Stamp duty is a transaction-based tax which falls due upon the publication of a public deed which transfers immovable property from one party to another. The buyer is subject to a 5% duty on documents on the purchase price of the immovable property.
Stamp duty is payable on the final deed of acquisition of the property. However, a promise of sale agreement (konvenju) is not valid unless a provisional payment equivalent to 20% of the stamp duty is paid to the Commissioner for Inland Revenue.
Duty is calculated on the value of the consideration for the transfer of the immovable, or on the value of the immovable, whichever is the higher.
If the buyer is an EU citizen declaring on deed that he shall reside in the property being purchased as his sole ordinary residence, then the preferential rate of 3.5% is applied on the first 150,000 of the price.
The value in excess of the first €150,000 is subject to the default rate of 5% duty.
No duty is charged on the assignment of immovable property
- between persons who are married or
- consequent to a separation or to a divorce between such persons, or
- on the dissolution of the community of acquests existing between them or
- on any partition of any property held in common between spouses
- on the death of one spouse between the surviving spouse and the heirs of the deceased spouse
In case of an exchange, an exchange is deemed to constitute 1 transfer and the duty chargeable is assessed on the higher of the values of the things transferred.
No duty is chargeable on a division of a company where the shareholders of the companies recipient companies are the same shareholders of company being divided and each shareholders has the same proportion of shares in each recipient companies.
Individuals, who had never owned an immovable property in Malta and who will be purchasing a property as their residence by the 30th of June 2015, will benefit from an exemption on stamp duty on the first 150,000.
As it stands, in case of a first time buyer, after the 30th of June 2015, the first €150,000 of the transfer value will be taxable at a rate of 3.5% while the taxable rate for the rest of the transfer value is that of 5%.
In the case of a person transferring an immovable property by a gratuitous title to his descendants in the direct line for their sole ordinary residence, no account shall be taken of the first €200,000. Duty shall then be charged on the remaining value thereof at the rate of 3.5%. (Article 32C).
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