UPDATED: Fiscal incentives for property buyers and sellers: Stamp duty reduced to 1.5%; final withholding tax to 5%

UPDATE: The government plans to extend again the measure which reduced stamp duty to 1.5%. Acquirers will have until the end of July to sign a promise of sale and benefit from the reduced rate.

We’ll keep you posted about further announcements.

The government announced temporary financial incentives for Maltese property buyers and sellers as part of a COVID-19 economic recovery package launched on 8th June 2020.

Legal Notices 240/2020 and 241/2020, concerning the payment of stamp duty and property transfer tax, provide for the following revisions to the fees that must be paid for contracts that occur by 1st April 2021:

  • Property buyers will see their stamp duty reduced to 1.5% from the present rate of 5%. Schemes that are currently in existence (such as First Time Buyers and UCA Scheme) can be used in conjunction with this rate of stamp duty.
  • Property sellers will pay a final withholding tax of 5%, a decrease from the 8% / 10% tax currently in place.

These reductions apply to property values up to a maximum of €400,000.

Properties valued over this amount will have the reduced rates applied to the first €400,000. Any fees due over and above this amount will be calculated at the normal rates.

Donations of immovable property (under Article 32C of the main Act) are not subject to the revised stamp duty rates.

The new measures apply to transfers of immovable property made on or after the 9th June 2020, but before 1st April 2021. These transfers will qualify for the reduced rates if the notice of the final deed is given to the Commissioner for Revenue by 30th April 2021.

In a related announcement, the government said it will also amend the First time Buyers Scheme so that people who had previously bought any property that doesn’t constitute a residence (e.g. a garage) will be able to qualify for this scheme when purchasing a new home.

Resumption of Legal Times for Promise of Sale Agreements(konvenji)

The order for the indefinite suspension of promises of sale has been revoked according to a legal notice published this morning by the Ministry of Justice, Equality and Governance, and the Superintendence of Public Health. This new directive is effective immediately.

All agreements have had their validity extended by 20 days.

Moreover, to ensure a more streamlined return to normal of notarial work, contracts will be extended by an additional period calculated on the number of days between the beginning of the suspension on 16th March 2020 and its lifting today or the contract’s expiry date, whichever comes first.

  • Example 1: A promise of sale that expired on 16th March 2020, will only be extended by the 20 days provided for by the legal notice.

  • Example 2: A promise of sale that expired on 6th April 2020, will be extended by the number of days elapsed from the start of the suspension—21 days—and an extra 20 days, for a total of 41 days from the 22/05/2020 (the day the suspension was lifted)

  • Example 3: A promise of sale that hasn’t expired yet will be extended by the entire duration of the suspension—67 days—and an extra 20 days, for a total of 87 days from the expiry date.

Due to remaining COVID-19 restriction measures and the backlog of contracts accumulated, it is expected that banks will offer limited appointments for the signing of contracts in the foreseeable future.

Clients are advised to refer to the terms of their loan agreements and contact their bank in case of any difficulty.

COVID-19: Suspension of legal times relating to promise of sale agreements, notarial and related matters

In response to the COVID-19 coronavirus outbreak in Malta, the Government has taken several legal measures to fight the effects of this infectious disease. One of these measures was an order for the closure of the courts from Monday, 16th March 2020, through Legal Notice 65 of 2020.

In addition to the closure of the courts, the Government, after discussions with the Notarial Council, has also suspended the legal times relating to promise of sale agreements, notarial, and other related matters, via Legal Notice 75 of 2020 published on Tuesday, 17th March 2020.

These steps have been taken to safeguard the rights of clients that use the services of a notary public and supposedly to attempt to reduce the number of people gathering in crowded rooms to sign contracts.

According to the legal notice:

The Superintendent of Public Health has made the following order…

the suspension of the running of all the legal terms imposed on a notary public by law to register any deed, will, act or private writing…

or any period within which the notary public, in terms of any applicable law, has to pay taxes collected by him in the exercise of his profession.”

