first-time buyers

October 12, 2021  by

Budget 2022 highlights for property buyers: UCA grants and tax cuts, extension of stamp duty reduction for first-time buyers

Yesterday, the Government announced its budget for 2022, and included among the new measures were several incentives aimed to stimulate the property market in Malta.

The budget speech also confirmed that the stamp duty exemption for first-time buyers on the first €200,000 of their property value will be extended once more.

Promoting the conservation of older buildings

One of the most notable measures introduced in next year’s budget is the exemption from capital gains tax and duty on the first €750,000 of the value of properties which:

  • were built over 20 years ago and vacant for more than 7 years
  • are located in an Urban Conservation Area (UCA)

This exemption shall also apply to new properties built in a typical and traditional Maltese style and architecture.

Qualifying properties for which a promise of sale (konvenju) has already been entered into shall also benefit from this measure as long as the final contract has not been signed yet.

New incentives for first-time buyers

First-time buyers who purchase properties qualifying for the scheme above can also apply for a grant of €15,000 to help restore their home, while buyers of similar properties in Gozo will receive a grant of double the amount at €30,000.

Moreover, current and prospective owners of qualifying properties may alsobenefit from a VAT refund of up to €54,000 on the first €300,000 spent on refurbishment works.

These measures will enter into effect from the 12th of October 2021 for a period of three years.

Other measures for property buyers

The government has also announced that it will extend again the stamp duty exemption offered to first-time buyers on the first €200,000 of the value of the property, while second-time buyers will benefit from a refund of duty on the first €86,000 of the new property (the first €150,000 for people with disability or their guardians).

Transfers inter vivos of residential properties in Gozo will be chargeable at a rate of duty of €2 for every €100, or part thereof.

The reduction of stamp duty rate to 1.5% on the first €400,000 of the property value and lowering of income tax on capital gains to 5% on property transfers will not be renewed and shall expire in June 2022.

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October 20, 2020  by

Budget 2021: Improved Incentives for First Time Property Buyers

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 existing scheme to aid buyers in purchasing their first home is being extended, with the property value eligible for duty exemption increased from the current upper-limit of €175,000 to €200,000.

This incentive and others affecting the real estate sector have been announced on Monday in the Budget 2021 speech. Yesterday’s budget also extended the reduced duties announced earlier this year as part of the COVID-19 economic regeneration plan.

Reduced stamp duty of 1.5% and Final Withholding Tax of 5% for Inter Vivos transfers will apply to promise-of-sale agreements made until March 2021, and until the end of 2021 for the signing of contracts of sale.

Other property incentives

Duty on property donations is also being eased, with the first €250,000 in the value of a property being exempt, an increase from the previous threshold of €200,000. Amounts in excess of €250,000 shall be subject to duty at the rate of 3.5%

The rate of duty on the acquisition of residential properties is being reduced to 3.5% on the first €200,000.

Reduction in duty for second-time buyers is also being extended to acquisitions made throughout 2021. This scheme allows individuals who sell their first residence to purchase another home to claim a duty refund of up to €3,000 if it is their sole property.

Extension of reduced duty rates on the acquisition of properties located in an Urban Conservation Area (UCA) or in Gozo. The current duty of 2.5% (down from the previous rate of 5%) will continue to apply during 2021

During 2021, all profits derived from the assignment of rights on a promise of sale relating to immovable property will be taxed at a final tax rate of 15% increased from the first €100,000.

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June 9, 2020  by

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.

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