budget 2017

October 31, 2016  by

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.

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October 18, 2016  by

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.

DSCF3649

 

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.

 

Conclusion

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.

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