The government decided to help the real estate sector amid the COVID-19 pandemic by attracting buyers and sellers likewise. Legal Notices 240 and 241 of 2020 have introduced the reduction of tax and stamp duty on certain transfers of immovable property situated in Malta and any real right over such property. The following rules are effective from the 9th June, 2020:
Income Tax on Transfer of Property
A transfer of property will be subject to tax at 5% on the first €400,000 (four hundred thousand); while the tax on any remaining value will be subject to tax at the applicable rates (8% or 10%), provided that all the following conditions are met:
- Transfer is made on or after the 9th June, 2020 but before the 1st April, 2021;
- Would be subject to tax were it not for these rules, under Art5(a) at the rate of 8% or 10%; and
- The notice of the transfer that is delivered to the Commissioner for revenue by not later than 30th April, 2021.
Stamp Duty on Transfer of Property
A transfer of property will be subject to duty at 1.5% on the first €400,000 (four hundred thousand); while the tax on any remaining value will be subject to duty at the rate of 5%, provided that all the following conditions are met:
- Transfer is made on or after the 9th June, 2020 but before the 1st April, 2021;
- Person acquiring the property does not require a permit for the purposes of the Immovable Property; and
- Would be subject to tax were it not for these rules, under Art5(a) at the rate of 8% or 10%; and
- The notice of the transfer is delivered to the Commissioner for revenue by not later than 30th April, 2021
If you are interested in investing in real estate and other advantageous features of the Maltese jurisdiction, read about Why Use A Property Holding Company in Malta.
