Malta: Stamp Duty On Purchase Of Property Slashed As Part Of Malta's COVID-19 Recovery Plan

On the 15th of June 2020, the Government of Malta published a number of Legal Notices on the Government Gazette and thereafter on the justiceservices.com.mt website in relation to purchasing of property. The following is summary of these notices.

Exemption from Tax on Certain Property Transfers Rules, 2020

By virtue of Legal Notice 241 of 2020, entitled Exemption from Tax on Certain Property Transfers Rules, 2020, any "Property", which means immovable property situated in Malta and any real right over such property, transferred on or after 9 June 2020 but before 1 April 2021 an exemption from tax may be applicable provided the following conditions are satisfied:

1. The transfer is made on or after 9 June 2020 but before 1 April 2021;
2. In terms of Article 5A of the Income Tax Act, the transfer would be subject to tax at the rate of 8% or 10%, as applicable, on the transfer value;
3. The notice of the transfer that is required to be given in terms of rule 22(2) of the Tax on Property Transfers Rules is delivered to the Commissioner for Revenue by not later than 30 April 2021.

The Rules further outline that, the tax on the first €400,000 of the transfer value shall be calculated at the rate of 5% and the tax on the remainder of the transfer value shall be calculated at the rate of  8% or 10% according to the applicable provisions of article 5A of the Income Tax Act.

Exemption of Duty in Terms of Article 23 (Amendment) Order, 2020

By virtue of Legal Notice 241 of 2020, entitled Exemption of Duty in Terms of Article 23 (Amendment) Order, 2020, in the case of a transfer inter vivos of immovable property or any real right over such property made on or after the 9th June 2020 but before the 1st April 2021, the duty otherwise chargeable in terms of the Duty on Documents and Transfers Act on the first €400,000 of the amount or value of the consideration for the transfer of the property or the value of the property, whichever is the higher, shall be chargeable at the rate of €1.50 for every €100 or part thereof i.e. 1.5%.

Provided that the following conditions are satisfied:

1. The person acquiring the property does not require a permit for the purposes of the Immovable Property (Acquisition by Non-Residents) Act;
2. Notice of the final deed in relation to such transfer is given to the Commissioner for Revenue by not later than the 30th April 2021; and
3. No relief is claimed under article 32C (Transfers by a gratuitous title/Donations) of the Duty on Documents and Transfers Act on the same transfer.