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.
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.
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.