Malta has a number of factors that make this archipelago nestled in the beautiful Mediterranean, an appealing and rewarding place to stay for locals and foreigners alike. Besides the fact that Malta enjoys 300 days of sun and is surrounded by crystal clear blue seas, the island’s year on year GDP growth and favourable tax laws has made it a magnet for foreign investment, this is especially true when looking at the property tax in Malta.
Unlike many other countries, there isn’t a long list of taxes associated with purchasing a property in Malta. There are no VAT implications on the purchase or sale of any immovable property situated in Malta or Gozo, nor is there any local council or municipal tax.
Byers are subject to Stamp Duty Taxes (link to stamp duty page) and there are also some tax implications which are payable by the seller when selling immovable property in Malta which is known as Withholding Tax or Property Transfer Tax.
Withholding tax in Malta is an income tax that needs to be paid by the seller of immovable property in Malta from the funds collected after the sale of a property. Withholding tax in Malta is generally an applicable rate of 8% on the value of the property transferred minus brokerage/agency fees and is payable regardless of whether or not the seller has made any profit on the sale of the property.
Due to the Covid-19 pandemic, the Maltese Government recently reduced the general withholding tax rate to 5% until March 2021.
There are several circumstances that will allow for exceptions to be made to the withholding tax rate, providing that the seller applies for the deduction. These circumstances include, but may not be limited to the following;
- If the property is transferred before five years from the date of purchase.
- If the property is transferred within three years from the date of purchase
- If the property is situated in an urban conservation area and or scheduled by the Planning Authority in terms of article 81 of the Environment and Development Planning Act for restoration and, or rehabilitation
- If the seller purchased the property before the 1st of January 2004 and a notice of the promise of sale or transfer relating to the property was not given to the CfR before the 17th of November 2014 then the applicable withholding tax rate will be 10%.
There are some instances that will make the withholding tax null and void, these are but not limited to as follows;
- If the property is transferred after three years from the date of purchase
- If the property is donated
- If the property is assigned
Taxes related to selling an inherited property in Malta are subject to a number of conditions and circumstances;
- If the property was inherited before the 25th of November 1992 then the withholding tax when selling the property will be equal to a final tax rate of 7% of the transfer value.
- If the property was inherited after the 25th of November 1992 then the seller can choose to pay a 12% withholding tax on the difference between the transfer value and the cost of acquisition, or the seller can choose to pay a final withholding tax of either 10%, 8% or 5% depending on what year the property was purchased as per the guidelines stipulated above.
It is always important to work with a registered and accredited Real Estate company such as Malta Sotheby’s International Real Estate, to ensure that you are guided and introduced to the correct people in order to comply with Malta Tax regulations. For more property tax information, click here. (link to tax table)
Launched on the Maltese islands in 2013, Malta Sotheby's International Realty had one clear vision and goal in mind – to offer our clients the highest level of commitment and quality of service in the high-end residential and commercial real estate market throughout the Maltese Islands. We derive our success from local expertise, professionalism, commitment, and discretion to meet any client’s needs. We understand the importance of finding a home that not only suits your needs but suits your vision for the future – a place that facilitates comfort, creativity and familiarity. We realise that a home is much more than a place to live - it is a sanctuary from where we build families and dreams. Our real estate professionals will guide you towards finding your ideal home throughout the entire buying and selling process. The culture of Malta SIR is defined by our knowledgable and dedicated diverse team which spans over multiple nationalities, whether you are a vendor or a buyer we speak your language.
The listing information set forth on this site is based upon information which we consider reliable, but because it has been supplied by third parties to our franchisees (who in turn supplied it to us) , we cannot represent that it is accurate or complete, and it should not be relied upon as such. The offerings are subject to errors, omissions, changes, including price, or withdrawal without notice. All dimensions are approximate and have not been verified by the selling party and cannot be verified by Sotheby’s International Realty Affiliates LLC. It is recommended that you hire a professional in the business of determining dimensions, such as an appraiser, architect or civil engineer, to determine such information.طراحی سایت