The first time buyers scheme is aimed to assist young couples to purchase their home
Through the First Time Buyer Scheme, the Maltese Government is seeking the financial burden that young couples have to face when purchasing their first property. Buying a property is definitely one of the largest financial commitments that one can make during their lifetime therefore it should not be taken lightly.
The First Time Buyers Scheme has saved thousands of euros in tax payments to first time buyers and has been extended over and over again in every Budget. This fiscal incentive has helped young couples to purchase their home and invest their saved money into renovation or furnishing of the property.
The First Time Buyers Scheme applies to transfers of property, which qualify for exemption from duty under article 32 (4)(a) of the Duty on Documents and Transfers Act. The scheme applies in cases where the buyer does not require a permit by the Minister for the purposes of the Immoveable Property (Acquisition by Non-Resident) Act and who are acquiring such property for the sole purpose to establish their sole residential home.
To benefit from the First Time Buyer Scheme, the property must be the first immovable property purchased by the individual and/or couple. The truthfulness of such declaration i.e. that the property is one’s first time purchase, is very important, and the notary should warn of such importance to its clients.
Should all the conditions be satisfied, first-time buyers will be exempt from paying duty on the first €175,000. This amount has been increased from €150,000 in the Malta Budget 2020. This scheme offers a saving of €6,500 on stamp duty. If the property being purchased is in an Urban Conservation Area or is a property in Gozo, stamp duty will be charged at the rate of 2.5% (as opposed to 5%) on the remaining balance over the €175,000.
The benefits of the First Time buyers scheme are all provided by the Government of Malta and are presently available up to 31st December 2020.
It is important to note that there is not stamp duty charge on the value of the movable property such as furniture and fittings that might be sold with the immovable property. When drawing up the contract, the notary will not charge any stamp duty on the first €175,000 and declare the amount to be paid in the final deed.
Once the final deed is signed, that one would pay the remaining balance of the property bought, balance on stamp duty and notarial fees.
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