Malta Prime Minister Robert Abela recently announced that the government would be making cuts to the property Stamp Duty (Property Tax), a move welcomed by real estate industry professionals. By dropping the property stamp duties, Prime Minster Abela has incentivised both buyers and sellers to invest in themselves and the economy, ensuring the continued stability of the private property market in Malta.
The announcement comes as part of the country’s stimulus package, geared towards kickstarting the Maltese economy after the Covid-19 pandemic and global recession. The changes to the stamp duty will see a huge reduction in property purchases under Promise of Sale (POS) or Konvenju as of 9 June 2020 as well as new purchases on the first €400,000 and will apply to any property contracts finalised between now and 30 April 2021.
Previously there was a 5% stamp duty for buyers with the first 20% payable upon signing of the POS, this fee will drop down to 1.5% for the buyer, while the withholding tax for the seller will drop from 8% to 5%. This is of course providing that the person acquiring the property is a Maltese citizen and therefore does not require a permit in order to purchase the property and that no relief is claimed under article 32C of the Duty on Documents and Transfers Act on the same transfer.
Another added measure is the 10% Deposit Scheme aimed at those who are eligible for a home loan but unfortunately do not have the necessary 10% required upon signing of the Konvenju. In this case the bank will provide the 10% needed, up to €175,000, as a personal loan to the buyer.
The loan is available to persons under the age of 40, who intend to purchase their first residential property and will be payable within 25 years. As a further measure the Housing Authority will pay the interest on the loan for the entire period of 25 years. In addition, to further assist first time byers, Malta’s first-time buyers’ scheme will also be extended to people who have bought a garage ensuring that they would still be eligible for the scheme.
The implementation of these relief measures is welcomed following the global pandemic that has affected the world economy. It will give many people the opportunity to get their foot on the property ladder that perhaps were not in a position to do so previously.
For more information on the stamp Duty and Property Taxes in Malta, or to start looking for the home of your dreams, get in touch with Malta Sotheby’s International Realty on +356 2010 8070 or send us an email on email@example.com