The 2021 Malta budget was announced in Parliament by the Minister of Finance on 19th October 2020. The following is a brief review of the budget measures concerning transfers of immovable properties.

Property Tax & Stamp Duty exemptions on purchase of property

Schemes incentivizing the sale and purchase of property have been extended. These include the exemptions offered, to first-time buyers from paying stamp duty when they purchase their first property, to purchasers of properties within urban conservation areas (UCAs), and to purchasers of property in Gozo.

Moreover, first-time buyers shall, with immediate effect, be exempted from paying any duty on the first €200,000 of the purchase price. The remaining stamp duty shall be charged at a reduced 3.5% (provided the property is to be used as one’s primary residence, even if not a first-time buyer).

Furthermore, the measures introduced earlier this year in the Covid-19 economic regeneration plan, intended to assist the property market, will remain in place. Therefore, on the first €400,000 of the purchase price, stamp duty is to be charged at 1.5% instead of the standard 5%. Property sellers will also benefit from a reduced tax rate – 5% on the first €400,000 of the price instead of 8 (or 10) %. These reductions shall apply to all those sales for which a promise of sale is concluded by 31st March 2021, and provided the relative final deed is published by not later than 31st December 2021.

Donations of Immovable Property exemptions

Donations of properties made by parents to children for the latter to reside therein will also continue to benefit from further exemptions. The first €250,000 shall be exempt from duty while duty on the remainder of the property value shall be charged at 3.5% instead of 5%.

Assignment of Rights on Promises of Sale (konvenji)

Until now, property speculators or anyone who sold/assigned their rights emanating from a promise of sale are taxed on the profits made at a rate of 15% on the first €100,000 profit. Tax on the remaining profits are charged at the applicable higher rates. In his budget speech the Minister announced that, as from the 1st January 2021, all profits (not merely the first €100,000) are to be taxed at a final 15%.

For further assistance on fiscal incentives and budget measures you may contact any member of IURIS Advocates.