On Monday 24th October, Malta’s Finance Minister Clyde Caruana, unveiled the government’s budget for 2023 with a pledge to invest €600 million to cushion increases in energy and cereal prices. Mostly focused on low-income earners, pensioners and workers battling to keep up with the rising cost of living, the budget also includes several positive measures to keep the real estate sector on its present trajectory of growth.
> CASH GRANTS FOR FIRST TIME BUYERS: With effect from 1 January 2022, first time buyers will benefit from a €10,000 cash grant over a span of 10 years provided the property does not exceed €500,000. Currently, first time buyers may benefit from a €15,000 cash grant (€30,000 for Gozo) with respect to the acquisition of qualifying property.
> VAT REFUND FOR FIRST TIME BUYERS: VAT Refund of up to €54k on the first €300k expenses incurred for the restoration and improvement of qualifying properties remains applicable.
> DUTY EXEMPTION FOR FIRST AND SECOND TIME BUYERS: The duty exemption for first time buyers (exemption from duty on the first €200k of the consideration), second time buyers (refund of duty paid on the first €86k of the value of the replacement property 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 to the end of 2023.
> DEPOSIT PAYMENT ASSISTANCE FOR UNDER 40s: Assistance in terms of the Deposit Payment Scheme applicable to persons under the age of 40 to assist with financing the initial deposit required to acquire property will increase from €17,500 to €22,500, representing 10% of the consideration of the property of a value up to €225,000.
> UCA PROPERTIES: Continuation of certain existing property schemes providing for an exemption from income tax and duty on the first €750,000 of the higher of the value and consideration of the property. The schemes, applicable to transfers made by the end of 2024, cover properties located in a UCA or which had their construction completed at least 20 years before the date of the transfer, are vacant on the transfer date and have been so vacant for a period of 7 continuous years immediately preceding transfer date.
> AESTHETICS BOARD: A board will be set up in the first quarter of 2023 to issue guidelines establishing the quality and aesthetic criteria of buildings, the transfer of which will benefit from reduced tax and duty. It is expected that this board will be the approving body of the property measure, also applicable until the end of 2024, providing for duty refunds on acquisition of properties built in a typical and traditional Maltese style and architecture. More detail on currently open schemes is available at: Tax and Duty Schemes on the Transfer of Immovable Property.
