Malta 2015 Budget

Malta Budget 2015 Highlights relating to Property Transfers

A number of changes have been announced in relation to the sale and transfer of immovable property in Malta. The primary changes are listed below.

Taxation on transfers of immovable property

With effect from 1st January 2015, a tax payer may no longer choose to be taxed at 35% on the capital gain after deduction of expenses.  A final withholding tax of 8% (previously 12%) of the property’s value will apply on all transfers of immovable property subject to two exceptions and a transitional measure as follows:

  • A final withholding tax of 10% of the property’s value will be applicable on transfers of property which was acquired prior to 1st January 2004;
  • A final withholding tax of 5% of the property’s value will be applicable on transfers of property which is transferred not later than five years from the date of acquisition where the transferor is an individual who does not habitually trade in property;
  • As a transitional measure, the current rules will continue to apply for transfers of immovable property if such transfers were already notified to the Commissioner for Revenue through a promise of sale or transfer notice registered up to 17 November 2014

Extension of exemption from stamp duty for First-time buyers

  • An exemption from the charge of duty at a rate of 3.5% on the first EUR150,000 of the transfer value of immovable property purchased by first-time buyers, which is to serve as their sole ordinary residence, has been extended to deeds of purchase of immovable property which are concluded up to 30th June 2015. This exemptions results in a maximum saving by first-time buyers of up to EUR5,250.

Tax Exemption on property divided between Co-Owners

  • In cases of contracts for the division of immovable property where the owner acquires a share which has the same value as when it was undivided, no tax will be payable. This measure will give owners the chance to divide their property between them without having to pay excessive taxes. Co-owners will have the facility of not selling their share. 

Exemption from Capital Gains Tax 

  • The Budget will introduce a tax exemption on capital gains and stamp duty on property, whose transfer of title occurred from one of the owners to the other, and was acquired by two individuals with the aim of residing in it or building their main residence there on.

Other Exemptions

  • Current exemptions on certain transfers of immovable property such as transfer of property which has been occupied as a residential property (main home) and owned for at least 3 years, transfers between group companies, sales by court order and transfers upon separation will continue to apply.

A copy of the 2015 Budget measures (in English) can be downloaded here:   Budget 2015 document

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