Read the legal notice here

The effects of this notice are summarised below:

  • Suspension of the terms applicable by law for the notary public to register public deeds, wills, and private writing.
  • Suspension of the terms during which the notary public must collect taxes, as well as of fiscal benefits, incentives or other exemptions.
  • Suspension of the obligations on the notary public to provide information or documentation to authorities or regulators.
  • Suspension of the terms on all promises of sales that have already been registered with the Commissioner of Revenue. This does not require the signatures of the parties involved.
  • The suspension shall last until twenty days after the repeal of any such order by the Superintendent of Public Health.

The summary is also available in Maltese below:

During the time the courts are closed, and for twenty days after their reopening, the term of a promise of sale agreement is to be considered paused or suspended.

If your promise of sale is due to expire on the 8th of May, one has to count the number of days from the 16th of March (i.e. the day of the order of closure of the courts) that works out to 53 days and add another 20 days to that number for a total of 73 days.

This period will start running from the day when the courts re-open. Therefore, the promise of sale described above would be valid for an additional 73 days from when court re-opens.

Following this order, the Notarial Council, in these unprecedented circumstances, exhorts all Notaries to follow the health authorities’ recommendation of extended social distancing, in the greater interest of public health, and only perform strictly necessary services which cannot admit of delay.

Summary of Gov’t White Paper about Rental Market 2018

In October 2018, the Parliamentary Secretariat for Social Accommodation within the Maltese government published a 40-page white paper titled Renting as a Housing Alternative, which aimed to offer “a carefully studied approach that [provides] landlords and tenants with greater stability and security.”

This article summarises the content of the white paper and highlights the most important changes being suggested to improve management of the Private Rental Sector (PRS).

Changing society, changing households

“Homeownership [is] still perceived as an ideal in our society, [but] there are serious social indicators and cultural shifts which are pushing locals into rented accommodation.”

Recent data about the rental market confirms that the tenant population in Malta has risen significantly in recent years and that current developments in the property market are pointing towards decreasing affordability.

The white paper lists five social, political and economic forces that may explain this phenomenon:

  1. Gentrification
  2. Homelessness
  3. Shared housing
  4. Unhomeliness, transience and anxiety
  5. Employment instability

The document also lists nine shortcomings of the current regulatory system:

  1. Rental agreements are generally offered from six months to one year
  2. Agreements do not always foresee the possibility for renewal
  3. Notice periods are too short to enable tenants to find alternative accommodation
  4. No national register for agreements
  5. No draft contract template that ensures legal conformity
  6. No entity capable of deciding minor issues quickly
  7. No Tenancy Deposit Scheme which protects deposits and ensures a timely return
  8. No system or guidelines to manage Housing in Multiple Occupancy (HMOs)
  9. No entity to inform landlords and tenants of their rights and responsibilities

The Maltese regulatory framework from a comparative European perspective

Rent-regulating mechanisms are being revised across most European countries as the intensifying demographic pressures is threatening housing affordability and stability.

State intervention in the PRS is neither contrary to the European Convention on Human Rights nor any European Union instrument. The belief that government intervention in the PRS leads to its paralysis is an erroneous one, which is readily dispelled by the experience of other European countries.

The negative Maltese experience with rent control mechanisms stems from the fact that Government had employed extremely strict measures in the past. Since the end of the 1980s, when the Maltese economy undertook a series of pro-market policies, there has been a general negative political attitude towards any form of government intervention.

The weakness of the current Maltese regulatory model when compared with the legal regimes in place in other EU countries reveals how Malta merely conceives rentals as a short-term tenure.


“Measures proposed for the regulation of the PRS should only be applicable to rental agreements negotiated for a primary residential purpose.”

