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 […]

Written By Stephen Balzan

On April 5, 2021
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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 30th 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 9th June 2020 but before 1st April 2021, which has now been extended to before the 1st August 2021.  The notice of transfer must be delivered to the Commissioner by not later than the 30th April 2021 which has now been extended to 31st August 2021 OR
  2. The transfer should be made on or after 9th June 2020 but before 1st January 2022, which has now been extended to before 1st February 2022.  The transfer must be made in terms of a promise of sale agreement or transfer notice made by not later than the 31st March 2021, which has now been extended to 31st July 2021.  The notice of transfer must be delivered to the Commissioner by not later than the 31st January 2022 which has now been extended to 28th February 2022

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].