Malta Budget 2021 Highlights

The Budget Speech for 2021 was delivered by Hon. Minister Scicluna on the 20th of October. The provisions of the Budget Speech, of which approximately seven relate directly to real estate, are expected to have a positive impact on the real estate market.  Stamp duty reductions have been extended into the new year and improved, as have benefits related to property in Gozo and taxation on the assignment of rights under a  Promise of Sale. 

The duty exemption which applies to first-time buyers has been extended for another year and the exempt amount shall be increased from Eur 175,000 to Eur 200,000. This means that first time buyers, purchasing their residence are exempt from paying stamp duty on the first Eur 200,000 of the value of the property upon purchase. 

A rate of duty of 3.5% on the first Eur 200,000 applies to individuals who are not first time buyers, but who are purchasing their residence. This rate also applies for the first Eur 200,000 in property value on the inheritance of residential property by the heirs. 

Refunds of stamp duty of Eur 3,000 up to Eur 5,000 applicable to individuals who sell their first residential property in order to purchase another residential property has been extended to 2021. This applies in cases when the purchaser does not own any other residential property. 

A reduced rate of duty applicable to purchasing properties in Urban Conservation Areas of 2.5% (instead of 5%), shall continue to apply during 2021.

A reduced rate of stamp duty applicable to individuals purchasing residential properties in Gozo of 2% (instead of 5%), shall continue to apply during 2021.

The reduction of stamp duty from 5% to 1.5% for persons purchasing property and the reduction of tax from 8% to 5% for persons selling property, with respect to the first Eur 400,000 of property value is to remain in force. This applies to Promise of Sales registered up to 31st March 2021, for which the purchase contract is signed by the 31st December 2021. 

The 15% tax rate applicable on the profit derived from the assignment of the rights in terms of a ‘promise of sale’, has been extended to 15% on Eur 100,000  of profit, to 15% on the full amount of profit.