  • Reform the regulatory framework so that it also covers particular instances of short-term agreements, e.g. temporary workers and students.
  • Manage the sector more effectively by promoting:
    • a minimum contractual term with periodical rent increases
    • the capping of increases during the contractual term
    • the optimisation of the rent subsidy scheme

“This White Paper puts forward two distinct frameworks, both aiming to promote a longer contractual duration for residential leases. The first framework proposes a mandatory minimum contractual duration (fig. A) whilst the second one presents a model where longer leases are promoted through fiscal incentives (fig. B).”


Contractual term

  • A standard minimum contractual duration of several years would go a long way in rendering leases a more stable tenure.
  • Medium-term contracts will not prejudice the landlords’ economic position; they are also compatible with the regular contracts of employment entered by foreign tenants as well as their average stays in Malta.
  • A longer contractual period would also allow local households to create homes in their rented accommodation.

Compulsory period for tenant and notice of withdrawal

  • Tenants should remain free to withdraw unilaterally from the contract, if they give due notice to the landlord and only after a minimum contractual period would have lapsed.

Notice of termination or renewal by landlord

  • The landlord would by not be bound to renew the lease; however, notice of termination must be given to the tenant by not later than a specified prior to the expiry of the agreement.
  • Failure to do so would result in the agreement being prolonged for a further term at the same conditions as the previous one.

Predictable rent increases

  • The Property Price Index (PPI) remains, for the time being, the most adequate tool to regulate increases, although government should additionally consider a cap beyond which rents would not be able to rise.

Measures to improve the functioning of the Private Rental Sector

“[During research,] both landlords and tenants expressed concerns on the poor management of the sector, starting from the formalisation of the agreement to the process of eviction in the case of contractual default.”

  • Amend laws to reduce court delays in the eviction process.
  • Submit a declaration of deposit and present an inventory with the contract.
  • Create a new public agency that oversees the registration and enforcement of private residential leases.
  • Optimise rent subsidy schemes by introducing individualised means-testing
  • Encourage payment by bank transfer, rather than in cash.
  • Give tenants direct access to the water and electricity services on their rented premises, as well as to their bills.

More affordable housing

“Beyond the measures designed to improve the management of the PRS, the ultimate solution to the rental problem lies in a stronger supply of affordable housing.”

“The most effective solution lies in the diversification of the housing market through limited profit or not-for-profit building.”

  • Give owners of vacant dwellings grants to carry out repairs and make the property habitable again.
  • Diversify the marketing with Third Sector Housing through limited-profit or not-for-profit entities tasked with constructing affordable housing on public land.
  • Real Estate Investment Trusts (REITs).

Other long-term measures

  • Identify a minimum habitability standard for rented properties.
  • Regulate houses in multiple occupation (HMOs), where many tenants are residing and living communally due to constraints.
  • Regulate estate agents and assessing which professional standards they are expected to meet.

You can read and download the full white paper at this link (opens PDF file).


New Office Opened in Valletta

The team at VMY is proud to welcome clients to our brand-new office at number 52, Old Bakery Street in Valletta. The opening of a second office was the culmination of almost three years of hard work to convert what was initially a disused and derelict building into a modern and comfortable workspace.

Preserving traditional Maltese architecture

We bought the property in September 2015 from a lawyer who also intended to use it as an office but never actually used it as such. The building is located at the middle of a street where all the major law firms in Valletta are situated, so it seems quite appropriate that this gem should also be considered a desirable location for a legal practice.

Even before we acquired this place, it already had somewhat of a reputation as a landmark in the area because it’s the tallest building in Old Bakery Street. Unfortunately, the building was abandoned and left to deteriorate for many years, and it was in a very bad state when we found it. The last time the building was used was by the owners of a cigarette factory around 40 years ago; fast forward to the present day, and all the apertures were broken, there was no functioning plumbing system, and a load bearing wall that was holding seven storeys had to be demolished.

Because of the huge amount of work it took just to make this building safe and prepare it for the installation of modern amenities, we had to keep this project under wraps and delay our move there for a long time. Once the structure was sound again, we immediately set to work preserving the traditional Maltese architecture that was present, including the typical stone walls and stone arches.

