Amendments to Stamp Duty Regulations

Following the Budget Speech by the Minister of Finance last month, a new legal notice L.N.427 of 2020 has been introduced, bringing into effect the following changes and extensions to the current stamp duty regulations.  Second Time Buyers Scheme  The stamp duty refund applicable upon the acquisition of the second immovable property to serve as […]

Written By Elaine Camilleri

On November 12, 2020
"

Read more

Following the Budget Speech by the Minister of Finance last month, a new legal notice L.N.427 of 2020 has been introduced, bringing into effect the following changes and extensions to the current stamp duty regulations. 

  • Second Time Buyers Scheme 

The stamp duty refund applicable upon the acquisition of the second immovable property to serve as sole residence has been extended by one year. This means that the said scheme will apply to acquisitions affected up to 31stDecember 2021(previously 31st December 2020).

The above – mentioned rule applies when an individual transfers his/her residential property and acquires another residential property within 12 months from the date of transfer of the first property. The stamp duty paid on the first Eur86,000 of the value of the new acquired property is refunded to such individual. In the case of persons with disability and guardians of persons with disability, the amount of stamp duty which is refunded is the duty paid on the first Eur150,000 of the value of immovable property acquired.

  • Acquisition of Property in Urban Conservation Areas (UCAs)

The reduced rate of stamp duty amounting to 2.5% on the acquisition of property situated in UCAs has been extended by one year. This means that the reduced rate will apply to transfers of property made till 1st January 2022 (previously till 1st January 2021).

  • First Time Buyers Scheme

The stamp duty exemption for first time buyers has also been extended by one year. The amendments provide that any acquisition of property for the purpose of establishing sole ordinary residence made on or after 20th October 2020 but before 1st January 2022 are subject to an exemption form stamp duty on the first Eur200,000 (previously Eur175,000) of the value or consideration of the property being acquired, provided that the listed conditions are met.

  • Acquisition of Residential Property in Gozo

The reduced stamp duty of 2% applicable to the acquisition of residential property in Gozo has been extended by one year. This scheme will apply to final deeds of property transfers made by the 31st December 2021 ( previously 31st December 2020) and the notice of which is given to the CfR by the 28th February 2022.

  • Donation to relatives of Marketable Securities and Immovable Property used for Business 

The reduced rate of stamp duty of 1.5%, applicable to the transfers by gratuities title of marketable securities and property used for business to related persons has been extended by one year. The rules apply to donations made before 1st January 2022 (previously 1st January 2021). 

With respect to immovable property, this must be a commercial property that had been used in a family business for a period of at least 3 years preceding the transfer. 

How can we help?  

For further information, please contact one of the firm’s tax partners, Stephen Balzan on [email protected] or Elaine Camilleri [email protected]. ACT can help you understand the changes to the tax rules and how these can impact your business.  

Apart from its offices in St. Julian’s Malta, ACT operates from a second office in Gozo, which is situated in the capital city of Victoria.  For an appointment in our Gozo office, please call on 00356 21378672 or send us an email on [email protected]. 

Disclaimer: This article contains general information only and is not intended to address the circumstances of any particular individual or entity. ACT, by means of this article is not rendering any accounting, business, financial, investment, legal, tax, or other professional advice or service. This article is not a substitute for such professional advice, nor should it be used as a basis for any decision or action that may affect your finances or your business. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. Before making any decisions or before taking any action that may affect your finances or your business, you should consult a qualified professional adviser. ACT shall not be responsible for any loss whatsoever sustained by any person who relies on this article.