilst there will be an increase of €10 per week in the Fostering Allowance, rising to €6,760 per year.

Parents who stop working to raise children get social security credits until the child turns 6, or 10 in cases of disability, rare disease, or families with three or more children, with an extra year added for each child beyond three.

8

Parents who stop working for a period to raise their children are granted social security credits until the child reaches the age of 6, or age 10, in the case of a child with a disability or rare disease.

Eligibility will be extended to 10 years of age for those with three children in the family. An additional year of credits will be added for each additional child.

Children’s Allowance for families earning less than €30,000 will increase by €250 per child.

9

Pensions Pensions to increase by €10 per week.

Widows’ pensions to increase by an average of an additional €3.50 per week.

Non-Pensioner Bonus to increase by €50. The annual bonus will now range from €600 to €1,050 depending on the years of contributions paid.

Pensions will remain tax-free. As of 2026, double the equivalent of the maximum pension will be exempt from taxable income to cater for those pensioners who are still in employment or earn income from another source.

An increase of €75 in the grant paid to elderly people living in their homes or with relatives and to those live in private care homes. The grant will now reach €425 for those aged between 75-79 years and €525 for people aged 80 and over.

For couples in government nursing homes, the pension deduction will be eased. It will decrease from 60% to 50% and from 80% to 70% of total pension received.

10

11

An increase in tax deduction for the cost of nursing homes or respite care for people with disabilities from €2,500 to €4,500 to better support those who choose private facilities.

Pensioners born before 1962 and impacted by an anomaly introduced when pensions were reformed 20 years ago will receive an adjustment.

An increase in the subsidy rate for the “Home Helper of Your Choice” scheme from €9 per hour to €10 per hour.

The “Carer at Home” scheme will be increased by an additional €500 bringing the annual benefit to €9,000 per year.

11

Other Social Measures COLA is set to €4.66 per week An increase in stipends of 15%.

Free gym membership scheme extended to those born from 2004-2009.

Gozitan students who wish to attend post-secondary or tertiary education in Malta will receive an allowance of €280 per month.

The Carers’ Grant will increase by €179.24, reaching €5,368.89 per year.

Increase of €10 per week in the allowance paid to individuals dependent on drugs, undergoing a rehabilitation program. Once they

have

completed

the

programme

and

find

stable

employment, they will then be entitled to four years of accredited social security contributions. Their employers will be exempt from paying their social security contributions for two years.

12

Both, employed and self-employed persons may make payments for missing social security contributions so that when they retire, they are eligible for a contributory pension or can improve their pension rate. The scheme allows for payments of up to a maximum of 5 years of contributions as long as the person is still working and is between the ages of 59 and 64.

13

Environment, Infrastructure & Transport The government has introduced a €13.5 million framework agreement to support the development of open public spaces, pedestrian zones, streets, and pavements.

An estimated investment of €6 million will be allocated for the construction of jogging and cycling tracks as part of further enhancements to Ta’ Qali National Park.

14

11

Young people up to 30 years old can renounce their license for a €5,000 annual grant for 5 years.

Continuation of electrical car grants, car scrappage scheme and introduction of new grants for motorcycles.

Grant of €1,500 per year for those who give up their car license to use a motorcycle instead.

A new promenade and fast ferry terminal is under development under the Marsaskala regeneration.

Three new fast ferry routes: Tas-Sliema – Buġibba – Gozo Marsaskala – Valletta All part of the Tal-Linja bil-Baħar service.

11

Businesses, Grants & Funding The reduced stamp duty rate of 1.5% on the succession of shares in a family business will be extended for a further year.

Consultancy

grants

in

connection

with

governance

and

succession will be extended.

Training vouchers for the next generation of leaders in a family business.

Increase in Eco-Tax from €0.50 to €1.50 per tourist per night.

Tax credit of 60% of amount of investment on purchases made by businesses (machinery, IT infrastructure, cybersecurity etc).

The Micro Invest scheme will be further strengthened by including investment in digital solutions. Tax credits will increase to €65,000, covering up to 65% of eligible costs. The 20% bonus for Gozo-based enterprises will remain, while total aid for specific business categories can reach up to €85,000.

For employers with workers who have been employed with them for more than 4 years, the Government will finance 65% of their pay increase for two years, capped at €780 per year. For Gozitan employers, this support rises to 80%, capped at €960 per year.

16

Immovable Property Persons that inherit property that is already being used as their residence will now pay a reduced rate of 3.5% on the first €400,000.

The first-time buyers grant of €1,000 per year for 10 years has been renewed for a subsequent year, whilst the duty exemption on the first €200,000 of the buyers first property has been permanently included in domestic legislation The scheme to help first-time buyers cover the 10% deposit will be extended to property valued up to €250,000 from €225,000.

11 17

Digitalisation Free AI courses, national certifications, and practical sessions for all age groups. Free subscription to a leading AI service upon course completion.

Expected investment of €100 million for the digitalisation and adoption of various technologies including AI, IoT, cybersecurity, AR/VR, blockchain, robotics via Malta Enterprise, MDIA, EU funds.

Accelerated reduction in tax over two years for investments related to AI, digitalisation and modernisation.

A tax deduction of 175% on eligible research & innovation expenditure, to encourage companies to continue investing in technology.

18

Contact us

Mark Wirth

Markita Falzon

Partner

Tax Leader

mark@zampapartners.com

mf@zampapartners.com

19

Malta Budget 2026

230, Works Business Centre Second Floor, Eucharistic Congress Road Mosta | Malta MST 9039. +356 2235 0000 info@zampapartners.com

zampapartners.com