Budget 2022: Property Highlights

Last updated: 08.12.2022

We’re bringing you a quick summary of all budget items related to property from the government’s budget plan for 2022. This year’s budget focuses on Urban Conservation Areas and traditional Maltese buildings, more incentives for first-time buyers and Gozo.

  • Exemption from income tax on capital gains and duty on documents and transfers on the first €750,000 of the price of properties which:
    • Were built more than 20 years ago and have been vacant for more than 7 years;
    • Are built in a UCA; or
    • Are new properties and are built in a typical and traditional Maltese style and architecture.
  • This measure also applies to qualifying properties in respect of which a promise of sale has already been entered into as long as the final contract has not yet been signed.
  • First time buyers buying qualifying properties will receive a grant of €15,000, increased to €30,000 in respect of properties situated in Gozo.
  • These measures are effective as of 12 October 2021, for a period of 3 years.
  • With effect from 12 October 2021, persons who will own or who already own qualifying properties as above may benefit from a VAT Refund of up to €54,000 on the first €300,000 expenses incurred for the restoration and improvement of such properties.
  • The stamp duty exemption for first time buyers (exemption from stamp duty on the first €200,000 of the consideration), second time buyers (refund of duty paid on the first €86,000 of the value of the replacement property, or the first €150,000 in the case of persons with disability or guardians of persons with disability) and purchases of property in Gozo (rate of duty of €2 for every €100 or part thereof with respect to transfers inter vivos of residential property situated in Gozo) will be extended.
  • The reduction of the rate of stamp duty to 1.5% on the first €400,000 of the transfer value and the reduction of income tax on capital gains to 5% on the first €400,000 of the transfer value will not be renewed and therefore will expire in June 2022.
  • The eligible age for the Equity Sharing Plus scheme is to be lowered from over 40 to over 30 years of age.
  • The tax on the first €200,000 of acquisitions or disposals of property that have been rented out to tenants benefitting from the “Private Rent Housing Benefit Scheme” for a minimum period of 3 years but less than 10 to be halved. If the property has been rented to the acquiring tenant for more than 10 years, no tax shall be payable upon the acquisition and sale.

Source: https://home.kpmg/mt/en/home/insights/2021/11/malta-budget-2022-highlights.html 

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Melanie Ciantar