The best Budget ever or Why you should buy property now

October 21, 2020

This year Government of Malta has published the best budget ever. Among vast measures aimed to improve our economy and save us from devastating effects of Covid -19, there are number of excellent measures regarding properties.

Let’s start – here are shortly explained measures:

First time buyers – The duty exemption for first-time home buyers on the first €175,000 will be increased to €200,000 immediately. The difference from value of €200.001 up duty is 5%

Reduced stamp duty rate – Reduced tax rate on first 400.000 of 5% and reduced duty rate of 1.5% on the first €400,000 of the transfer value of the property continue to apply for promises of sale registered until 31 March 2021 and for which contract is concluded by 31 December 2021.

Second-time buyers – People who sell their first residential property to buy another residential property are currently eligible to a refund of duty of up to €3,000 (or €5,000 in the case of persons with special needs), it will be extended till end 2021.

Inheritance – People who inherit property in which they reside, currently pay duty of 3.5% on the property inherited, up to a max. value of €175,000. That maximum value will now increase to €200,000.  Same will apply for people buying their residential property even if they are not first time buyers.

Donations – The duty exemption currently applicable on the first €200,000 of value of property donated by parents to their children, for the purpose of having their ordinary residence will be increased to €250,000.

Value over and above the €250,000 will be subject to duty of 3.5%.

Final tax on Promise of sale  – Final tax of 15% will now be applicable to the full amount of gains or profits derived, for assignments effected during 2021.

Urban Conservation Area (UCA) –  reduced duty rate of 2.5% instead of 5%. For people who buy property in UCA will continue to apply during 2021.

Extension of all incentive schemes for buying PV panels, Heat Pumps, Reverse Osmosis etc. with a goal of ECO improvement of our homes.