Are you looking for expert insights, timely updates, and valuable resources? Subscribe to our newsletter today!
The registration date for the final deed on property transactions that are eligible for reduced tax rates has been extended.
The tax reduction scheme was first introduced as one of the COVID-19 recovery incentives on a temporary basis for sale agreements back in June 2020. This has now been extended by three months, from the end of June to the end of September, as announced by Finance Minister Clyde Caruana on Monday. Advice on this extension was provided from notaries and banks after conducting research on properties.
The scheme caters for a reduced tax and stamp duty rate of 5% and 1.5% respectively on the first €400,000 property value. Minister Caruana stated that by the end of December, 8,615 promise of sale agreements were registered, which must be concluded by September in order to benefit from the scheme.
The minister added that 26,000 contracts benefited from favourable tax rates last year, meaning that the owners saves a total of €151 million on properties that have a total value of €5.1 million. The 8,615 contracts that are yet to be signed have a total value of €1.7 billion and shall be benefitting from €50 million in reduced taxes.
Positive uptake of scheme encouraging sale of older properties
Caruana highlighted the scheme to encourage property buyers to seek older or abandoned homes also had a positive uptake.
This scheme which was previously announced in October formed part of the budget, and it waives stamp duty and capital gains tax up to the first €750,000 of the value of properties, given that these properties were built more than 20 years ago, and have been vacant for the past seven years. This also counts for properties in the Urban Conservation Area.
With regards to UCA properties, around 150 sellers and 97 buyers benefitted from €2.7 million in reduced tax on properties that total €22 million in value.
Caruana concludes that “This is part of the government’s initiative to allow more people to own their own homes and incentivise regeneration in our towns and villages."