In keeping with the aesthetics of our Rabat office, we married the traditional look with modern features in the Valletta building too. The latter has since been converted into a clean and bright marble-clad space with various French eclectic touches.

Former home of Malta’s national poet

But the most surprising fact about Number 52 is that it used to be the home of Malta’s national poet, Dun Karm Psaila. It also apparently used to be known as no. 51, before the door changed to the present number.

Right above the building door, there is a marble plaque unveiled in 1967 that commemorates the fact that Dun Karm resided there for 26 years and wrote his first poems in Maltese while living there. This is also mentioned in Dun Karm’s biography by Ġużè Cardona, which points out that the poet rented an apartment in the building and spent a lot of time in solitude away from his friends and family. It was during this time that he wrote several of his famed poems like Quddiem Xbieha tal-Madonna and Il-Musbieħ tal-Mużew.

A humble gem shining with new purpose

The opening of the Valletta office marks a new chapter in the growth of VMY’s notarial practice. When we first began operating from the Rabat office, our scope was similar to other small, village practices that focus primarily on serving the legal needs of the people living in the surrounding community.

As our team grew and our clients’ needs increased proportionally, we started taking seriously the option of expanding to a more central location. Our new office at no. 52, Old Bakery Street in Valletta is at the heart of the nation’s legal and financial hub, which gives us a privileged position that lets us manage our work and serve our clients more efficiently.

We will still operate from the Rabat office a few days a week, however we heartily encourage our clients spread across Malta to take advantage of our new central location and come see us in Valletta.


Make a notary’s appointment here 

Malta Budget 2017 – Guidance Note on Acquisition of Residential Property in Gozo

Following the declarations made in the Budget Speech 2017 relating to the acquisition of residential property in Gozo, the following guidelines are to be followed:

In the case of a transfer of residential property situated in Gozo, the duty otherwise chargeable in terms of the Duty on Documents and Transfers Act (Chapter 364 of the Laws of Malta) shall be chargeable at the rate of two euro (€2.00) for every one hundred euro (€100.00) or part thereof of the amount or value of the consideration for the transfer of the property or the value of the property, whichever is the higher.


General Terms and Conditions to qualify for the benefit

1. The above-mentioned reduced rate of duty applies to a transfer of residential property in Gozo when:

i. The notice of the promise of sale agreement in relation to such transfer is registered with the Commissioner for Revenue on or after the 18th October 2016 but before the 1st January 2018;
ii. The final deed in relation to such transfer is registered with the Commissioner for Revenue by the 31st December 2018;
iii. No relief is claimed under article 32C of the Duty on Documents and Transfers Act.


2. The benefit granted under this scheme does not apply to acquisitions of property made for the purpose of demolition and the construction of more than one unit, or to acquisitions of property in the course of a trade or business.


3. The benefit granted under this scheme does not apply to acquisitions made by a body of persons.


4. Residential property includes a garage attached to or underlying such residence or a garage situated in the same block of residential apartments of which the residence forms part or a garage of not more than thirty square metres situated within five hundred metres of such residence or block of apartments, and acquired together with such residence on the same deed.


5. In the case of a transfer of land, the benefit under this scheme would only apply if one residential unit is to be built thereon. The benefit shall be forfeited in the case of a breach of this condition.


Promises of Sale made before 18th October 2016

Where a notice of a promise of sale or transfer relating to a residential property in Gozo has been registered with the Commissioner for Revenue before the 18th October 2016 and is either cancelled or expired after the said date, such notice shall be deemed to have been registered with the Commissioner before the 18th October 2016 if the said property is:

a) transferred to the same person or persons appearing on the said promise of sale which has been cancelled / expired; or

b) another property forming part of the same project or situated within the same building is transferred to the same person or persons appearing on the said promise of sale which has been cancelled or has expired.

Need help with Gozo property sale/purchase?

Contact Mizzi Young today!


