Amendment to the Exemption from Tax on Certain Property Transfers Rules

By means of LN 129 of 2021, the Government of Malta has amended the above-mentioned rules, which were originally issued in 2020 after announcing a recovery package with the aim of restoring the economy following the effect of the COVID-19 pandemic

In terms of the said rules, the applicable rate of tax on transfers of immovable property situated in Malta, on the first Eur400,000 of the transfer value, shall be of 5% (instead of 8% or 10%).  The tax on the transfer value which is in excess of Eur400,000 shall be of 10% or 8%, depending on the date of acquisition.  In the case of a transfer of an undivided share of property, the benefit shall apply only to such portion of Eur400,000 which corresponds pro rata to the share that is transferred.  The reduced rate of 5% is applicable on condition that the transfer would have been subject to tax at the rate of 8% or 10% on the transfer value, were it not for the provisions of these rules, and that the notice of the transfer is given to the Commissioner by not later than the 30^th of April 2021.

All the conditions of any one of the following paragraphs (a) or (b) must be satisfied in order to benefit from the said reduction

1. The transfer should be made on or after 9^th June 2020 but before 1^st April 2021, which has now been extended to before the 1^st August 2021.  The notice of transfer must be delivered to the Commissioner by not later than the 30^th April 2021 which has now been extended to 31^st August 2021 OR
2. The transfer should be made on or after 9^th June 2020 but before 1^st January 2022, which has now been extended to before 1^st February 2022.  The transfer must be made in terms of a promise of sale agreement or transfer notice made by not later than the 31^st March 2021, which has now been extended to 31^st July 2021.  The notice of transfer must be delivered to the Commissioner by not later than the 31^st January 2022 which has now been extended to 28^th February 2022