The Budget for 2017 announced in October 2016 has included a number of provisions which are of direct benefit to Gozo
Property Sales and Rentals
Stamp duty reduction on Gozo properties
Stamp duty paid on residential property in Gozo has been reduced from 5% to 2%. This applies to all those who complete the acquisition of residential property in Gozo by the end of 2018, provided that the promise of sale agreement is registered by the Inland Revenue Department by the end of 2017.
Extension of First-time buyers’ scheme
The first-time buyers’ scheme has been extended to acquisitions made for the year 2017. The scheme allows individuals who are buying their first residential property to benefit from a 3.5 per cent stamp duty exemption on the first €150,000 paid. First-time buyers of properties exceeding €150,000 will only pay a 5 per cent stamp duty. This translates into savings of up to €5,250 when purchasing your first property.
Restoration grants up to €100,000 for first-time buyers
A new budget proposal has provided for first time buyers of immovable property within any Urban Conservation Area or a number of scheduled properties to benefit from a subsidy of up to €100,000 on the expenses incurred throughout the restoration works of a property.
Changes in tax on the transfer of inherited property
All transfers of inherited property that are made through a judicial sale by auction will now be charged 7 per cent tax on the transfer value provided that the property transferred was inherited before 25 November 1992. In addition to this, an inherited property could be charged tax based on the applicable marginal rates on the gain derived, subject to the 7 per cent provisional tax, if the property transferred was inherited after 24 November 1992.
In order to consolidate tax collection, all transfers of inherited property by means of a judicial sale by auction will now be subject to a final tax rate of 7 per cent on the transfer value.
Anti-abuse on registration of rental contracts
Currently, the rental of residential or commercial property is taxed at 15 per cent tax. In an effort to curb abuse, all property rental contracts, including those subject to renewal, pertaining to a duration of at least three months, are now required to be registered with the Inland Revenue Department either by the lessor or lessee. In the event that a property rental contract has not been registered with the IRD, the lessor will be subjected to the penalties contemplated by law.
Gozo Infrastructure, Access and other Investments
- A second fibre-optic link will be installed between Malta and Gozo, at a cost of around €3.2 million, over the next two years, in order to attract further niche investment in the IT sector and the digital economy to the island.
- A new fibre-optic link will be laid between Malta and Marseille, France, to reduce dependence on a hub in Italy. It will be financed by EU funds. This is intended to attract more IT industry to Gozo.
- A fast ferry service is to operate between Valletta and Mġarr (Gozo) to improve connectivity. Geological studies have been carried out with the aim of having a permanent link between Malta and Gozo. In 2017, a public call for tenders will be issued for the design, building and operation of a sub-seabed tunnel.
- The Xewkija industrial zone will be extended through a €16 million investment for new business workshops and services relating to ICT, research and training.
- Help will also be given to Gozitan students, by extending the subsidy given to MCAST and University of Malta full-time students to those attending a private higher education institution in Malta.
- The minister also announced that €5 million will be spent on a Gozo museum.
- A new swimming pool will be constructed to attract sports tourism.
- Work will continue on the Gћajnsielem elderly home through a €6 million investment.
- The Government also announced a White Paper regarding the devolution of certain responsibilities to Gozo. “The aim is to hold discussions regarding administrative activities and other work directly tied with Gozo, and whether it makes sense for these to start being handled from Gozo itself. This forms part of the decentralisation process.”