Malta Budget 2026: Key Highlights for Businesses & Families
The Minister for Finance presented Malta Budget 2026 on 27 October 2025. For businesses and households, the announcements bring changes to payroll costs, family taxation and investment support. Our overview explains the key figures and practical steps to consider.
Malta Budget 2026 at a Glance
COLA: €4.66 a week for 2026.
Families: higher tax-free thresholds for eligible parents.
Businesses: expanded MicroInvest and digital investment incentives.
Pensioners: a €10 weekly increase announced.
Economic Outlook
The Government forecasts real GDP growth of 4.1% in both 2025 and 2026, with inflation around 2.2%. The deficit is projected to fall to 2.8% of GDP in 2026.
For your business: use these forecasts as context, then build your cash-flow plan around your own sales pipeline, costs and borrowing commitments. A positive national outlook does not remove the need for a realistic contingency allowance.
Employers & Payroll
COLA and Employment Planning
The weekly cost-of-living adjustment for 2026 is €4.66. Employers should prepare their January payroll and check applicable wage orders before finalising employment budgets.
Enhancements to family leave, including neonatal care and miscarriage leave, are planned. Employers should monitor implementing rules before changing policies.
Next step: review payroll settings, employee records and leave procedures together. Keep a clear distinction between mandatory COLA and any separate discretionary salary increase.
Individuals & Family Tax
New Tax-Free Thresholds for 2026
The announced family tax changes introduce the following tax-free bands for eligible households:
These figures show where tax starts, rather than a cash amount paid to the household. Income above the relevant band is subject to the applicable higher brackets. Married and parent computations have different rules, so their thresholds should not simply be added together. A child’s age and education status can also affect the family category that applies. Before revising your household budget, compare the appropriate computation using expected annual chargeable income, rather than monthly take-home pay alone.
Tax computation | One child | Two or more children |
Married rates | €17,500 | €22,500 |
Parent rates | €14,500 | €18,500 |
These are income tax bands, rather than cash grants. The applicable computation depends on eligibility and the number of qualifying children. Further improvements are announced for 2027 and 2028.
Next step: check which tax computation applies before estimating your saving. Employers should obtain up-to-date employee declarations rather than assume that every parent qualifies automatically.
Business Support & Investment
MicroInvest and Wage Support
MicroInvest is to cover digital solutions, with credits of up to €65,000 and enhanced limits for certain categories. Wage support is announced for employees with more than four years’ service, subject to caps.
Digitalisation and Innovation
Announcements include two-year accelerated deductions for eligible technology investment, a 175% deduction for qualifying research and innovation, and a 60% investment tax credit spread over four years.
Next step: list proposed equipment, software and research expenditure, then check each scheme’s eligibility, application window and interaction with other aid before committing. A deduction and a tax credit affect your tax bill differently; headline percentages should not be compared on their own.
Property & Tourism
Home Buyers and Inheritance
First-time buyer duty relief is to become permanent and extend to certain buyers who previously owned non-residential property. The reduced 3.5% inheritance duty band for an inherited home already used as the heir’s residence rises to €400,000.
Tourist Accommodation
The tourist eco-contribution is announced to rise from €0.50 to €1.50 per night.
Next step: buyers should confirm relief conditions with their notary. Accommodation operators should check the commencement date and collection rules before updating booking systems and guest pricing.
Social Support & Sustainability
Pensions and Family Support
The Budget announces a €10 weekly pension increase, birth bonuses of €1,000, €1,500 and €2,000 for successive children, and a care-fee tax deduction increased to €4,500.
Energy and Green Investment
Stable utility and fuel prices remain a policy priority, alongside continued schemes for renewable energy and energy efficiency.
Next step: assess grants and tax relief separately when planning care or home improvements. Keep invoices and supporting records from the start so any application can be supported.
How BGMT Can Help
Turn the announcements into a plan for your business or household. BGMT can help you review payroll, assess investment incentives and understand your personal tax position. Contact us to discuss the measures relevant to you.
This overview reflects Budget announcements made in October 2025. Implementation remains subject to legislation, scheme guidelines and eligibility conditions.
Read the full budget speech here:
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