This scheme will apply to any promise of sale or transfer concluded before 31 July 2021, provided that the final transfer is made before 31 January 2022:
- that the applicable rate of tax will be calculated at 1.5% on the first €400,000 of the greater of the consideration and the market value of that property, with the remainder calculated at the applicable rate of tax (normally 5%, unless it qualifies for another reduced rate).
- the final property tax rate (on the side of the transferor of the property) is reduced to 5% on the same first 400,000 euros, the excess value being taxable at 8% or 10%.
In addition to this temporary measure, Maltese law also provides for a number of schemes to reduce duties on the acquisition of property including
First time buyers' scheme: This measure applies to all first-time buyers until the end of 2021: purchases are exempt from duty on the first €200,000 (or a proportional part in case of joint purchase).
To be applicable, the acquisition must be made for the purpose of establishing an ordinary residence, the purchaser must not require a permit under the Real Estate Act and the relevant form must be submitted to the tax authorities by 28 February 2022.
Second Time buyer’s scheme: Where an individual transfers his residential immovable property (replaced property) and acquires another residential immovable property (replacement property) within 12 months from the date of transfer of the replaced property, the duty paid on the first €86,000 of the value of the replacement property shall be refunded.
Residential property in Gozo: For any acquisition in Gozo (residential property or garage or land on which the residence will be built) a reduction in the rate of tax from 5% to 2% on the higher of the consideration or the value of the property is provided.
Urban Conservation Area (UCA) Property Scheme: Until 31 December 2021, the incentive provides for a reduction in the rate of tax from 5% to 2.5% on the greater of the consideration or value of the residential property acquired located in an UCA or a property scheduled by the planning authority.
For more information, please contact our office in Malta: office@rosemont.com.mt
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