This blog entry has been reproduced from this official Internal Revenue Department document.

Notaries Meet Citizens – Open Days. An Event Hosted by the Kunsill Nutarili ta’ Malta

kunsill open days



The Council of the Notariats of the European Union (CNUE) is co-ordinating events by a number of Notariats within member states of the European Union to commemorate the European Day of Civil of Justice, which is celebrated on 25 October.

For this day, the Commission and the Council invite the Member States and professional organisations to organise events around this date for European citizens

The Kunsill Nutarili ta’ Malta will be participating in this in this event by providing the opportunity for the general public to visit the Information Stands on

(i) Property Conveyancing;

(ii) Estate Planning and Succession and

(iii) Matrimonial Regimes

which shall be open for the general public on both days from 10am to 2pm at the Parliament Building, Valletta.


For more information on the Notaries of Europe Open Days and the events being organised, visit http://notariesofeurope-opendays.eu.


Property Measures in the Malta Budget for 2017

Budget night came and went, and left with it a raft of policies, tax breaks, funding opportunities, and new taxes. But, what of property? Dr Veronica Mizzi Young’s office scrutinised the budget document in order to list the below budget measures regarding property for 2017.


First time buyers’ schemes

The much loved first time buyers’ scheme has been extended to another year. This means that individuals or couples who purchase their first property in 2017 are exempt from paying stamp duty on the first €150,000 of value of the property they buy.


Urban Conservation Areas Scheme

Two new schemes are to be launched through which first-time buyers of property situated in Urban Conservation Areas and which requires restoration, or schemed buildings in Grade 1 or Grade 2 areas can get up to €100,000 on expenses incurred on restoration works.



Buying property in Gozo

Purchases of residential properties in Gozo will benefit from a stamp duty of 2% instead of 5%. This applies to purchases for whom a promise of sale is entered into during 2017, and which is registered with the Inland Revenue Department by end of December 2017, and is only applicable if the contract is concluded by end of 2018.

Buying property in Gozo in 2017? Benefit from a stamp duty of 2% instead of 5%

Buying property in Gozo in 2017? Benefit from a stamp duty of 2% instead of 5%


Temporary Emphyteusis

Those in possession of a temporary emphyteusis over property that has either expired or is due to expire, shall have their emphyteusis renewed under the same conditions, though such renewals are subject to a revisions of the payable ground rent.


Scheme for shops outside of Valletta

The scheme for shops located outside of Valletta will be relaunched and continued. It applies to government-owned shops held under a title of lease or emphyteusis. Current recognised tenants or third party operators can benefit from a 45 year temporary emphyteusis provided certain terms and conditions are satisfied.


Inheritance of property

Property inherited after November 1992 and which is being transferred using a judicial sale at auction shall now be taxed at a final tax rate of 7% instead of the current capital gains tax system.


Rental contracts

A new system governing rental contracts shall come into force in 2017, wherein all contracts of rent entered into for periods of 3 months or longer, including renewals, are to be registered with the Inland Revenue Department. Either the lessor or lessee may register the contract, though in cases of failure to register, the lessor will subject to penalties as expounded in the Income Tax Act.



We’re attempted to simplify the language and clearly explain the property policies and schemes as announced in the Malta Budget 2017. Of course, if you have any need for further explanation, contact us.


VMY Welcomes New Team Member Nicholas Schembri


Nicholas Schembri is a legal secretary and office manager who is dedicated to taking care of the administrative side of VMY Notary and ensuring that the office runs as smoothly as possible whilst making sure that VMY Notary clients get the best service.

Nicholas is currently reading for a Masters Degree in Business after realising his career path through his first full-time job as a clerk at MCAST where he was later promoted to a clerical officer in the Human Resources Department. Nicholas is a self-taught amateur pianist and when he is not working, he composes his own music and plays football.

You can reach Nicholas by email on: n@mizziyoung.com or on the following numbers: 21451880 / 79970162